Just after the chancellor’s autumn statement, Conservative Jacob Rees-Mogg had rubbished the Office for Budget Responsibility for making unnecessarily gloomy predictions about the government’s handling of Brexit and suggested we would all soon be dancing towards fun-filled days of forever summer. A lot can change within a week. Not least that it now appears the OBR was a ray of sunshine compared with almost every other economic forecaster.
So when Rees-Mogg got to meet the OBR chairman, Robert Chote, face to face at the Treasury select committee, he was rather more temperate than he had previously been. The OBR had done its work very properly, he observed, the model of noble politesse. It was just completely incorrect in its findings. How could the OBR be so certain about the levels of uncertainty?
Chote raised an eyebrow. He had expected to be grilled on the numbers rather than metaphysics and ontology. “The thing about uncertainty is that it’s uncertain,” he said certainly. It was now Rees-Mogg’s turn to look puzzled. Chote tried to help him out. It was like this: though he couldn’t be quite as certain about the levels of uncertainty as the Bank of England, he was still certain enough about the uncertainty to be confident in the uncertainty. Or to put it another way, uncertainty + uncertainty = certainty.
“We’ve had to make some assumptions based on government policy even though we and the government know that some policies are never going to be implemented,” said Chote. “On other matters we asked the government to explain its policies but they didn’t seem to have any.”
Rees-Mogg still wasn’t entirely happy with what he was hearing. Wasn’t it possible that all the forecasters were wrong and that Britain wouldn’t be considerably more broke for the next 10 years? Chote looked up, searching for a flying pig. “The government may hope that,” he said. “But by the time that happens I will be retired and you will be in the Lords.” Of that he was certain.
The committee’s chair, Andrew Tyrie, was keen to explore the meaning of uncertainty in greater depth. What created the most uncertainty? The government setting a date for leaving the EU in March next year, or it doing so without having a clue of where it was going to end up two years down the line? Chote chose to pass on this. This was a level of uncertainty well above his pay grade. “I think,” he said, choosing his words carefully, “that nothing will be agreed until everything has been agreed.”
With the big existential questions of Brexit left hanging in the air, Tyrie turned towards more mundane existential matters. Such as the Treasury’s assurances that there were no contingent liabilities to the Nissan deal. Was Chote any more certain about these uncertainties now that Philip Hammond had sent him a personal billet-doux? “No,” said Chote. “The thing is that the Treasury only said that the Department for Business didn’t think there were any liabilities and refused to say what it thought, so I’m still certain that I’m uncertain.”
Chote went on to point out that “even under the yoke of EU rules” the Germans managed to export three times as much to China as we did and that the cost of Brexit was likely to be about £12bn per year. Labour’s Rachel Reeves invited him to think of any possible economic upsides to Brexit. Chote thought about this for a while. “I suppose if we returned to agricultural support, dropped to their pre-1973 levels, then food prices might be lower,” he offered. Over the farmers’ dead bodies.
Faced with such a deluge of negative certainties, Conservative Stephen Hammond desperately tried to find some uncertainties in the autumn statement that might be positive. “Do you have any confidence in the chancellor’s assertion that there will be a clear and strong effect on investment?” he asked.
“Not really,” said Chote. “Because the effect will be so small.”
“But it will be strong and clear,” Hammond said hopefully.
“Strong, clear and small.” Chote was doing his best to throw him a bone.
“Small,” Hammond repeated. “The chancellor must have left that bit out.”
