Brexit Referendum Superthread

Chips Lovell

Deleted User wrote: »

If anyone missed the speech, good synopsis here.
http://www.telegraph.co.uk/news/2016/09/29/liam-fox-signals-britain-will-leave-the-single-market-in-hard-br/

It's.... ambitious.

Can't decide if he's hopelessly optimistic or bluffing.

Lemming

Jep Gambardella wrote: »

It's.... ambitious.

Can't decide if he's hopelessly optimistic or bluffing.

You forgot option #3: batsh1t f*cking deluded. See exhibit 'A' below

bath1t deluded exhibt A wrote:

Dr Fox, the International Trade Secretary, also warned EU leaders that they must negotiate a free trade deal with the UK post-Brexit or European citizens will suffer the consequences.

Nooooot a good sign of having a grasp on common sense or reality. Doubly so given that the UK stands to lose out significantly more here than other EU nations regards inconvenience given the demographic of UK citizens abroad is overwhelmingly in the older age categories.

Zubeneschamali

Fox: "Fog in English channel, continent cut off".

karma_

Jep Gambardella wrote: »

It's.... ambitious.

Can't decide if he's hopelessly optimistic or bluffing.

Jesus, just listened to that, they are about as far out of touch with what the electorate voted for as it's possible to be. It's becoming increasingly obvious these idiots have no idea what they are doing.

Nissan talking straight
http://www.telegraph.co.uk/business/2016/09/29/nissan-seeks-brexit-compensation-deal-before-making-uk-investmen/

“If I need to make an investment in the next few months and I can’t wait until the end of Brexit, then I have to make a deal with the UK government,” he said.

He continued: “You can have commitments of compensation in case you have something negative. “If there are tax barriers being established on cars, you have to have a commitment for carmakers who export to Europe that there is some kind of compensation.”

djpbarry

A Tyrant Named Miltiades! wrote: »

If the UK can focus on redeveloping its industrial base, presumably in the north of England, it can probably come out of Brexit fairly unscathed, and in fact outperform the rest of the EU.

That’s a massive ‘if’ – I don’t really see how being outside the EU makes the realisation of a Northern Powerhouse more likely.

A Tyrant Named Miltiades! wrote: »

the problem is not that UK can't manufacture, the problem is that it is currently focused on the export of sophisticated goods.

Which is what an advanced economy should be focussed on. Creating jobs in “unsophisticated manufacturing" is a terrible idea – it would be a massive, protectionist leap backwards.

A better idea would be to address the educational shortfall that exists in the native labour force to equip more people with the necessary skills to work in “sophisticated manufacturing” or other industries.

djpbarry

swampgas wrote: »

Engineering in the UK is almost a dirty word, despite some excellent engineering companies which prove the rule. Compare with Germany or Ireland where engineering is (broadly speaking) a respected occupation.

I would say the term “engineer” is abused just as much in Ireland as it is in the UK – anyone with a screwdriver refers to themselves as such. But I agree with your general point – most of the UK seems relatively unaware of Britain’s engineering heritage.

djpbarry

Deleted User wrote: »

If anyone missed the speech, good synopsis here.
http://www.telegraph.co.uk/news/2016/09/29/liam-fox-signals-britain-will-leave-the-single-market-in-hard-br/

The arrogance and hypocrisy of the man is staggering. Brexit is apparently going to lift the entire developing world out of poverty, because the unlike the big, bad EU, the glorious UK doesn't do protectionism...



...except when it comes to the labour market, that is.

Bob24

May has now set a deadline for triggering article 50 - by the end of March: http://www.bbc.co.uk/news/uk-politics-37532364

Barnier also officially started his appointements as chief Brexit negotiator for the EC yesterday: http://en.rfi.fr/europe/20161001-frances-barnier-becomes-eu-commissions-brexit-boss

With Labour in the U.K. re-electing Corbyn as a leader (not a great EU supporter) it now looks like the wheels are definitely in motion and the voices asking to reconsider the decision are fading away.

indioblack

Bob24 wrote: »

May has now set a deadline for triggering article 50 - by the end of March: http://www.bbc.co.uk/news/uk-politics-37532364

Barnier also officially started his appointements as chief Brexit negotiator for the EC yesterday: http://en.rfi.fr/europe/20161001-frances-barnier-becomes-eu-commissions-brexit-boss

With Labour in the U.K. re-electing Corbyn as a leader (not a great EU supporter) it now looks like the wheels are definitely in motion and the voices asking to reconsider the decision are fading away.

The Act of Parliament that allowed the referendum vote had no mechanism, as far as I know, to permit another vote. There was no threshold, nothing as regards turnout that would trigger a second referendum.
Cameron kept saying throughout the campaign that it was an in-out vote.
Like so many aspects of this whole business, I think this was another example of lack of thought, foresight and interest in what was happening and what would be the result of a Leave majority.
As one of 14 million who voted to remain, I understand that I am now part of Europe - but not part of Europe!
If that sounds a bit unclear, then I must be as aware of what's going on as many of those at present sitting in Parliament!

Leonard Hofstadter

I've listened to some of the things that have come out of the Tory party conference today.

Davis is a man full of contradictions. On the one hand, there is a lot of talk about Britain becoming a 'great' nation once again, and being able to control everything. On the other, they want the EU to succeed. If they wanted the EU to succeed, then why the hell did they have a vote on the EU, and why did he campaign for a leave vote?

I am reassured by some of the things that have been said, that basically once the UK leaves the EU, they're going to keep all existing EU rules, and stuff on workers rights. Reassuring as it means nothing will change (I voted for remain), but it makes a mockery of the leave vision of the UK being able to do whatever they wanted and getting rid of all these supposedly awful EU laws.

I am also reassured by Ms May's insistence that the UK will remain a global player on the world stage, and that they haven't turned their backs on the rest of the world, despite the idiotic vote of 17.4 million Brits to say up yours to their supposed 'friends' in the EU.

It does amuse me how delusional the Tories are. They assume that the EU is going to give them all the benefits they currently have, with none of the drawbacks, like immigration and the supremacy of EU law. I certainly wouldn't object to them bringing back the old idea of denying prisoners the right to vote (something they are not allowed do under EU rules) and not everything about the EU is so good, as evidenced by their appalling treatment of Ireland with Applegate.

All that said, I don't see why the EU would, or should, give them everything they want. If that was the case, sure we might as well all leave the EU and not bother with an EU at all (that would be fun to say the least given that we have a common currency, though in truth we should never have surrendered our currency for the Euro; while FF is the principal cause of the last recession, it would have been an awful lot less difficult had we control of our currency, we could have slashed interest rates and heavily devalued the punt to make the country competitive and thus enable us to export and attract inward investment - both tourist and financial, it would also have discouraged people from holidaying abroad because of course a weak currency makes going abroad more expensive). Being in the EU is supposed to be better than not being in it - for us we are only 4 million but we have the ability to sell our goods and services without any customs or tariffs to 500 million, we have the ability to freely live and work in 27 other countries.

Because of our unique links (historical and otherwise) with the UK, our economy is heavily dependent on the UK's and thus we have a vested interest in the UK doing reasonably well outside of the EU. That said, there are some things which we can poach off them, I don't see any reason for us to want financial services to continue having passporting rights, they could easily be in the IFSC. There are also various EU research centres which are currently in the UK, as we will soon be the only English speaking nation in the EU we ought to be persuading these centres to relocate to Ireland. To paraphrase Ms May, we in Ireland must make a success of Brexit and we must be able to persuade these services and industries that they can relocate to Ireland, we can even promise them that moving to Ireland won't be all that different; same legal system, similar culture, same language etc. Mind you, we would want to get our tax system in order, in the UK you don't pay the top rate of tax until you're earning €50k, that's €16,000 more than when the top rate kicks in in Ireland, it's beyond ridiculous and yet there's no sign of any action by this minority Government. The sooner FG gets rid of Enda and an election is called, the better. Hopefully FG will get a good poll boost as a result of a leadership change and we can have a proper majority Government with proper FG policies rather than the awful populist rubbish that's going on at present. FG are in office but not in power at the moment.

Nody

Well based on May's speech we know it's going to be a hard brexit without access to the single market, how? Because she insists on not being under the jurisdiction of European Court of Justice which governs said single market in the first place. Ergo, no single market access but then trying to get individual deals for each area which no one in EU has an interest in doing. To bad I can't short house prices in the Midlands around the car manufacturing plants because that's would have been an quick buck when they pull out.

freddyuk

It is not really that hard to understand...... the EU control over the UK will be repealed by an Act of parliament which hands back all control to the UK. All the rules will stay in place because not all the EU regulations will be cancelled! The UK will decide then over time which rules they want to change and which they want to keep. This way industry and the population is not left in a state of panic that all the "benefits" will disappear in 2017. That seems a very sensible approach. If anyone thinks this can be unpicked in a couple of months they are dreaming but UK will take back full control in 2017. That is what was voted for. Whether the UK gets access to the free market of the EU is what all the negotiations will be about over the coming months and the UK government is not going to undermine those negotiations by publicising their every move as that would be madness. If there is a section of government that is going to prevent this process going ahead then they should consider their position as servants of the people who voted by a majority.

freddyuk

freddyuk wrote: »

It is not really that hard to understand...... the EU control over the UK will be repealed by an Act of parliament which hands back all control to the UK. All the rules will stay in place because not all the EU regulations will be cancelled! The UK will decide then over time which rules they want to change and which they want to keep. This way industry and the population is not left in a state of panic that all the "benefits" will disappear in 2017. That seems a very sensible approach. If anyone thinks this can be unpicked in a couple of months they are dreaming but UK will take back full control in 2017. That is what was voted for. Whether the UK gets access to the free market of the EU is what all the negotiations will be about over the coming months and the UK government is not going to undermine those negotiations by publicising their every move as that would be madness. If there is a section of government that is going to prevent this process going ahead then they should consider their position as servants of the people who voted by a majority.

This is about it exactly.

The UK government appear to be aiming for a very hard 'reset' position (which imo was the only realistic option given the narratives of the relevant campaigns) and will assess what this means with regards to their relationships with the EU and all others after-the-fact.

I'd be able to argue that this is pragmatic, but also am able to see the costs that this will incur, costs both to the UK and also to the EU that remains and am disappointed in it.

The binary nature of the referendum question "simple in out" makes it very hard for someone to argue the grey areas. Very, very hard for someone to suggest "it means no EU but yes EFTA (Switzerland)" and even harder for someone to suggest "leave EU parliament but keep all else (Norway)".

It makes a mockery of Farron's position too unfortunately.

Nody

freddyuk wrote: »

Whether the UK gets access to the free market of the EU is what all the negotiations will be about over the coming month

Except the part you apparently miss which is the free markets are decided by the EU court which UK refuse to have as a judge. This means that there will be no free market access for the UK because one of the requirements for said free market access is said court to be the decider of disputes. Ergo the hard brexit will be at best on WTO terms (which UK can't apply automatically because they are not a member of the WTO and every country in WTO needs to approve their application once they left EU) or piece meal deals which no EU state has any interest in giving them.

This will also tie in to such deal such as European warrants (done under EU law; will no longer be applicable for them as it's governed by EU courts) sharing information (governed by EU courts; no longer allowed) and handing people over to UK (likely to be blocked by EU court of human affairs). This will lead to criminals running to EU without being able to be extradited (both ways) and that terrorist information can't be shared because the most important thing for UK is that they can decide who enters their country (but at the cost of the things that actually matters).

Zubeneschamali

freddyuk wrote: »

Whether the UK gets access to the free market of the EU is what all the negotiations will be about over the coming months

UK: Please?
EU: Non.

UK: Pretty please?
EU: Nein.

UK: Pretty please with bells on?
EU: Nee.

UK: Pretty please with bells on and silver buttons down the back?
EU: That's your two years up, bye-bye!

Jim2007

freddyuk wrote: »

Whether the UK gets access to the free market of the EU is what all the negotiations will be about over the coming months and the UK government is not going to undermine those negotiations by publicising their every move as that would be madness.

If the UK refuses to accept Europe Court rulings and rejects FMOP, then we know the outcome, there will be no access to the single market and will exit the EU as a third country to face WTO level tariffs! If it continues this way then the negotiations may take hours and days rather that an months and years as originally expected.

Clearlier

Clearlier wrote: »

I used the term quite carefully actually, I didn't exaggerate, if anything I understated the case. You really could not be much more wrong with your prescription for the British economy. If you can find even one, just one, semi-respected economist who would think that any part of Britain should start manufacturing 'unsophisticated' goods then I'll show you a crackpot and frankly I don't believe that you'll find one notwithstanding the number of crackpots out there. N.B. I said economist not politician.

This is basic economics. Again I suggest that you look up the law of comparative advantage

This is bizarre, and so is your reliance on the Law of Comparative Advantage.

Do you even know what unsophisticated products are? Milk is as unsophisticated product. Bread. British Beef. Craft Beers. In fact, the relative lack of self-sufficiency in British food, which has been diminishing in recent years, is a serious problem and is an obvious area that should be grown.

I'm not suggesting that Britain becomes the shipbuilding capital of the world again for Christ's sake. Britain needs to continue its growth trajectory in sophisticated goods and services exports, but the British economy can walk and chew gum at the same time. Whilst growing the production of sophisticated products, there is also capacity to grow capacity of unsophisticated products with low price-elasticity of demand that the UK currently imports, and the food industry is an obvious place to begin.

The "inevitable, sustained depreciation of sterling" is anything but inevitable

To most people, it's inevitable.

Pick up a newspaper on your way to work in the morning, won't you?

The depreciation of sterling brings great benefits for UK exports, but it also poses a serious problem for the UK given the over-reliance on UK households on price-inelastic imports of unsophisticated products. The UK can grasp two opportunities here: increase its exports, and increase its self-sufficiency where possible in order to mitigate the negative effects of depreciation.

djpbarry wrote: »

Creating jobs in “unsophisticated manufacturing" is a terrible idea – it would be a massive, protectionist leap backwards.

This thread is hilarious at times.

Nobody is suggesting a Churchillian utopia with thousands of City bankers donning greasy overalls and marching north to the shipyards ffs. But the idea that unsophisticated manufacturing=bad is so daft I hardly know where to begin. I suppose you think France, which is Europe's most self-sufficient country in agriculture, should down tools and retrain its workforce in cell biology and quantum physics.

"Creating jobs in unsophisticated manufacturing is a terrible idea". That's an absurdly stupid comment in fairness.

Stable economic planning requires a country to have a diverse basket of manufactured products, including reasonably basic items that are produced for the domestic market, such as food production.

Which unsophisticated products do you think the UK could/should produce more of Tyrant {instead of importing}?

Let's go nuts and go for a 30% currency devalution and a 10% tariff and all gets added to the price of the imported unsophisticated good.

Do you think that there is indigenous capacity that it currently so underutilized that can replace that import entirely? Or offer itself as a substitute at a comparable price even considering that huge overnight price hike?

Very useful information available here
https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/datasets/publicationtablesuktrade

With the bulletin synopsis here - http://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/uktrade/july2016#longer-term-perspective-sterling-depreciation-and-trade

Top 30 Commodity Imports available on Sheet '15.Top 30 Commodities'
IMPORTS

Value % of Total Cumulative
Commodity Division £ million UK Imports percentage

Electrical machinery 716+75+76+77 53 469 13.1 13.1
Mechanical machinery 71:74 minus 716 35 834 8.7 21.8
Cars 781 31 639 7.7 29.5
Medicinal & pharmaceutical produ 54 25 411 6.2 35.7
Other miscellaneous manufactures 80 25 401 6.2 41.9
Road vehicles other than cars 78 minus 781 18 327 4.5 46.4
Clothing 84 18 091 4.4 50.8
Refined oil 334+335 17 296 4.2 55.0
Crude oil 333 11 665 2.8 57.8
Scientific & photographic 87+88 11 493 2.8 60.6
Aircraft 792 10 406 2.5 63.1
Unspecified goods 9 9 356 2.3 65.4
Fuels other than oil 32+34+35 8 945 2.2 67.6
Miscellaneous metal manufactures 69 8 297 2.0 69.6
Vegetables & fruit 05 7 541 1.8 71.4
Plastics 57+58 7 424 1.8 73.2
Organic chemicals 51 6 628 1.6 74.8
Beverages 11 5 823 1.4 76.2
Meat & meat preparations 01 5 762 1.4 77.6
Paper & paperboard 64 5 626 1.4 79.0
Toilet & cleansing preparations 55 5 490 1.3 80.3
Non-ferrous metals excl. silver 68 minus 681 5 140 1.3 81.6
Iron & steel 67 4 991 1.2 82.8
Textile fabrics 65 4 944 1.2 84.0
Footwear 85 4 748 1.2 85.2
Works of art 896 4 110 1.0 86.2
Fertilisers & other chemicals 56+59 4 003 1.0 87.2
Mineral manufactures less precio 66 minus 667 3 849 0.9 88.1
Metal ores & scrap 28 3 210 0.8 88.9
Cereals 04 3 114 0.8 89.7

Sam Russell

In Sunderland, they assemble Japanese Nissan motor cars. To do this, they import engines and gear boxes and lots of other bits that make up 85% of the cost of the car that comes out of the end of the production line.

If tariffs of any magnitude are imposed on imports, this production model will cease to be viable, so production will be moved to Hungary or nearby. Hungary are chasing opportunities in this regard. Loss of British jobs will be the obvious outcome.

The same will happen to BMW Mini production, and the Honda and Toyota production lines. Ford will likely go as well and Opel/Vauxhall. They may retain component manufacture but that depends on competitiveness and exchange rates.

This is a bleak outlook.

A hard Brexit will also affect the City of London, and many operations will move to Paris, Frankfurt or Dublin.

This is a bleak outlook.

Sam Russell

Sam Russell wrote: »

If tariffs of any magnitude are imposed on imports, this production model will cease to be viable, so production will be moved to Hungary or nearby.

Depends if it's offset by lower effective corportation tax, or there's some sort of favourable tax treatment for car manufacturers.

State aid rules won't necessarily apply in a post-Brexit U.K. (if they even already apply, in reality)

Nody

A Tyrant Named Miltiades! wrote: »

Depends if it's offset by lower effective corportation tax, or there's some sort of favourable tax treatment for car manufacturers.

The hit would come when they import them to EU at 10% (WTO rates) twice (UK charging 10% on imported parts, 10% going back to EU); which means you'd not only need to offset the 20% increase (estimated, actual will depend on the classification of the parts rates etc.) compared to a car made on the continent on top of the salary difference and paperwork involved. 20% cost increase on cars having a margin in the single digit range usually...

State aid rules won't necessarily apply in a post-Brexit U.K. (if they even already apply, in reality)

They will; it's called WTO rules which means if UK try to give state aid the EU can increase the tariff accordingly to compensate for the unfair state aid before it spends a few years before actually getting settled.

Nody

Nody wrote: »

The hit would come when they import them to EU at 10% (WTO rates) twice (UK charging 10% on imported parts, 10% going back to EU)

That's a lot of assumptions you're holding onto there.

I suspect Britain will remain part of the customs union. On that basis, there would be no tariffs levied on British exports to the E.U., and no new tariffs would be imposed on British imports for the purposes of automotive production.

You're also totally ignoring the capacity of depreciation of sterling against the euro in mitigating tariffs, even if they were imposed, which is far from certain.

it's called WTO rules which means if UK try to give state aid the EU can increase the tariff accordingly to compensate for the unfair state aid before it spends a few years before actually getting settled.

No, it isn't that simple. Governments are allowed to extend special favours to certain domestic industries of strategic importance, such as by applying counterveiling duties to their competitors. Volkswagen wouldn't be keen on that.

If State Aid rules were as literal as you seem to believe, there would never have been mass bank bailouts. Britain will be entitled to support its car industry if needs be, and the sky won't fall down.

Nody

A Tyrant Named Miltiades! wrote: »

That's a lot of assumptions you're holding onto there.

I suspect Britain will remain part of the customs union. On that basis, there would be no tariffs levied on British exports to the E.U.

There is no way UK will remain part of the free market without free movement of people which May has clearly stated is not going to happen. That means full exit inc. the customs union; anything else is smoking the fun stuff. Yes, Tory keeps claiming they will remain but 27 other countries have told them to sod off if they are not willing to accept free movement of people as well but keep dreaming that somehow UK will pull out the mother of all trump cards somehow (which no one has yet to been able to identify).

, and no new tariffs would be imposed on British imports for the purposes of automotive production.

Sure; pull the other one it has bells on it. UK will do their best to protect their internal production (what's left of it) of parts and you can expect there to be tariffs accordingly but sure; let's say they go with zero tariffs import it still has 10% import rate to EU.

You're also totally ignoring the capacity of depreciation of sterling against the euro in mitigating tariffs, even if they were imposed, which is far from certain.

You are aware that UK would buy said parts in EUR cost and sell them back in EUR, right? So it does not matter if the sterling drops 50% for the parts; only the salaries and average Hungarian factory salary is less than 700 GBP a month.. Do you think UK workers will work for 700 GBP a month?

No, it isn't that simple. Governments are allowed to extend special favours to certain domestic industries of strategic importance, such as by applying counterveiling duties to their competitors. Volkswagen wouldn't be keen on that.

Try to claim that putting cars together (remember most of the stuff is imported) is of strategic importance, please do...

Zubeneschamali

A Tyrant Named Miltiades! wrote: »

he sky won't fall down.

Rose coloured glasses again!

Calina

Nody wrote: »

You are aware that UK would buy said parts in EUR cost and sell them back in EUR, right? So it does not matter if the sterling drops 50% for the parts; only the salaries and average Hungarian factory salary is less than 700 GBP a month.. Do you think UK workers will work for 700 GBP a month?

They might if they have no other choice. After all, Hungarians do.

Nody

Nody wrote: »

There is no way UK will remain part of the free market without free movement of people which May has clearly stated is not going to happen.

What on earth is "the free market"? Do you mean the Single Market?

You do know that Turkey has a customs union agreement with the E.U.? There's no reason to be certain that the E.U. won't be able to reach a customs union agreement with the Union.

At least, not according to this pro-EU, anti-Brexit, former European Commissioner:
https://www.ft.com/content/f3c86306-840e-11e6-8897-2359a58ac7a5

Jaggo

A Tyrant Named Miltiades! wrote: »

What on earth is "the free market"? Do you mean the Single Market?

You do know that Turkey has a customs union agreement with the E.U.? There's no reason to be certain that the E.U. won't be able to reach a customs union agreement with the Union.

At least, not according to this pro-EU, anti-Brexit, former European Commissioner:
https://www.ft.com/content/f3c86306-840e-11e6-8897-2359a58ac7a5

You are aware that the Turkish customs union only covers industrial productions (10-11% of the UK economy), fish and a few other agricultural products.
To get this deal, Turkey giving up allot of powers particularly in making trade deals with other countries and has to accept EU regulations on the products that are for export. None of this would be acceptable to the UK.
It took years to negotiate too.

Anyway from all the statements coming out of London at the moment, it does look like the UK are choosing the hard exit option.

youreadthat

The UK isn't choosing anything other than leaving the EU. Everything else is up to the EU. The inherent inflexibility of the "4 freedoms" means that you are either in or out. The only halfway house is essentially paying to have access and no voice. So for the UK, only hard Brexit or no Brexit makes any sense. All the talk of anything else is smoke and mirrors until the EU gives in a bit. The UK doesn't need to give in as it will adjust eventually, it will benefit and be a happier place from less London-centrism, and it halts it's overpopulation problem which effects every part of life. If anything all the talk of the car industry demonstrate what a folly it is for national security to sink your own industries and make things on behalf of Asians.

Zubeneschamali

youreadthat wrote: »

So for the UK, only hard Brexit or no Brexit makes any sense. All the talk of anything else is smoke and mirrors until the EU gives in a bit.

All the "Hard Brexit" talk reminds me of: