Osborne’s bleak Brexit forecast ‘has undermined the Treasury’

George Osborne’s “project fear” forecasts about the economic risks of leaving the European Union have undermined public confidence in the Treasury and left it ill-equipped to influence Brexit, according to a damning new report from former Whitehall chief Lord Kerslake.

The Treasury is traditionally Whitehall’s most powerful department and its civil servants some of the brightest and best. But Kerslake finds that its reputation waned in the wake of the financial crisis – and when it published bleak forecasts of the impact of Brexit in the run-up to the referendum, “the public reaction … was unprecedentedly hostile”.

Osborne believed publishing gloomy official forecasts would convince the public there was too much at stake to risk voting Leave. But many appeared to believe the Treasury had simply been co-opted by the Remain camp.

So far, its projections appear to have been too pessimistic. “Whilst there is a debate still to be had as to whether the Treasury forecasts were completely wrong or just wrong in the timing, and how other factors such as the febrile political climate and criticisms of ‘experts’ played a part, there is no arguing that the standing and credibility of the Treasury was damaged by the widespread rejection of its warnings,” the report says.

Kerslake was head of the home civil service from 2012 to 2014, and permanent secretary of the Department for Communities and Local Government. He was commissioned by shadow chancellor John…


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