The Treasury Select Committee (TSC) met on the afternoon of
11th May to question George Osborne and Treasury official, Mark Bowman over the
EU Referendum campaign. The session can be seen here.

For those who are unaware, select committees are broadly
organised to reflect government departments. Naturally, the TSC reflects the
Treasury. The committee is made up of 11 MPs from across the parliamentary
spectrum, at least as far as party representation is concerned.

In practice, the significant majority of the committee are
currently on the IN side as far as the referendum is concerned. Seasoned
observers of the TSC, that Jacob Rees-Mogg usually cuts a lonely figure,
sitting at one end of the horseshoe of tables. For once, he had two other
Conservatives positioned adjacently.

Those who have seen other recent TSC meetings might have
expected a forensic examination of Osborne’s figures. When figures from Leave
campaigners, Arron
Banks, Richard Tice
and Matthew
had appeared, questioning was penetrative. TSC made recommendations
to change figures on their web site. Could we expect the same?

The Chair, Andrew Tyrie, opened proceedings revealing that a
further document will be produced by the Treasury, concerning the short term
impact of a Leave vote.

The first challenge, from the Chair, came from a
Cabinet paper, the
Best of Both Worlds
. The question was whether Britain can unilaterally enforce
access to the European Council over management of the economy, as outlined in
the document, if principles are not being respected.

Osborne showed what he does well, obfuscated the process
with a long winded tangent of his own agenda, of the type he was to repeat for
much of the afternoon. What appears to be the case would be met based on the
balance of probabilities rather than legally enforceable.

Stephen Hammond started to probe on two points, whether
sensitivity analysis was conducted. Bowman and how the famous figure of being
£4,300 worse off was arrived at. The sensitivity analysis question was asked
several times, to which Bowman replied not fewer than 6 times that the Treasury
used “cautious neutral assumptions”.

So what is sensitivity analysis and what is the point? This
is a method of accounting for uncertainty, using alternative assumptions to
test how robust a model is, sometimes removing some variables. The fact that it
was not carried out can suggest that a model is not “robust” as we were told
when the document was released. In short,l the Treasury did not challenge its
own assumptions.

The question set up Osborne to return to the increasingly
hackneyed phrase that “we don’t know what leave looks like”. At this point
nobody challenged as to how this government would seek to shape what leave
looks like whilst they are in power.

Rees-Mogg took his turn to question. The early part of his
questioning concerned productivity growth, highlighting that European
productivity growth has indeed been a problem since 1992, at least compared
with international competitors. Osborne chose an alternative time frame to

The Chair intervened to suggest that the £4,300 figure was
“the product of imprecise modelling, ranges”. Osborne had been given a lifeline
of an alternative position to defend.

To his credit, Rees-Mogg persisted to attempt to identify
what other reasonable assumptions had not been included by the Treasury. In his
4th apparent attempt to cut Rees-Mogg off, the Chair shifted the
discussion to Foreign Direct Investment (FDI) and an admission that statistical
significance was not established.

Attention shifted to Labour MP Rachel Reeves, Osborne’s “new
very close friend” which was perhaps reflected by her approach, including Tweeting
from inside the committee. Unsurprisingly they agreed that all was doom and
gloom outside the EU. Osborne let himself off the hook by shifting policy
measures to the Bank of England.

One curiosity out of the Reeves/Osborne love in was that
house prices would fall but would not stop foreign investors buying UK property due
to a falling exchange rate? Unfortunately, there was nobody left who was
allowed to challenge his economic literacy as to why foreign buyers would want
to invest in a falling market with weak exchange rates and nobody able to want
to buy their failing investments.

Some tests came from Steve Baker who asked why Osborne made “the
assumption of no confidence as to what the British government can achieve”. He
received the response that it would take 15 years to get a trade deal with the
EU. Apparently, existing templates would not provide a basis for other trade

Chris Phelps briefly highlighted foreign trade, growth in
trade deficit with the EU, the 61% growth in trade with the USA (with who
we don’t have a trade agreement) compared with 44% growth in the EU over the
last 10 years. According to Osborne, the EU is the only area to have had a hard
time over that period. There was no challenge as to why the EU is stagnant.

The soft questions secured the potential for an own goal by
Osborne in admitting that the German and French would beat us in any
negotiation over freedom of movement. Unfortunately, the defence had gone
missing so nobody was there to knock in the winner over the extent of our trade
deficit with Europe.

The last real challenge came from the Chair, with what
turned out to be around an hour before the Monty Python like inquisition. This
was over deregulation should the nation choose to remain. Even though new
regulation has shrunk by 80%, no existing costly regulation was to be repealed.

Further questions resembled the comfy chair, soft cushions,
coffee and glass of milk coming from Anne Goodman, George Kerevan, John Mann, Wes
Streeting and the particularly helpful Andrew Garnier.

More potential own goal emerged. This government has no
contingency plan. We can not project public expenditure savings. We are
apparently in a position from inside to clean up the EU, despite being unable
to pressure them into producing signed off accounts for a quarter of a century.

Strikingly, there was no challenge as to the EU’s ability to
remain protectionist, reducing the scope and impact of WTO deals over decades.

The Chair summarised with an attack on the Leave camp,
glossed over the lack of contingency planning and set Osborne up for the
potential winner. Osborne was invited to reiterate his slogans.

The questions that were not asked were glaring. What if we
were to reciprocate with tariffs on the EU? How would we spend the receipts? Would
the EU want to protect their biggest export market? Would the EU really be
stronger with Britain
out? What did the report cost? Is it moral to use Treasury resource to scare
the public?

Sadly, the forensic questioning that we have seen of late
was not forthcoming. There is no requirement for the deeply flawed Treasury
document to be edited. We can see that in our parliamentary democracy, some are
more equal than others.

You are invited to judge for yourself, based on the links
provided in the text. To finish on a positive note, congratulations to those on
the TSC on their stamina. Listening to George Osborne for two and a half hours
demonstrates certain qualities.