Wednesday, May 29, 2019

Did Boris Johnson and Vote Leave lie about the £350m per week?

Short answer: no.

Slightly longer answer: Vote Leave did play fast and loose with the actual definitions—hey! it's marketing. And in a political campaign at that—but still no. The ONS "Total Debit" figures that they were using at the time were perfectly valid.

Much longer answer follows below...

The generally acknowledged authority on statistics in the UK is the Office for National Statistics (ONS) (the clue, you see, is in the name). Every year, they release a general digest of the UK's trading position, etc., known as the Pink Book. It's quite interesting if you like that sort of thing (which your humble Devil does, from time to time), but the tables of data are usually rather more illuminating—after all, even the ONS is not above a bit of spin (political or otherwise).

Some spiv named Marcus J. Ball has decided specifically to summons Boris Johnson for "misconduct in a public office": the spiv claims that Johnson knowingly lied about the UK paying the EU £350m per week.
Boris Johnson has been summoned to court to face accusations of misconduct in public office over claims that he lied by saying Britain gave £350m a week to the European Union.

The ruling follows a crowdfunded move to launch a private prosecution of the MP, who is the frontrunner in the Tory leadership contest.

Johnson lied and engaged in criminal conduct when he repeatedly claimed during the 2016 EU referendum campaign that the UK handed over the sum to Brussels, Westminster magistrates court was told last week by lawyers for a 29-year-old campaigner who has launched the prosecution bid.
Why the spiv has cited Boris rather than the Vote Leave team (or even Dominic Cummings) who actually came up with the slogan, I shall leave to speculation (clue: it's a publicity stunt because Boris is running for Tory leader).

Regardless, what we want to know is this: did the Vote Leave team knowingly lie about the UK paying £350m per week to the EU? Or could we prove that they lied? Hmmm.

Bear with me here, whilst I look up a definition of "debit"...
debit (noun): (a record of) money taken out of a bank account
Any normal person would, I think, define "debit" as money leaving a bank account. Because that is what the definition is, yes?

Let us now turn to the data tables for the ONS Pink Book for 2016, and turn immediately to Table 9.9: UK official transactions with institutions of the EU.

This table shows that "Total Debits" (to be clear: their phraseology, not mine) to the EU, in 2015, were £19,593,000,000 = £376m per week.

Given our definition of debit, is it reasonable to assume that this money was, in fact, sent to Brussels? Is it reasonable to assume that this money was sent to the EU, and then some given back? Yes, I would say so.

The sin of omission, of course, is the credits. The same table shows that "Total credits" were £9,240,000,000, resulting in a negative "Balance" of £10,353,000,000, i.e. that the net payment to the EU is a paltry £199.1m per week (so I, for one, feel much better).

In any case, as per standard business accounting, that full amount—the £350m per week—is a liability that needs to be accrued for within that financial year and, even if the money does not actually go into an EU bank account, it cannot be spent by the government until the end of the financial period (when all of the accruals are reconciled).

Why? Well, I think that this is illustrated by the Pink Book of 2018—which records wildly different figures for 2015. The "Total debits" are much lower, but so are the "Total credits"—giving a net figure that is actually larger than that recorded in the 2016 Pink Book: £10,553,000,000 (only £202.94m per week, net). The point here being that the figures were not finalised even in 2016—we know this because the 2018 balance is different—and so must be accrued for.

A pertinent question to ask though, is why the figures are so different between the ONS Pink Book 2016 and ONS Pink Book 2018?

Well, you might remember the ONS publishing a clarification about the UK's contribution to the EU, with figures that were wildly different (and lower) than those contained within the Pink Book of 2016. WTF?

As it turns out, before the clarification was published in October 2017, the ONS decided to change the way in which it accounted for the famous rebate—which is in both sets of figures as the "Fontainebleau abatement" line item. Up until 2016, the Fontainebleau abatement appears as a positive credit in the data tables; after
the referendum the ONS's sudden revelation in 2017, the Fontainebleau abatement appears as a negative debit.

Although the overall balance remains (broadly) the same, the Total Debits for 2015 has now dropped: from £19.593bn (in the 2016 edition) to £14.804bn (in the 2018 edition). And, in fact, according to the ONS statement, a "similar presentational change had also been previously introduced within the Public Sector Finances published in September 2016". The timing of which is a lovely coincidence, I think you'll agree.

Anyway, in conclusion, what do we think of this court case? Your humble Devil concludes as follows:

  • including the rebate, from the ONS's own figures and phrasing, the Total Debits amounted to £19,593,000,000 = £376m per week;
  • a normal person would understand a debit as money leaving a bank account—in this case, leaving the UK's bank account to land in the EU's;
  • even if this actual transaction did not happen, basic accrual accounting ensures that the full amount of money liable could not be spent by the government: as such, which actual bank account the money was residing in was not important in terms of, say, wanting to further fund the NHS;
  • the clarification from the ONS that such immediate bank-to-banks transfers did not happen was not published until October 2017—around 16 months after the referendum;
  • the ONS changed the way that it accounted for the rebate—but not until September 2017;
  • is it thus reasonable to believe that the Total Debit of £376m per week was "sent to Brussels"?
  • I guess we'll find out, but I would say "yes".

In the view of your humble Devil, however, this court case is a frivolous waste of time and money—and actively dangerous in terms of our democracy.

But—hey!—that's Remainers all over: they don't care what systems they fuck up, as long as they get their own way.

P.S. In case it comes up (and it will) most payments from the EU to the UK (credits) are irrelevant, really. If someone said to you, "give me £20; I'll give you £10 back—plus you have to skip around, from this day forth, whilst whistling the Chicken Song" you wouldn't do it, would you?

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