In Defence of Liberty

Driven by data; ridden with liberty.

Copy and Haste X: Brexit Maths

Copy-and-Haste-X-Brexit-Maths-Telegraph.jpg

No, you cannot pay off the national debt by getting out of the EU. (Edited: Telegraph)

On the BBC political debating programme Question Time, an audience member claimed that leaving the European Union would mean Britain could entirely pay its national debt back by 2030.

(Video: Guido)

The man said:

I did some maths on the back of an envelope as well. I should say I’m an economist and a financial adviser. And I took the £10bn of net savings we would make if we left Europe and I multiplied these by 14, which is the number of years up to 2030.

I then used the economic credit multiplier, because of course you have the benefit of spending that money, the taxes raised on it, some economic growth and so on. And do you know the figure I came up with?

The figure I came up with was £1.5tn, which means if we leave the EU we’ll be able to fund and repay the national debt by the time comes.

Copy-and-Haste-X-Brexit-Maths-BBC.jpg

Tim Martin, the founder of Wetherspoons, cheered on the error. (Source: BBC)

An arithmetic error

This speech was received with jubilation and rapturous applause.

It was then shared by the Guido Fawkes blog [1], among others.

It is also wrong.

Firstly, the net contribution in 2015 was £8.5bn, not £10bn [2].

Copy-and-Haste-X-Brexit-Maths-Full-Fact.png

The net contribution was £8.5bn. (Source: Full Fact)

For the sake of this argument, let us round that up to £10bn, as the “financial adviser” plainly did.

Multiplying that figure by 14 yields £140bn. The economic “multiplier” used to reach the £1.5tn amount —which is equal to £1,500bn — is 10.71.

That is clearly incorrect, and suggests that this audience member has done something fundamentally wrong with his arithmetic.

Nevertheless, this speech received a massive applause.

This is disheartening that such a clear error could not be spotted, and especially given the absurd response to the Treasury’s mathematical modelling, highlights the importance of mathematical literacy and education.

References

[1] Staines, P., 2016. Question Time Audience Member Solves National Debt. Order Order. Available from: http://order-order.com/2016/04/23/question-time-audience-member-solves-national-debt/ [Accessed: 23rd April 2016]

[2] Full Fact, 2016. The UK’s EU membership face. Available from: https://fullfact.org/europe/our-eu-membership-fee-55-million/ [Accessed: 23rd April 2016]

Advertisements

Information

This entry was posted on April 26, 2016 by in Social Media and tagged , , .
%d bloggers like this: