Brexit Referendum Superthread

demfad

On other news the British government just posted the following Brexit FAQ on the their Gov.uk website:
https://www.gov.uk/government/news/frequently-asked-questions

Which is odd because in the gov.uk's website policy it says that FAQ's are 'strongly discouraged'.

Anyway, not to worry the word 'clear' is used about several times in the FAqs so they clearly know what they are doing...

Zubeneschamali

"The Department for Exiting the European Union" is a wonderful title, echoing earlier titles like "The Ministry of Silly Walks" and "The Royal Society for Putting Things On Top of Other Things".

Zubeneschamali

From the FAQ linked above:

Will we remain a member of the Single Market or Customs Union?

As the Prime Minister said: we want British companies to have the maximum freedom to trade with and operate in the Single Market – and to let European businesses do the same here.
There are different aspects to the Customs Union which is why it is important to look at the detail and get the answer right.

In other words, shut up and stop asking Frequently Asked Questions.

Technique

Philip Hammond has admitted the Brexit vote’s blow to the economy would force the government to borrow £122bn more than hoped as he pushed back government plans to balance the books in his autumn statement.

£122bn over 5 years equates to £469m per week.

YCNMIU

Zubeneschamali

Technique wrote: »

£122bn over 5 years equates to £469m per week.

Should've given it to the NHS, I say, what?

Zubeneschamali

Zubeneschamali wrote: »

"The Department for Exiting the European Union" is a wonderful title, echoing earlier titles like "The Ministry of Silly Walks" and "The Royal Society for Putting Things On Top of Other Things".

Don't you mean DExEU?

Bob24

Zubeneschamali wrote: »

"The Department for Exiting the European Union" is a wonderful title, echoing earlier titles like "The Ministry of Silly Walks" and "The Royal Society for Putting Things On Top of Other Things".

I also like the acronym they are using: DExEU. Looks like Germany multiplied by the EU.

demfad

An excellent article here showing why the EU side fear and are preparing for a hard xEU in 2 years time.

Basically:

-2 years negotiating is really 15-16 months as the EU27 have to reply to the UK article 50 letter (2 months) and need time to ratify any article 50 deal.

-Only the article 50 deal and a transitional trade deal could be negotiated in that time frame

-Hard Brexiters wont accept the necessary free movement/ECJ authority that must happen even under a transitional deal.

-Ergo: Hard, messy Brexit in 2019.

robinph

They didn't answer the main question everyone is asking. "Do you have any f**king idea what you are doing?"

solodeogloria

Technique wrote: »

Philip Hammond has admitted the Brexit vote’s blow to the economy would force the government to borrow £122bn more than hoped as he pushed back government plans to balance the books in his autumn statement.

£122bn over 5 years equates to £469m per week.

YCNMIU

Good evening!

I think everyone was aware that there was going to be a cost to Brexit. However, despite this cost in the immediate horizon there are still encouraging reports in respect to the British economy. I feel like there is scope for positive reports in the midst of several prophecies of doom.

UBS is convinced that Sterling will rise and that it will not get significantly lower than its current position. In respect to the economy they said that the UK often underestimates it's place as a safe haven for funds outside of the Eurozone.

Likewise IBM are moving a lot of their operations to the UK in the belief that the UK economy will remain strong after Brexit. Google are in the process of setting up new operations in Kings Cross and Facebook are setting up significant operations in the West End.

I think everyone is in agreement that there will be noticeable costs to Brexit in the short term but nonetheless there's no reason to think that Britain's economy won't remain strong after Brexit or that there won't be new opportunities as a result of Brexit.

Much thanks,
solodeogloria

ancapailldorcha

That's just one opinion. You're welcome to cite some of these reports though.

demfad

solodeogloria wrote: »

Likewise IBM are moving a lot of their operations to the UK in the belief that the UK economy will remain strong after Brexit. Google are in the process of setting up new operations in Kings Cross and Facebook are setting up significant operations in the West End.

The question should be how many have decided against setting up? How many British companies are holding back investment? How many banks are quietly upping sticks? How much has investment really dried up?

IBM, Facebook a small increase, google in new buildings...thats it? in a country of 65 million then its tumbleweed time.

A Dub in Glasgo

solodeogloria wrote: »

I think everyone was aware that there was going to be a cost to Brexit. However, despite this cost in the immediate horizon there are still encouraging reports in respect to the British economy. I feel like there is scope for positive reports in the midst of several prophecies of doom.

UBS is convinced that Sterling will rise and that it will not get significantly lower than its current position. In respect to the economy they said that the UK often underestimates it's place as a safe haven for funds outside of the Eurozone.

Likewise IBM are moving a lot of their operations to the UK in the belief that the UK economy will remain strong after Brexit. Google are in the process of setting up new operations in Kings Cross and Facebook are setting up significant operations in the West End.

I think everyone is in agreement that there will be noticeable costs to Brexit in the short term but nonetheless there's no reason to think that Britain's economy won't remain strong after Brexit or that there won't be new opportunities as a result of Brexit.

http://www.nationaldebtclock.co.uk/

solodeogloria

Good evening!

I don't consider the world's biggest wealth manager expressing confidence in the British economy small.

I don't consider IBM tripling it's data centre capacity to be "small" particularly not when they couple it with this according to Reuters:

IBM Europe's general manger for cloud services, Sebastian Krause, said the investment reflected the strength of the UK economy and the size of the opportunity in cloud computing.

"UK customers truly understand the capabilities of cloud to drive innovation, to be more flexible on their business model, to have better insight for decision making, and to deliver better customer service," he said in an interview.

IBM had evaluated its cloud capacity in Britain before the June "Brexit" vote, he said, but it saw no reason to change course as a result of the decision.

"Everyone has concluded the UK economy will continue to be very strong and there will be significant opportunities with or without Brexit," he said.

Google have said that London is Europe's centre of technology. That's a big thing to say post-Brexit.

The fact is that there are encouragements. Brexit will be costly but it's not true to say that the UK desperately needs the EU in order to be successful.

Much thanks,
solodeogloria

demfad

solodeogloria wrote: »

Good evening!

I don't consider the world's biggest wealth manager expressing confidence in the British economy small.

I don't consider IBM tripling it's data centre capacity to be "small" particularly not when they couple it with this according to Reuters:


Google have said that London is Europe's centre of technology. That's a big thing to say post-Brexit.

The fact is that there are encouragements. Brexit will be costly but it's not true to say that the UK desperately needs the EU in order to be successful.

Much thanks,
solodeogloria

Ofcourse they are going to talk it up, but there are only a few of them.
Today in the house of commons the government watchdog asked directly how much was promised to Nissan and they were refused point blank. Makes you wonder .........

130Kph

Looking at comments on various UK economic sites today, I think it’s looking like the British government will borrow like a gambling addict for the foreseeable future to soften or disguise the consequences of Brexit.

Thus the know-nothing-buccaneering brexiteeers will continue crowing for another while– as they obviously live in a parallel reality to the rest of the world.

I think this is so financially serious that in the medium term - the Trident upgrade may have to be abandoned. They may just have to let the US DOD provide their entire nuclear deterrent or do without a deterrent!!

If they keep borrowing (and I think the £100billion mentioned today will look like a ridiculous under-estimate when this is all over) they face a very real possibility of default in the next 20 years or sooner.

They may have to come cap-in-hand to the EU and/or the IMF for a 90’s style structural adjustment program. There is simply no growth path out of this Brexit economic folly for them!

solodeogloria

130Kph wrote: »

Looking at comments on various UK economic sites today, I think it’s looking like the British government will borrow like a gambling addict for the foreseeable future to soften or disguise the consequences of Brexit.

Thus the know-nothing-buccaneering brexiteeers will continue crowing for another while– as they obviously live in a parallel reality to the rest of the world.

I think this is so financially serious that in the medium term - the Trident upgrade may have to be abandoned. They may just have to let the US DOD provide their entire nuclear deterrent or do without a deterrent!!

If they keep borrowing (and I think the £100billion mentioned today will look like a ridiculous under-estimate when this is all over) they face a very real possibility of default in the next 20 years or sooner.

They may have to come cap-in-hand to the EU and/or the IMF for a 90’s style structural adjustment program. There is simply no growth path out of this Brexit economic folly for them!

Good morning!

Don't you think that analysis is a bit extreme?

Britain's debt to GDP ratio is 87% as of this year and it will be 90% next year. That's still a lot lower than many countries that required IMF intervention. Ireland's 2015 post-bailout debt to GDP ratio was 93%. Of course this ratio is relative to the growth in the economy which I'm sure that Hammond will be doing his utmost to do. The announcement of 17% corporation tax sends a clear signal that Britain is open for business.

Everyone is agreed that Britain will have to pay a price for Brexit but to claim this means the type of financial armageddon that you're prophesying is not founded on evidence.

Much thanks,
solodeogloria

Calina

solodeogloria wrote: »

Good morning!

Don't you think that analysis is a bit extreme?

Britain's debt to GDP ratio is 87% as of this year and it will be 90% next year. That's still a lot lower than many countries that required IMF intervention. Ireland's 2015 post-bailout debt to GDP ratio was 93%. Of course this ratio is relative to the growth in the economy which I'm sure that Hammond will be doing his utmost to do. The announcement of 17% corporation tax sends a clear signal that Britain is open for business.

Everyone is agreed that Britain will have to pay a price for Brexit but to claim this means the type of financial armageddon that you're prophesying is not founded on evidence.

Much thanks,
solodeogloria

The question is whether the price they pay for leaving exceeds the benefit they got on being a member. From the figures being bandied about, from an economic point of view, there is some scope to suggest that the price they pay will exceed the benefits they would have gotten by staying.

However, the counter argument to that is "it's not all about economics, it's about control, or sovereigny" or whichever opium of the masses you're having yourself.

What I find fascinating in a lot of online debates is that many Brexit supporting people - and to be frank, whether you voted in or out, you're arguing the Brexit POV at the moment - expect the EU to make its decisions on cold economic grounds rather than considering the underlying principles of the organisation as a whole - but claim that their decision wasn't all about economics.

This has been thrust upon the EU by the British people and the EU, by definition, will negotiate to protect its own interests. The error many people appear to be making is that these interests are purely economic.

In the meantime, many sections of the UK are suffering massively under austerity. Nothing about that is going to change, and people who have little will find out just how much more they can lose. The economy is forecast to grow less than it would have otherwise. Austerity was imposed to reduce the deficit. It is clear now that the UK is broadly going to get austerity, but this time, they aren't going to be getting deficit reduction as a target.

There are additional problems in the UK economy which don't get discussed very often such as the fact that a significant number of their working population is still dependent on social support in the way of working credits and income support. A lot of their unemployment has switched to self employment but are not generally declaring profits so there is limited to no tax coming from that sector either, but there is income support going the other way. Their jobs recovery, or at least their reduction in unemployment was not matched by a corresponding increase in taxes. And that's fine as long as you have some sort of powerhouse powering the economy.

The UK's primary selling points at the moment are the financial industry, and technology supported by a few of the universities. But if you look at what's been happening in research funding in the university sector for years, the UK has been cutting its direct funding, and UK academic has been making up the difference by doing disproportionately well out of EU research funding. This is one of the key reasons that the research wing in UK academia has been screaming since June. They see a lot of funding not coming their way any more and their experience with UK local funding has been increasingly less positive. But things like Google et al setting up more jobs in London depend on ongoing pipelines of people out of research at the universities. They don't just need people who are coming out of basic BSc courses with a java programming background - all due respect they can get that in Ireland and probably for a lot less expense even allowing for Dublin's frankly insane cost of living atm.

The key point which I think you also need to bear in mind is that when a big red bus goes around saying the country will be 350 million pounds a week better off why don't we give that to the NHS, the expectation is that the country will be better off, and will not be borrowing significantly more money. No one was agreeing up front that there was going to be a significant price to be paid and any contention from the Remain side that there would be a significant price to be paid was met with derision about Project Fear. So I actually don't be the whole idea that "Of course no one was saying there wouldn't be a price to pay". The primary Brexit campaign was saying exactly that; that the country would be 350M pounds better off immediately. Whatever your view on whether that was promised to the NHS or not (in a Tory government that was going to be delusional but anyway), the fact is, they promised, and they shot down comments by their own statistics agencies about the veracity of the figure. You might even consider that something which could almost be ignored if the change was cost neutral to the UK economy. But it is not, and it is already gearing up to be massively expensive.

So, your comments above need to be put in the context that this is causing a budget issue for central government, at a time when the future of its biggest industry has some doubts hanging over it, with knock on effects on tax raising and even at this stage, they are looking at increasing borrowings significantly. It is entirely possible that their way out will be to cause serious inflation. I leave it to you to work out how that's going to go if the UK continues to have poor wage and productivity growth.

I'm aware that you've claimed in this thread to have voted remain. From an economic point of view, the UK's best move would be to find a way of not exiting the EU at all - it is the prudent and long term sensible option. A little more acknowledgement on the parts of the powers that be that this was a very poor strategic decision on the part of the electorate which is causing a lot of practical headaches.

In other words: "we recognise you have voted to exit the EU and are implementing this decision. The net up front costs of this will be, regardless of what was on that bus, borrowings increasing by 122 billion, cuts in funding for the NHS, more limits to social welfare support, more things like the bedroom tax", increased university fees, reduced funding for state education.

They won't do this because it's political suicide for them. The alternative is a period of decline for the UK, quite a bit of inflation which tends to hit low income earners more, and the reduction in strength of key industries which feed into the tax base.

Against this you're saying "it won't be all that bad". I've done research into the social condition of Ireland in the 1880s and 1890s so that's my benchmark for how bad things. I'm reasonably certain it won't get close to being that bad. However, I think it is fair to say that there will be a net material drop in living standards on average in the UK.

This cost to Britain that you say no one is denying. It was heavily denied in the run up to the referendum.

Peregrinus

We don't really know, is the short answer. This is a fairly complex matter. Reducing the corporation tax rate to 17% may well "send a clear signal that Britain is open for business", but it will also reduce tax revenue, which will increase the government's borrowing requirement, and so make the debt-to-GDP ratio worse, not better. Unless, of course, the markets respond to the "clear signal" by increasing business activity so much that the reduction in corporation tax revenue due to the lower rate is more than offset by increased revenue attributable to a greater level of business activity. And while you might hope that that might be the case, it would be a foolish (and I think ideologically blinkered) person who would flatly assert that it will be the case.

Similarly the announced investments by IBM, etc, while undoubtedly welcome, aren't necessarily a vote of confidence in the merits at large of Brexit. One of the consequences of Brexit will be that the UK will no longer have to comply - unless it chooses to - with EU data protection and privacy standards, which are pretty tough. Because they're pretty tough, they're a significant cost and risk burden to data controllers. If the UK is anxious to stimulate investment, business activity, etc to alleviate the costs of Brexit, one way to do this - and the UK will come under pressure to do this- is to lower standards. If the UK adopts less onerous data protection/privacy standards in order to attract/retain data management business, that's great for the companies running those businesses, but maybe not so hot for the people whose data is controlled by, and whose privacy is in the hands of, those businesses. IBM, etc, may see Brexit as an opportunity for this reason.

If things do pan out this way, it would be an example of the British people paying for Brexit, not financially, but in other, still real, ways, like getting poorer quality goods and services.

Similar issues arise in relation to, e.g., environmental issues. The UK Secretary of State for the Environment has indicated to Parliament that, post-Brexit, she envisages about two-thirds of EU environmental legislation will be retained in UK law after Brexit, meaning that perhaps one-third will not be. There'll be an obvious temptation to, uh, adapt environmental law so as to reduce costs on businesses and, while this may benefit the UK financially, it could obviously cost it in other ways. UKIP has long been critical of the Water Quality Directive because, um, they value the Ordinary British Man or Woman's freedom to experience dysentery, or something like that.

Zubeneschamali

Peregrinus wrote: »

If the UK is anxious to stimulate investment, business activity, etc to alleviate the costs of Brexit, one way to do this - and the UK will come under pressure to do this- is to lower standards.

With the drop in Sterling, (which looks permanent, and actual brexit may make it drop further), the UK looks a lot cheaper. There could be an uptick in jobs employing locals in roles like phone banking vs. people off-shoring those roles.

But for a proper EMEA call center, you need people fluent in "foreign" languages - who will be less willing to relocate to a low wage anti-immigrant UK.

And inflation will in time put upward pressure on UK wages - inflation which which is low througout the Eurozone.

K-9

solodeogloria wrote: »

Good morning!

Don't you think that analysis is a bit extreme?

Britain's debt to GDP ratio is 87% as of this year and it will be 90% next year. That's still a lot lower than many countries that required IMF intervention. Ireland's 2015 post-bailout debt to GDP ratio was 93%. Of course this ratio is relative to the growth in the economy which I'm sure that Hammond will be doing his utmost to do. The announcement of 17% corporation tax sends a clear signal that Britain is open for business.

Everyone is agreed that Britain will have to pay a price for Brexit but to claim this means the type of financial armageddon that you're prophesying is not founded on evidence.

Much thanks,
solodeogloria

Well it looks like 4 or 5 years more austerity anyway unlike here.

KingBrian2

K-9 wrote: »

Well it looks like 4 or 5 years more austerity anyway unlike here.

Britain was always going to have to make changes to their economy. The Austerity debate over there was way to political. Labour adamant against it and the Conservatives win a massive majority in parliament is the consequence. All healthy economies need to spend what they have, make use of the resources and talent at their disposal. Borrowing is important but flooding the market with cheap money only results in bubbles. Britain does have a large labour force so that will do it some good going forward.

solodeogloria

Good evening!

The thing that we're all agreed on is that there will be a cost to Brexit.

As for whether or not it's worth it that ultimately what the people conclude and that will depend on the circumstances of Brexit.

The people concluded on June 23rd that they thought the price was worth it. There was a litany of prophecies concerning what might happen. Mostly negative and mostly extreme. In turn the people will see the fruit of that decision. I agree it probably means 5 years of austerity and it means that the UK will take longer to see a budget surplus. That's the cost in the short term.

As for concluding if it was worth it in the long term that depends on a number of factors. Including can the UK control it's borders in a progressive way - welcoming skilled migration and controlling unskilled migration, creating a regulatory environment outside of the European Union that encourages the belief that the UK is a safe haven for funds and investment, creating a flexible business environment that gives the UK an edge over others, and rejecting protectionism in the hope of establishing forward thinking business relationships with the whole world through free trade deals. If the UK can do these things then I have every belief that it will be better off outside of the European Union but it does depend on how people steer the ship from here on in.

It's also worth pointing out that I never said the IBM were extolling Brexit. What I did say is that they believe that the UK will remain a strong economy irrespective and that most people see it that way.

Much thanks,
solodeogloria

Fratton Fred

Peregrinus wrote: »

Similarly the announced investments by IBM, etc, while undoubtedly welcome, aren't necessarily a vote of confidence in the merits at large of Brexit. One of the consequences of Brexit will be that the UK will no longer have to comply - unless it chooses to - with EU data protection and privacy standards, which are pretty tough. Because they're pretty tough, they're a significant cost and risk burden to data controllers. If the UK is anxious to stimulate investment, business activity, etc to alleviate the costs of Brexit, one way to do this - and the UK will come under pressure to do this- is to lower standards. If the UK adopts less onerous data protection/privacy standards in order to attract/retain data management business, that's great for the companies running those businesses, but maybe not so hot for the people whose data is controlled by, and whose privacy is in the hands of, those businesses. IBM, etc, may see Brexit as an opportunity for this reason.

that's a bit of a red herring to be honest. Yes, the UK could drop the eu's data protection standard, but then it would also be pretty much non compliant with the US standard as well and would prevent the easy transfer of data between regions, essential for a company such as IBM.

K-9

KingBrian2 wrote: »

Britain was always going to have to make changes to their economy. The Austerity debate over there was way to political. Labour adamant against it and the Conservatives win a massive majority in parliament is the consequence. All healthy economies need to spend what they have, make use of the resources and talent at their disposal. Borrowing is important but flooding the market with cheap money only results in bubbles. Britain does have a large labour force so that will do it some good going forward.

It looks like 12 years of austerity. I suppose you could argue this would have happened anyway.

Nody

Fratton Fred wrote: »

that's a bit of a red herring to be honest. Yes, the UK could drop the eu's data protection standard, but then it would also be pretty much non compliant with the US standard as well and would prevent the easy transfer of data between regions, essential for a company such as IBM.

The problem is not going to be the EU data protection standards (that's already covered as third party transfer) but the legal rights of police etc. to get access to said data once UK is out. There are multiple countries which require the police, tax authorities etc. to have the right to get access to said data (talking invoice images and the like) which in EU is a non issue, once UK leaves however if said deals are not set up multiple countries would have UK as an illegal storage location for such information. Now it may seem minor but once again keep in mind this would possibly fall foul under the "UK courts rule everything in UK" as it would been ruled in a different country that they would need to give access.

130Kph

solodeogloria wrote: »

Don't you think that analysis is a bit extreme?
..................
Everyone is agreed that Britain will have to pay a price for Brexit but to claim this means the type of financial armageddon that you're prophesying is not founded on evidence.

Btw first, I do think there will be a transitional deal to aid the British exit because article 50 is an ill thought out mess & in no way realistic for any country enter-twined for 40 years to just exit (if there’s no agreement after 15 months) overnight.

This transitional deal is only common sense for both sides to protect many critical businesses (it may be the 2 years of A50 + a tapered 5 years = 7 years from now).

So once that deal expires- then the UK meets cold harsh reality with empty cupboards or blissful freedom, pure intoxicating sovereignty and boundless buccaneering zeal (as brexiteers would style it). Any trade deal would still lie many years beyond the end of that possible transitional deal.

Britain went cap in hand to the IMF in 1976 so it’s hardly heralding the end of days were it to happen again.

5 months after the vote and without triggering art 50 they have to borrow an extra €59bn over 5 years purely due to Brexit. Do you think this is the end of the financial costs of this reckless gamble? Do you think in 2019/2020 or even 2023 that the UK will be back trading as healthily as if Brexit never happened, because that’s what this Autumn statement is forecasting (open to correction).

If I was an international mnc director deciding from now on where to put a major investment, I would only put into the UK an investment to cater for that 65 million market alone. Anything to do with EMEA would go to the EU. It’s kind of obvious.

All that lost opportunity cost year after year, after year after year will add up. The Nissan sweetner is finger in the dyke stuff.

K-9

I'd say some type of transitional deal could be arrived at, well hopefully for Ireland's sake!

First Up

That's not how it works. They leave the EU no later than 24 months after they invoke A50. On that day, their membership of all EU institutions and conventions ends. If they have concluded a trade agreement, that will come into force on that date. If they have not concluded a trade agreement, they default to WTO MFN terms until they do.
There will be no gradual departure. Article 50 was designed and intended to encourage anyone planning to leave to have thought it through. It isn't the EU's fault - or problem - if the UK makes a balls of it.

solodeogloria

Good evening,

130Kph wrote: »

Britain went cap in hand to the IMF in 1976 so it’s hardly heralding the end of days were it to happen again.

The circumstances differ. My point is simple. Britain's debt to GDP ratio is better than Ireland's at the moment. It is also better than a lot of EU member states. There's no point prophesying that Britain will go to the IMF before other more indebted EU member states. My point is simply, at the present time, the claim that the UK will have to go to the IMF isn't founded on decent evidence.

130Kph wrote: »

5 months after the vote and without triggering art 50 they have to borrow an extra €59bn over 5 years purely due to Brexit. Do you think this is the end of the financial costs of this reckless gamble? Do you think in 2019/2020 or even 2023 that the UK will be back trading as healthily as if Brexit never happened, because that’s what this Autumn statement is forecasting (open to correction).

Again, the projection includes the period after the invocation of Article 50. It isn't a projection of 5 years without the UK invoking Article 50. I think there's every possibility that the UK will succeed after Brexit depending on what arrangement is made.

130Kph wrote: »

If I was an international mnc director deciding from now on where to put a major investment, I would only put into the UK an investment to cater for that 65 million market alone. Anything to do with EMEA would go to the EU. It’s kind of obvious.

Other firms obviously don't agree. There are clear advantages to the UK being outside of the Eurozone (UBS mentioned that the UK is a safe haven for investment outside of the Eurozone), and there could be clear advantages to being outside of the European Union if the British government capitalise on them.

130Kph wrote: »

All that lost opportunity cost year after year, after year after year will add up. The Nissan sweetner is finger in the dyke stuff.

Again, prophesying armageddon without evidence.

Much thanks,
solodeogloria