Not an 'Economic Models' Fan, UK Minister Admits to No Analysis of Brexit Impact

​During questioning by the cross-party Select Committee for Exiting the European Union on December 6, Mr. Davis responded to Labour Chair Hilary Benn that impact assessments on the automotive, aerospace and financial industries didn't exist.

"You have said there are no impact assessments. You were hoping that, at the October (European) Council, the door would be open to phase two of the negotiations, where the question would be asked 'What does the UK government want?" 

"Are you actually telling us that the government hadn't at that point — and still hasn't — undertaken the assessment?" Mr. Benn asked.

Davis told the committee he didn't need a formal impact assessment and that the sectoral analysis was evolving.

"I'm not a fan of economic models because they have all proven wrong. When you have a paradigm change — as happened in 2008 with the financial crisis — all the models were wrong," Davis said. 

Jonathan Portes, Professor of Economics and Public Policy at Kings College London told Sputnik the government had been trying to avoid facing up to the economic realities created by Britain's exit from the EU.

"It is no surprise to discover that the government has not in fact analysed the impact of Brexit, or of different forms of Brexit on different sectors of the UK economy. The reason is simple, any objective, professional assessment would conclude that, for the vast majority, although not all sectors, the status quo is preferable in terms of economic outcomes."

Economic Impact

In a London School of Economics report published November 2017, official Treasury estimates were cited forecasting a 6.2 percent decline in overall GDP, equivalent to US$5,748 (£4,300) per British household. The authors however were critical of Treasury estimates, saying they were probably overly optimistic in its modelling.

​In February 2017, auditing firm KMPG published its own analysis of the likely impact and exposure of all the UK's main industries to labor from the European Union. The most dependent industries were food and drink manufacturing at 30 percent, logistics and postal services at 14 percent, hotels and restaurants at 13 percent.

Among the reactions online was Vince Cable, Leader of the Liberal Democrats, who called the revelations less serious than the Conservative Government's decision to leave EU Single Market itself without having first studied the likely impact.