Welcome to Doppelgänger Britain – a world without Brexit

Opinion piece (The New Statesman)
16 September 2023

The economist John Springford on how he modelled what the UK would look like had it voted Remain.

Picture the scene. Economic growth is 5 per cent higher in the UK than it is now, foreign investment is up 11 per cent, and 7 per cent more goods are being traded across its borders. Stick on “Ode to Joy”, pop open a bottle of prosecco, curl off some jamón: welcome to Doppelgänger Britain.

This parallel universe – scoffed at by Brexiteers and yearned for by Europhiles – is the unofficial comparison point for how much Brexit has impacted the UK economy. The country the UK could have been had it remained in the European Union. It’s a world that hovers in and out of view from Brexit Britain, like one of those lenticular stickers from the Nineties. There, but not there – a vision just out of view behind every unsettling ripple in the stagnant economy.

Inflation, product scarcity, staff shortages, queues at Dover… whatever it is, the question is always “is this Brexit?” Remainers are certain it is, sore-winner Brexiteers won’t hear anything of it (though are similarly silent on their project’s promised merits). Opinion polls suggest a country filled with “Bregret”.

The doppelgänger is an attempt to work out how the UK would be faring now if it weren’t for Brexit. Referenced in the Financial TimesEconomist and BBC, weighing on the shoulders of Whitehall civil servants, and pored over by European governments, the “doppelgänger model” is perhaps the most influential analysis we have of Brexit’s impact. And it doesn’t look good.

In creating a mythical Britain from comparable economies around the world – as they were before the 2016 EU referendum – this method suggests some of the bleakest pre-Brexit forecasts were right. Late last year, the model found that Brexit has reduced UK GDP by 5.5 per cent. (Since GDP growth forecasts were revised upwards last month, this has fallen to 5 per cent.) In 2018, the government’s long-term Brexit forecast suggested the deal Boris Johnson backed would make the UK 4.9 per cent worse off. The Office for Budget Responsibility found Brexit would reduce productivity by 4 per cent in the long run.

Not quite “Project Fear” – the label applied to Remainers who warned the UK would suffer an immediate recession. But nowhere near a nimble Singapore-on-Thames nor a buccaneering Global Britain either.“The model suggests the costs of Brexit are on the higher end of the forecasts made before and immediately after the referendum,” said John Springford, the economist behind the model. He is deputy director of the Centre for European Reform, a pro-European think tank, where he began as a junior research fellow in 2011 focused on what was then considered “boring stuff about the EU”.

Growing up in the small Dorset town of Sturminster Newton, Springford went on to a degree in economic history at Glasgow University. He joined the think tank world after abandoning a PhD at Oxford (“I hated it”). While he was politically engaged, he only became interested in the EU at university.

“Since 2004 with the accession [of ten eastern European member states], the euro crisis, the migration crisis, a lot of the news has been bad,” he reflected. “Before, it was just something people didn’t think about. It was part of the plumbing. Then there were some things which people started not to like, and the benefits were diffuse and inchoate.”

In 2018, he began building the doppelgänger. Using data from the first quarter of 2009 up to the 2016 referendum, Springford pulled together a weighted combination of advanced economies on a similar trajectory to the UK, to create a hypothetical British economy that stayed in the EU. He ran his model from 2018, making the code public so that he could tweak it through feedback.

A major criticism was from the free-market economists Julian Jessop and Graham Gudgin, who argued that the model could not untangle the impact of Brexit from other factors, such as Covid-19 or the fiscal policies of individual states (for example, Donald Trump’s tax cuts in the US). In response, Springford reduced the weight of any individual country in the model. He also suspended it temporarily when the pandemic hit to avoid the wild fluctuations in growth measurements across the world. The liberal economist Jonathan Portes has also critiqued the doppelgänger, pointing out that while it demonstrates a fall in UK growth, it cannot show the reasons why. He believes the negative impact of Brexit on UK GDP is more likely to be around 2-3 per cent.

Springford stopped running his model altogether earlier this year. “The further you get away from 2016, the more shocks that come along that affect countries differently. In the end, the energy-price shock killed the model,” he said.

Brexit’s tremors continue to rattle the country. In August, for the fifth time the UK government delayed imposing post-Brexit import checks on food and fresh produce from the EU. Yet again, this gives continental food producers an advantage, as all fresh food exports from the UK to the bloc do have to undergo checks.

With his tortoiseshell glasses, ginger beard and scuffed brown shoes, Springford, 44, looked every bit the unassuming academic when we met on a park bench in Victoria Tower Gardens, beside the Houses of Parliament. Yet he – or at least the counterfactual country he founded – has become a lightning rod of the lingering Brexit debate. Denounced as “fearmongering” and an “absurd Remainiac report” by Jacob Rees-Mogg last December in an Express column, and even questioned in the House of Lords by another prominent Tory Brexiteer, David Frost.

Springford’s model last reported in summer 2022 that UK GDP is 5.5 per cent lower than that of the doppelgänger, investment 11 per cent lower, goods trade 7 per cent lower, and services trade about equal. When we met, however, Springford painted an even gloomier picture – after revisions of the goods trade figures, he believes the hit was more likely one of 10-15 per cent. Inflation, too, has been exacerbated by Brexit, he argued, referring to LSE research showing Brexit was behind significant rises in food prices. Brexit’s restrictions on low-skilled EU immigration “must have had an impact on inflation” too, he added.

While UK services trade has held up, even emerging as better than the doppelgänger in some early findings, Springford nevertheless argues Brexit’s impact is “definitely negative – the argument is about how negative”. He is particularly concerned about flatlining investment.

“Without investment in new equipment, you can’t get productivity growth – computers deteriorate, machinery starts breaking down, you’re not getting the latest technology,” he warned. “That’s continuing, and that’s really concerning. Without that starting to rise, we’re going to see further costs of Brexit down the road; this is not the end of it.”

Springford is asked “all the time” by European governments and diplomats – particularly in western European and Nordic countries – to visit and talk them through his work. He believes it’s “helpful” to those with growing populist movements. “It’s been pretty effective. If you look at Giorgia Meloni in Italy, Marine Le Pen in France, they’ve all dialled back the Euroscepticism.”

Yet closer to home, he has less of a hearing. Neither the Conservatives nor Labour have engaged significantly with his work – something he “regrets”. “I understand it tactically,” he said. “But after the election, Labour can’t just say ‘we’re going to improve the deal’ when they’ve essentially been saying that Brexit is done and there’s no compelling case for a much closer relationship. Part of that case has to be the impact of Brexit on the economy, and the groundwork isn’t being laid – we need to try and reduce these costs.”