It’s beginning to look as though neither side in the debate about the EU referendum can allow a single day to go by without producing more inflated and sensational claims about the effects of either remaining or leaving.
Today we have a warning from Cameron about the cost of European family holidays. Reading the headlines, one could be forgiven for believing that this is a proven fact – which is, of course, what Cameron wants us to believe – but in fact it’s little more than a back-of-an-envelope calculation based on an unsubstantiated assertion about the impact of Brexit on the value of the pound in the immediate aftermath of an exit vote. So how valid is the assertion?
It does seem probable that Brexit would lead to an immediate short term drop in the value of the pound on international markets. That’s partly based on those people trading in currency believing the gloomy predictions, and partly on them seeing the gloomy predictions as an opportunity to bet against the pound and make some money. Whether such a fall in value would be sustained is a much more difficult question to answer.
But if indeed, it turned out that the new ‘normal’ value of the pound was indeed lower for an extended period, then the claim that it would increase the price of holidays would be a valid one. But not just in Europe, of course; a lower pound would increase the cost of holidays anywhere where people need to pay for things in a currency other than sterling. And indeed, Cameron could legitimately have gone on to say that, assuming his guesstimates are right, any goods or services purchased from ‘abroad’ would be more expensive.
That’s only half the equation, though – because whilst a cheaper pound would make foreign purchases more expensive, it would also make foreign sales more competitive. A fall in the value of the pound isn’t necessarily a wholly bad thing, and as well as exaggerating on the basis of broad unsubstantiated assumptions, Cameron is also guilty of gross over-simplification of a complex question in an attempt to appeal to people to vote on the basis of a very narrow interpretation of their own self-interest.As a supporter of the 'remain' campaign, I find the arguments being made in favour to be increasingly disappointing. I almost wonder if some of them might actually want to lose.