Plenty of people believed the “dystopian vision” conjured up by Remainers before the Brexit referendum, says Larry Elliott in The Guardian. The then chancellor, George Osborne, grimly warned of a “DIY recession”, 800,000 job losses, a weaker housing market and a stock market crash. It has now been two years since we left the EU – and “none of it has happened”. Unemployment is lower than it was in 2016 and house prices are higher. “Share prices have risen and until Covid arrived there was no recession.” The “gloomy predictions” continued long after the 2016 vote – that Nissan would quit the UK, that City jobs would be lost to the continent, that Brexit supply chain problems would “mean a turkey-less Christmas”. Again, none of it has come to pass. “The wait for economic meltdown goes on.”
The truth is that the models predicting all this damage were based on the assumption that life would go on as before – that there would be “no change in behaviour either by the private sector or the state”. But if Covid has taught us anything, it’s that “businesses adapt to changed circumstances pretty quickly”, especially when given plenty of government support. Ministers should take heart from all this, especially in the context of “greening” the economy. We now know that breaking with a “broken model” doesn’t have to lead to economic armageddon.