Hello and good morning. Meet Professor Panic. He’s a senior government scientific adviser, appointed by Prime Minister David Cameron.
He’s had a low public profile till now. But that’s about to change.
“PP” – as he is known on campus – is the Heinz Kiosk Emeritus Professor of Long Term Disaster Planning and Global Risk Mitigation at St Andrews University. He has a striking prophecy for us all.
Britain, he warns, could slide into a giant sink hole if we vote to leave the EU.
Referendum uncertainty, he says, is already causing dangerous cracks to appear across the UK. “Entire regions could disappear without trace.”
Professor Panic, speaking exclusively to Scot Buzz last night, unveiled his latest economic forecasts for the UK.
He predicts a stock market crash, a collapse in the pound, emergency food rationing, tumbling house prices and a fall in GDP of between 20 and 40 per cent between now and 2050.
Earlier, Chancellor George Osborne echoed remarks by the IMF’s Lagarde that the consequences of Britain leaving the EU would be “pretty bad to very, very bad”.
But Professor Panic immediately contradicted him. The chancellor, he said, was grossly under-stating the risks.
“The consequences”, he declared, “would be very, very, very, very, very, very bad”.
Christine Lagarde says it is possible the economy would shrink in two consecutive quarters – the definition of a recession.
“We have looked at all the scenarios”, she added. “We have done our homework and we haven’t found anything positive to say about a Brexit vote.”
No, no, nothing. Nothing at all.
Professor Panic, official adviser to the Department of Energy, Balloon Blowing and Climate Change, accuses ‘Vote Leave’ campaigners of running irresponsible scare stories about EU plans for slow boiling kettles and tough new regulations on wheelie bin collections.
He believes the sink holes could be as great as five miles in diameter and could appear without warning. Most of Scotland, he added, could vanish, leaving only the Cairngorms on view.
The truth, he said, was being suppressed by a conspiracy of Vote Leave deniers.
So there we have it. Just in case you thought nothing could top David Cameron’s warning that peace in Europe would be threatened if we Vote Leave, and the IMF’s Lagarde that we would be plunged into recession, the new sink holes prediction of an unknown scientist hardly seems out of place.
What could possibly beat this, with almost six weeks still to go? A bubonic plague alert?
UK voters have been subjected to the greatest scare campaign in politics since the Zinoviev Letter. This appeared just days ahead of the 1924 general election purporting to encourage British communists to foment revolution.
Perhaps on the eve of the referendum vote, the BBC could dramatically reveal that Boris Johnson has sent an email inciting Islamic terrorists to seize control of major cities.
What credence can be placed on all the warnings from the IMF, the Treasury, the CBI, the OECD, the Bank of England – and President Obama?
Bear these points in mind as Professor Panic warms to his theme:
ONE: the UK economic slowdown is not, as the CBI opined last week, primarily due to “uncertainty over the EU referendum”. Signs of slowdown have been apparent for many months – and preceded the announcement of the June 23 referendum date.
TWO: economic forecasts are constantly subject to change and revision. Were they always right, we would have solved our economic problems decades ago.
THREE: the forecasting record of the IMF has been woeful. It has frequently been proved wrong in its predictions for the UK, most notably in September 2011 when it warned the UK chancellor of rising risks to the economy. In fact, recession was avoided in 2012 and the recovery pace quickened in 2013.
FOUR: The reason the BREXIT forecasts from the IMF, the Treasury and the OECD are so gloomy is that they only consider the effects of not having the privileges which EU membership brings. None of them consider, as economist Professor Patrick Minford has rightly pointed out, the economic effects of not being forced to do the bad things which EU membership does force us to do – such as import barriers against imports from outside the EU itself.
FIVE: The economic analysis presented by the Remain camp is, at best, incomplete on two counts. First, it downplays or (as in the government’s case) overlooks altogether the other factors that have contributed to the UK slowdown: the weak rate of average earnings growth, the continuing pressures on household budgets, government spending constraints due to extreme debt and borrowing, the effects of the China slowdown on demand, the wider impact of cutbacks in North Sea oil activity on energy related and service companies, rising unemployment – and the weather effects on shop visits and consumer spending.
Second, it presents a potential fall in sterling as a necessarily harmful impact. But is that really the case when the UK ran up a thumping UK £13.3 billion trade deficit in the first three months of the year, the largest since 2008? Indeed, a fall in sterling would surely seem overdue and would be warmly welcomed by many companies.
Similarly, a rise in interest rates if sterling crashes as a result of BREXIT is presented as a cause for worry. But for years central banks have been battling to offset the risk of deflation by cutting rates to historically low levels.
Monetary policy across the US, Japan and Europe has desperately sought to encourage inflation domestically, with resort to Quantitative Easing. Now central banks are anxious to raise rates and for economies to return to normality.
Thus the IMF and Treasury warnings that the prospect of higher inflation on EU exit would force up interest rates would represent the very outcome central banks have been battling for years to achieve.
It’s getting quite Orwellian: central bank inflation good; BREXIT inflation bad!
Who needs Professor Panic? Clearly we do, it seems. And oh, dear. To think we have another six weeks of this.