Politics Thread (encompassing Brexit) - 21 June 2017 onwards

[Fox Ulike]

22 minutes ago, MattP said:

I haven't said I expect the EU to act differently, if you read my thoughts after the decision I said the EU would be difficult to deal with, one of the first things I did last year was read "Adults in the Room" to give myself an insight int what these people are like, I still think common sense will win through in the end and some deal will be done, even if very late, despite the "block of 27" we hear about, the reality is we are dealing with negotiators who have red lines written for them by France and Germany - plus the EU is being besiged by problems at the minute and Catalonia could bring the whole thing down, Brexit might not even be their biggest concern come March 2019.

 

As for the question as why the electorate made that decision, I couldn't possibly speak for 17.4million people but;

 

I'd imagine it was a variety of things, but one thing I think those people did virtually all have in common was to have come to value being an independent sovereign nation over one that answers to higher bodies outside it's own constitituions, I made the decision that for us to be able to do our own trade deals and be outside the jurisdiction of the ECJ would override the financial impact, I'd imagine many more did so for reasons like border control. One of the biggest mistakes politicians make now is still sitting on the Bill Clinton "it's the economy stupid" line, a lot more matters.

 

The same point you make about leaving the EU stands with current Labour policy as well, it's almost identical, it's a view held by the majority of politicians, economists, business leaders etc that they would be a disaster for the economy, but maybe a lot of people feel living in a poorer but fairer society is a price worth paying and that's why they are voting that way.

OK. And if that financial impact turns out to be 18% off GDP by 2030... that's a price worth paying?

[Guest MattP]

3 minutes ago, Fox Ulike said:

OK. And if that financial impact turns out to be 18% off GDP by 2030... that's a price worth paying?

Yes. You either believe in sovereignty or you don't. If you are prepared to sell it you didn't deserve it in the first place. But if it's anything like that our government (s) will have completely failed.

 

Although why anyone would pay any attention to those sort of predictions is beyond me, our treasury or forecasters can't predict how big our economy will be right now in November last year so taking anything seriously now that's predicted to happen 13 years into the future is fantasy. Given the amount of global trade in percentage terms is decreasing from the EU and increasing from the ROTW to come to that conclusion you would have to almost be assuming we do nothing with Europe at that point and retain stagnent with all other extrenal markets.

 

Time for me to dip out and do some work, I'm a busy man today.

 

[Guest]

23 minutes ago, MattP said:

Hitting small business with wage hikes and tax increases while the richer ones can vanish to places like Ireland as you have stayed in the SM?

 

Absolutely terrible, if that's in your manifesto in 2022 you'll get hammered.

 

 

The labour wage hike was only a little bit more than the proposed tory wage hike.

Small businesses will have to pay a little bit more tax but potential customers will have more spending power.

The same for big business only with tax years of a bit more. Still to less than they were paying quite happily in 2010.

If companies leave the uk.it will be because of Brexit not because of a corporation tax which should still be lower than in much of europe.

[Guest]

5 minutes ago, MattP said:

Yes. You either believe in sovereignty or you don't. If you are prepared to sell it you didn't deserve it in the first place. But if it's anything like that our government (s) will have completely failed.

 

Although why anyone would pay any attention to those sort of predictions is beyond me, our treasury or forecasters can't predict how big our economy will be right now in November last year so taking anything seriously now that's predicted to happen 13 years into the future is fantasy. Given the amount of global trade in percentage terms is decreasing from the EU and increasing from the ROTW to come to that conclusion you would have to almost be assuming we do nothing with Europe at that point and retain stagnent with all other extrenal markets.

 

Time for me to dip out and do some work, I'm a busy man today.

 

We're already a sovereign nation. We have to comply with ecj rules in.The same way that we will have to comply with an intermediary courts rules for every free trade deal we enter. It's absolute nonsense.

[Innovindil]

23 minutes ago, toddybad said:

We're already a sovereign nation. We have to comply with ecj rules in.The same way that we will have to comply with an intermediary courts rules for every free trade deal we enter. It's absolute nonsense.

I don't think that word means what you think it means. 

[Realist Guy In The Room]

16 minutes ago, Innovindil said:

I don't think that word means what you think it means. 

I just think of the classy rings from the 90's everyone bought from Half Price Jewellers.

 

 

[Fox Ulike]

22 minutes ago, Innovindil said:

I don't think that word means what you think it means. 

I think it probably means different things to different people.

 

The point about the EU though is that, in order to trade with the EU, a 'sovereign' UK will still have to abide by the exact same set of rules and regulations that cover business and trade as we already do now!

 

 

"Sovereignity" in this context means very little. It's pointless. Apart from the potentially crushing 10-year recession, there will be effectively zero change in the lives of 99% of British people once we are "free of the EU shackles".  

 

Bear in mind those shackles only cover things such as Employment Rights, Environmental Protection and Food Standards anyway!  The EU is effectively a way of standardising the areas of our law-making to make things like trade and travel smoother.

[Strokes]

1 hour ago, Alf Bentley said:

 

You might be right that the extra cost of tariffs would be offset by the depreciation of sterling. However, that doesn't address the issue of non-tariff barriers (extra customs procedures, monitoring of compliance with EU regulations and standards etc.), which most experts see as more important. In the medium-term, such barriers could make British firms less competitive/profitable and risk international corporations shifting investment to EU nations where they can be more competitive/profitable.

The trade barriers are not particularly harsh, plenty of countries operate within the single market on WTO terms.

Quote

 

Surely sterling depreciation brings other problems, too? Dearer imports, potentially lower investment, higher inflation, potentially lower real incomes, dearer foreign holidays etc.

Dearer imports yes but we have the power to remove trade restrictions from elsewhere and we dont have to apply tarrifs on imports. Its up to us.

 

The sterling devaluation im talking about has already happened, so the market has already reacted. Its not hugely savage out there.

Quote

 

 

Why would other nations/foreign firms offer more competitive deals to an isolated medium-sized nation (UK) than to the world's largest integrated trading bloc (EU)? Surely they will base such decisions on their own self-interest and on how far that is achievable? Surely they'll see bigger gains in volume to be made from trading with the much larger EU market - and more scope for driving a harder deal with the UK, knowing that it is desperate for new trading partners? This is particularly true, surely, when most of our potential alternative trading partners are large/rising trading nations (USA, China, India, Japan, SE Asia, Brazil etc.)  

Our deal with these countries will be better because currently they dont have a deal with the EU. The EU seeks so much protection, it hampers itself from the outside.

 

Going on WTO terms is the only way to rid ourselves from the european union, any deal done will only benefit them and harm us.

[Strokes]

2 hours ago, Fox Ulike said:

I can wait.

 

Worrying, I don't have to go very far to find research that disproves what you're saying. There are various reports in the press today about Rabobank's latest assessment:

 

http://metro.co.uk/2017/10/11/hard-brexit-would-cost-400-billion-wipe-18-off-gdp-and-cause-a-recession-6994076/

 

A ‘no deal’ hard Brexit would plunge the country into an immediate recession, according to a new report. The potential Tory plan would cost the British economy £400 billion and wipe 18% off GDP growth by 2030, investment firm Rabobank warned

 

How do you feel when you read stuff like that? 18% off GDP!!

An immediate recession? Is there such a thing? A recession takes six months to come about from a trigger point, so with hyperbole like that i would positively ignore the rest of it as biased claptrap.

[Guest Kopfkino]

The IEA has produced a gem today, reflecting on a column piece from George Monbiot (and pointing out similar pieces from a range of, mainly left wing, journalists) welcoming recession because people had become too rich. How ironic given the comments of the same publication and its mouthpieces on here/anywhere. 

The piece:

https://www.theguardian.com/commentisfree/2007/oct/09/comment.economy

A quote of particular interest:

"I now live in one of the poorest places in Britain [rural Wales – CJS]. The teenagers here have expensive haircuts, fashionable clothes and mobile phones. Most of those who are old enough have cars, which they drive incessantly and write off every few weeks. Their fuel bills must be astronomical. They have been liberated from the horrible poverty that their grandparents suffered, and this is something we should celebrate and must never forget."

 

and the IEA's comments

https://iea.org.uk/remember-the-real-champtions-of-austerity-george-monbiot-and-the-eco-miserabilists/

 

[Fox Ulike]

23 minutes ago, Strokes said:

An immediate recession? Is there such a thing? A recession takes six months to come about from a trigger point, so with hyperbole like that i would positively ignore the rest of it as biased claptrap.

Well I think you've answered your own question there. The recession will be triggered at Brexit. It will be reported 6 months later when economic data is collected. Semantics.

 

You're ignoring an independent report, by a Dutch Bank with no vested interests in Brexit, as 'biased claptrap', because of a point of semantics.

[Strokes]

1 minute ago, Fox Ulike said:

Well I think you've answered your own question there. The recession will be triggered at Brexit. It will be reported 6 months later when economic data is collected. Semantics.

 

You're ignoring an independent report, by a Dutch Bank with no vested interests in Brexit, as 'biased claptrap', because of a point of semantics.

So not an immediate recession then? There were lots of plays and theories about recessions after the vote, it didnt happen. Whatever these people tell you they cant predict the future and there is no working precedent. So yes, i would ignore it and listen to the theories based on logic i understand.

Why would you assume a dutch bank has no vested interest in brexit?

[katieakita]

11 minutes ago, KingGTF said:

The IEA has produced a gem today, reflecting on a column piece from George Monbiot (and pointing out similar pieces from a range of, mainly left wing, journalists) welcoming recession because people had become too rich. How ironic given the comments of the same publication and its mouthpieces on here/anywhere. 

The piece:

https://www.theguardian.com/commentisfree/2007/oct/09/comment.economy

A quote of particular interest:

"I now live in one of the poorest places in Britain [rural Wales – CJS]. The teenagers here have expensive haircuts, fashionable clothes and mobile phones. Most of those who are old enough have cars, which they drive incessantly and write off every few weeks. Their fuel bills must be astronomical. They have been liberated from the horrible poverty that their grandparents suffered, and this is something we should celebrate and must never forget."

 

and the IEA's comments

https://iea.org.uk/remember-the-real-champtions-of-austerity-george-monbiot-and-the-eco-miserabilists/

 

You will get more sense  than this reading Alan Partridge & Malcolm Tucker's view on Brexit in next weeks Big Issue

[Alf Bentley]

31 minutes ago, Strokes said:

The trade barriers are not particularly harsh, plenty of countries operate within the single market on WTO terms.

Dearer imports yes but we have the power to remove trade restrictions from elsewhere and we dont have to apply tarrifs on imports. Its up to us.

 

The sterling devaluation im talking about has already happened, so the market has already reacted. Its not hugely savage out there.

Our deal with these countries will be better because currently they dont have a deal with the EU. The EU seeks so much protection, it hampers itself from the outside.

 

Going on WTO terms is the only way to rid ourselves from the european union, any deal done will only benefit them and harm us.

 

Many of those countries trading with the EU without a trade deal are nations that have lower production costs as they're at an earlier stage of development, so they're better able to afford it (China, India, SE Asia, Brazil etc.).

Several other EU trading partners DO have a trade deal (Japan, Canada) or are part of a customs union (Turkey) or pay to benefit from single market access via EFTA/EEA (Norway, Switzerland etc.). Large US firms benefit from scale economies.

 

I'm not sure British firms would be pleased to see us cancel import tariffs and subject them to competition from cut-price imports - unless they reciprocally gain greater access to markets abroad, easier said than done (generally via a trade deal).

 

I appreciate that the sterling devaluation has already happened (though there could be further devaluations). I also appreciate that it hasn't destroyed the economy, but we've probably only had part of the market reaction. Decisions on investment tend to be less immediate, but can have longlasting impact and serious knock-on effects. Likewise, some firms are accepting lower profitability due to dearer imports in the short-term but might not be able to sustain that longer-term, so might have to choose between raising prices, cutting purchases/staffing or relocating. Likewise, the public might tolerate having lower real incomes and being unable to take foreign holidays for a year or two (and economically the latter is offset by greater numbers of foreigners holidaying in bargain basement Britain). But I'm not sure how long the public will tolerate being poorer and having to holiday in Skegness instead of Spain.

 

Ultimately, I suppose you're just optimistic about the impact of a hard Brexit on the British economy and society - and I'm pessimistic. Neither of us is able to predict the future accurately. Have to wait and see, I suppose.

[Fox Ulike]

2 minutes ago, Strokes said:

So not an immediate recession then? There were lots of plays and theories about recessions after the vote, it didnt happen. Whatever these people tell you they cant predict the future and there is no working precedent. So yes, i would ignore it and listen to the theories based on logic i understand.

Why would you assume a dutch bank has no vested interest in brexit?

OK so what are your theories and logic?

 

I assume Rabobank has no vested interest in stopping Brexit because there is absolutely no evidence of any. They're an investment bank who are interested in their profits and their shareholders! Do you think that they are part of the conspiracy to sabotage the will of the British people?

 

Again (and I keep asking you this!), if you have any sources or evidence or facts to back up anything that you're saying - then share them!!

 

[Strokes]

1 minute ago, Fox Ulike said:

OK so what are your theories and logic?

 

I assume Rabobank has no vested interest in stopping Brexit because there is absolutely no evidence of any. They're an investment bank who are interested in their profits and their shareholders! Do you think that they are part of the conspiracy to sabotage the will of the British people?

I dont think anything of them, i had never heard of them until this exchange but given that the financial hub of europe is in London, i would imagine any bank to be wary of any change to the status quo. Ask yourself this, why have they even produced this report if they have no vested interest in it? Its hardly the actions of a capitalist bank to do something for no gain is it?

1 minute ago, Fox Ulike said:

Again (and I keep asking you this!), if you have any sources or evidence or facts to back up anything that you're saying - then share them!!

 

And i did answer that, its not going to be difficult but if you are impatient, just google what the terms are for WTO and then look at the sterling devaluation. Its not a complicated logic.

[Fox Ulike]

1 minute ago, Strokes said:

I dont think anything of them, i had never heard of them until this exchange but given that the financial hub of europe is in London, i would imagine any bank to be wary of any change to the status quo. Ask yourself this, why have they even produced this report if they have no vested interest in it? Its hardly the actions of a capitalist bank to do something for no gain is it?

And i did answer that, its not going to be difficult but if you are impatient, just google what the terms are for WTO and then look at the sterling devaluation. Its not a complicated logic.

They're an investment bank. That means their business is in predicting the financial future. They've produced this report ("biased claptrap") to assess the impact of Brexit on Dutch business.

 

It is complicated for me. I'm not an expert in economics. You're saying that the devaluation in sterling will be offset by the increased tariffs that export businesses will have to pay?

 

Yeah OK I can see that. Fair doos. Will this be a general rule that will benefit most British businesses or will it only apply to a small set of businesses with a particular profile?

 

Is the devaluation of sterling likely to stay permanent?

[Strokes]

20 minutes ago, Fox Ulike said:

They're an investment bank. That means their business is in predicting the financial future. They've produced this report ("biased claptrap") to assess the impact of Brexit on Dutch business.

So like i say, they do have a vested interest in its findings. That doesnt mean its wrong of course. I just doubt its sincerity when it uses hyperbole.

20 minutes ago, Fox Ulike said:

 

It is complicated for me. I'm not an expert in economics. You're saying that the devaluation in sterling will be offset by the increased tariffs that export businesses will have to pay?

Yes thats my arguement. The cliff edge has a bouncy castle at the bottom.

20 minutes ago, Fox Ulike said:

 

Yeah OK I can see that. Fair doos. Will this be a general rule that will benefit most British businesses or will it only apply to a small set of businesses with a particular profile?

Any business that trades into the EU will see their prices at sell at more or less the same competitive price it was in 2016, if we exit now under WTO and sterling remained stable. Buying in, if we apply tarrifs (which we are not obliged too) would be roughly 20 -25% higher. However we can purchase from more competitive markets for groceries and raw materials with less restriction.

20 minutes ago, Fox Ulike said:

 

Is the devaluation of sterling likely to stay 

I dont know, im not going to pretend i can predict things like currency values.

 

[Fox Ulike]

24 minutes ago, Strokes said:

So like i say, they do have a vested interest in its findings. That doesnt mean its wrong of course. I just doubt its sincerity when it uses hyperbole.

Yes thats my arguement. The cliff edge has a bouncy castle at the bottom.

Any business that trades into the EU will see their prices at sell at more or less the same competitive price it was in 2016, if we exit now under WTO and sterling remained stable. Buying in, if we apply tarrifs (which we are not obliged too) would be roughly 20 -25% higher. However we can purchase from more competitive markets for groceries and raw materials with less restriction.

I dont know, im not going to pretend i can predict things like currency values.

 

OK. It's a good argument and one i haven't considered - and it has made me feel better about things. However, the whole thing though does seem to hinge on sterling remaining low over a very long-term period, and we don't know if this will happen. Secondly, there's no indication of whether sterling devaluation is a factor that will affect the majority of export businesses, or just a select few. This is absolutely key. Finally, I'd always thought of the devaluation of sterling as a negative thing. Aren't there other implications of a long-term devalued currency that need to be included in your argument?

 

So I think you have a good point but you haven't explored it deeply enough for me to be convinced. Plus, I can't accept your rejection of the Rabobank report purely on the basis of your perceived mis-use of a single word - 'immediate',-  which appeared in the newspaper report of the article, and doesn't actually affect the substance of the report itself.

 

I'm trying to get a fair view of both sides of the argument so that I can form an opinion. You seem to be 'cherry-picking' suitable arguments to fit your existing opinion, and refuse to consider any evidence that contradicts it on the flimsiest of reasoning.

 

My search continues...

[Buce]

2 hours ago, Alf Bentley said:

 

Many of those countries trading with the EU without a trade deal are nations that have lower production costs as they're at an earlier stage of development, so they're better able to afford it (China, India, SE Asia, Brazil etc.).

Several other EU trading partners DO have a trade deal (Japan, Canada) or are part of a customs union (Turkey) or pay to benefit from single market access via EFTA/EEA (Norway, Switzerland etc.). Large US firms benefit from scale economies.

 

I'm not sure British firms would be pleased to see us cancel import tariffs and subject them to competition from cut-price imports - unless they reciprocally gain greater access to markets abroad, easier said than done (generally via a trade deal).

 

I appreciate that the sterling devaluation has already happened (though there could be further devaluations). I also appreciate that it hasn't destroyed the economy, but we've probably only had part of the market reaction. Decisions on investment tend to be less immediate, but can have longlasting impact and serious knock-on effects. Likewise, some firms are accepting lower profitability due to dearer imports in the short-term but might not be able to sustain that longer-term, so might have to choose between raising prices, cutting purchases/staffing or relocating. Likewise, the public might tolerate having lower real incomes and being unable to take foreign holidays for a year or two (and economically the latter is offset by greater numbers of foreigners holidaying in bargain basement Britain). But I'm not sure how long the public will tolerate being poorer and having to holiday in Skegness instead of Spain.

 

Ultimately, I suppose you're just optimistic about the impact of a hard Brexit on the British economy and society - and I'm pessimistic. Neither of us is able to predict the future accurately. Have to wait and see, I suppose.

 

[Guest Kopfkino]

The problem with many of these models for the economy after Brexit is that there is not a lot of evidence of forward-thinking actors altering their behaviour in anticipation of this. We see today that London has extended its lead as the best city in the world for attracting business and talent. It is expected to increase its output at a compound rate of 2.4% until 2021, higher than other major EU cities. Granted this is based on the assumption of a smooth exit and an FTA but it's still at odds with Rabobank's FTA model. Rabobank's report (which having read it, I believe it is actually interesting and quite good) seems to make a huge assumption of a heavy hit to financial services. Just a few weeks ago, London extended its lead as the world's top financial centre, with the City creating 17% more jobs. London continues to extend its dominance of Europe's fintech and startup scene (I believe Stockholm leads in per capita terms). Not what you would expect if some of these predictions are to be believed. Admittedly, a no deal situation provides a huge exogenous shock that throws this all out and Rabobank may well be right on that front. But the predictions for an FTA situation still seem rather pessimistic when you consider business seems to be expecting that situation and is not behaving in a way you might expect if that were to come true. The point is, you would expect a shift now if it were to be true. 

[lifted*fox]

[Webbo]

7 hours ago, Alf Bentley said:

 

 

 

Btw. Your analogy is unwittingly ironic. I've been involved in divorce negotiations for 6 months! In my case, "the woman" has been unreasonable about capital, but reasonable about access and maintenance. Fingers crossed negotiations are (finally) making better progress than EU v. UK!  

I'm genuinely sad to hear that Alf. All the best for the future.

[Strokes]

5 hours ago, Alf Bentley said:

 

Many of those countries trading with the EU without a trade deal are nations that have lower production costs as they're at an earlier stage of development, so they're better able to afford it (China, India, SE Asia, Brazil etc.).

Several other EU trading partners DO have a trade deal (Japan, Canada) or are part of a customs union (Turkey) or pay to benefit from single market access via EFTA/EEA (Norway, Switzerland etc.). Large US firms benefit from scale economies.

 

I'm not sure British firms would be pleased to see us cancel import tariffs and subject them to competition from cut-price imports - unless they reciprocally gain greater access to markets abroad, easier said than done (generally via a trade deal).

 

I appreciate that the sterling devaluation has already happened (though there could be further devaluations). I also appreciate that it hasn't destroyed the economy, but we've probably only had part of the market reaction. Decisions on investment tend to be less immediate, but can have longlasting impact and serious knock-on effects. Likewise, some firms are accepting lower profitability due to dearer imports in the short-term but might not be able to sustain that longer-term, so might have to choose between raising prices, cutting purchases/staffing or relocating. Likewise, the public might tolerate having lower real incomes and being unable to take foreign holidays for a year or two (and economically the latter is offset by greater numbers of foreigners holidaying in bargain basement Britain). But I'm not sure how long the public will tolerate being poorer and having to holiday in Skegness instead of Spain.

 

Ultimately, I suppose you're just optimistic about the impact of a hard Brexit on the British economy and society - and I'm pessimistic. Neither of us is able to predict the future accurately. Have to wait and see, I suppose.

I admit i may be looking at things with a positive slant but i genuinely believe that things can be better far outside the union and that the severity of leaving the single market with no deal is overstated. As with all big decisions and changes there will be winners and losers but being in the union isnt exactly a bed of roses, with no victims.

I wont be upset if we do a deal, i wont be upset if we pay a huge divorce bill, i wont be upset if there is a transition, i will be upset if we end up with a soft brexit and we end up with all the bad parts of being a member of the Union but less of the positive aspects.

 

[Lionator]

19 minutes ago, Strokes said:

I admit i may be looking at things with a positive slant but i genuinely believe that things can be better far outside the union and that the severity of leaving the single market with no deal is overstated. As with all big decisions and changes there will be winners and losers but being in the union isnt exactly a bed of roses, with no victims.

I wont be upset if we do a deal, i wont be upset if we pay a huge divorce bill, i wont be upset if there is a transition, i will be upset if we end up with a soft brexit and we end up with all the bad parts of being a member of the Union but less of the positive aspects.

 

And this is why this decision should never have been given to the public in the first place (that's not a dig at you by the way). At no point was it outlined how we would leave if leave won and what the consequences would be, people assumed there would be one simple pathway, well turns out there isn't and we're heading the economic abyss. I think Philip Hammond may resign before the Primeminister as the only credible member of the Tory front bench.