Comment: Bankrupt Britain

If a government does not like what a statistic indicates, it has two choices: either manipulate it until it looks right, or simply do not publish it. In the case of the UK leading up to Brexit we clearly have both processes at work.

After the Brexit referendum vote, the UK Office for National Statistics (ONS) began to monitor a set of selected data in order to determine what impact the vote would have had on the economy. Those visiting these pages are advised to click on a red spot and drag it right to show the movement of data, such as GDP and consumer price inflation, since the second quarter of 2016. Of course, the red line that appears indicates that there has been no ensuing catastrophe, in the same way that the UK treasury likes to claim that projections about lost jobs have never materialised. But look a bit deeper and the picture changes.

One critical statistic is the UK balance of payments. This shows the gap between what the UK exports and what it imports. Several tables containing this data are published by the EU’s agency Eurostat; however, although other country data is visible, there is a long line of empty space where the UK data should have been, indicating that the UK government has something to hide (and indeed it does). This data can, of course, be found on a quarterly basis if we look on the ONS website, but only if we search carefully for it. This shows that the situation is indeed grave, with the data for Q3 2018 running at a £106M deficit on an annualised basis. This deficit problem is not new and its pattern indicates that the UK economy never really recovered from a recession that began in earnest in Q2 2005.

However, things do not stop there. This is because if you know where to look, statistical agencies will usually leave a trail if they have been forced to distort the figures. Locked away in the ONS website is a table curiously called “BOP net errors and omissions NSA £M”. This records errors and, more importantly, omissions that are known to the government statisticians and quantified. This data has thus been purposely withheld from the official statistics. There are no figures for 2018, but in 2017 (one year after the Brexit vote) the figure had shot up from £3BN to £20.3BN. At no time since the balance of payments statistics were first compiled in 1946 had the “errors and omissions” reached this level – a figure that dwarfs the official trade deficit so much that if it were added to the published UK deficit, it would be clear that the country was in a deep economic crisis, even before the 29th of March 2019. We can but guess how the data would stand in 2018, but we must surmise that the situation would not have improved, and could well be very much worse.

Of course, the UK’s departure from the European Union is not actually as a big of a deal as many people imagine, because it has always taken a mean view of its obligations and kept one foot out of the EU all along. It was never part of the Eurozone single currency area, or part of the Schengen nations that allowed free movement without border passport checks. Since Margaret Thatcher forced a rebate, it has never fully met its share of EU budgets and has sought minimal compliance for all EU measures, including derogations for weekly working hours. But the UK remains mean, even to its own citizens, by not letting expats use the National Health Service without charging them, no matter how long they had previously contributed to its costs. As we have now clearly demonstrated, the UK government is also mean with the truth and we have only touched the shirt tails of a much vaster potential body of deception.

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