Page 1 of 56 1231151 ... LastLast
Results 1 to 10 of 560

Thread: Brexit

  1. #1
    Master Witton Park's Avatar
    Join Date
    Aug 2007
    Location
    Blackburn
    Posts
    8,084

    Brexit

    In the next few days Cameron will come back claiming a great deal and urging us to vote to stay in the EU in the referendum due in June.
    If he doesn't, I'll be amazed.

    No one is actually setting out what will happen in the event of a vote to leave. Will it kill trade and costs jobs?

    I personally don't think so and here's why.

    In 1999 the UK had a trade deficit of 11.2 Billion with the EU. By the end of 2014 it was 61.6 Billion.
    Exports to the EU have averaged growth of 3.4% over the same period and imports by 4.7%.
    Exports to non-EU have grown by 6.5% over the same period and imports 5.5%.

    So we have a trade surplus with the Non-EU.

    If the UK leaves the EU there is a 2 year negotiation period in which we can agree trading terms between the EU and UK.

    What happens in those 2 years is anyone's guess and much of it will depend on who is handling the UK side of the negotiation.
    Hopefully not Cameron as he's already shown he's not that capable in my opinion.

    But let's assume we cannot agree and so the default position of WTO terms and tariffs is in place.

    That means then that what we sell in to the EU will be subject to import duty as it arrives there as will what they sell in to the UK.

    The "UK Losers" (and of course there would be some) in terms of trade would be companies that sell to the EU as there delivered price for their goods would be 10% (for example) higher than they are now.

    The "UK winners" would be two types.
    The companies who sell domestically and compete with EU companies for business in the UK.
    The companies who sell international to non-EU as the UK would then be in a position to negotiate trade deals independently.

    There would be a benefit for our Corporate Tax as well. Companies such as Google would not be able to offshore their business in the same way they do now. They would most likely need real UK presence and therefore be subject to the taxes as any other UK company.

    There would also be an additional duty benefit. So long as we have a trade deficit with the EU, we would also receive more in import duty than the EU would gain in export duty.

    Of course it is a very complex picture as if duty was in place, the amount and nature of our trade to the EU would change, but based on where we are now the financial benefits in the short term would be huge (and I haven't even factored in the EU payments we make).

    Which is why I think the EU would want to continue with a free trade agreement, just as we have now.
    The EU, which is struggling for any growth, cannot afford not to trade with the UK and it cannot afford for it's exports to the UK to be effectively 10% higher than they are now, therefore losing business to UK business and non EU business.

    Without doubt there are wider issues - it isn't just about trade. We have the agriculture and fisheries policies, the environmental policies.
    But the UK for some reason always seemed to end up on the wrong end of all of these so I do struggle to find negative issues arising from a Brexit.
    Richard Taylor
    "William Tell could take an apple off your head. Taylor could take out a processed pea."
    Sid Waddell

  2. #2
    Moderator noel's Avatar
    Join Date
    Jan 2007
    Location
    Mountains of Cheshire
    Posts
    5,437
    I'd be surprised if a lot of companies don't weigh in at this point. The last thing large multinationals want is uncertainty. I think they'll start to lay it on thick about jobs and money.

    Interesting times indeed.
    No longer "resting"

  3. #3
    Master Witton Park's Avatar
    Join Date
    Aug 2007
    Location
    Blackburn
    Posts
    8,084
    It depends on the industry and whether you've had your fingers burnt by the EU.

    If Google comes out to support the "in" campaign that would be a huge boost to the outs

    It's impossible to set out a clear vision after an "out" vote, as there will be a 2 year negotiation to set the terms.
    That's perhaps he biggest problem the out campaign has.
    But if the what ifs were examined properly, I'm pretty sure they would all turn out economically positive for the UK, just to greater or lesser levels.

    By the same token though, we don't have certainty with an "in" vote. Who knows what the next treaty will bring and in what direction the EU will go?
    Will the Euro collapse and what will be the consequences?
    Will some or all of the club med have to leave the EU, or leave the Euro.
    Will Turkey be allowed in?

    You can see that as the EU has enlarged that to get anything passed has involved more horse-trading. I bet the 4 countries that have declared they want to block Cameron's requests, will be given some sweeteners to accept.
    Or maybe even told without the net contribution the UK makes, the subsidies they receive from the EU will be reduced significantly, so they had better support the proposals.
    But it's clear that now the eastern European states are in, they have a different outlook and consensus is more difficult.

    The EU is going the same way as the Eurovision song contest and I fear it's nil points for the UK going forward if we stay in
    Richard Taylor
    "William Tell could take an apple off your head. Taylor could take out a processed pea."
    Sid Waddell

  4. #4
    Grandmaster dominion's Avatar
    Join Date
    Jan 2007
    Location
    Back home for now...
    Posts
    11,680
    Quote Originally Posted by noel View Post
    I'd be surprised if a lot of companies don't weigh in at this point. The last thing large multinationals want is uncertainty. I think they'll start to lay it on thick about jobs and money.

    Interesting times indeed.
    Or if we weren't held back by the EU we could offer them massive amounts of state aid and reduced tax rates to encourage them to stay or relocate here?

  5. #5
    Moderator noel's Avatar
    Join Date
    Jan 2007
    Location
    Mountains of Cheshire
    Posts
    5,437
    Quote Originally Posted by dominion View Post
    Or if we weren't held back by the EU we could offer them massive amounts of state aid and reduced tax rates to encourage them to stay or relocate here?
    Getting involved in that sort of race to the bottom could only end one way. I'd like the UK to compete on skills, not on the promise of companies paying lower taxes.
    No longer "resting"

  6. #6
    Senior Member
    Join Date
    Oct 2013
    Posts
    271
    Quote Originally Posted by Witton Park View Post
    In the next few days Cameron will come back claiming a great deal and urging us to vote to stay in the EU in the referendum due in June.
    If he doesn't, I'll be amazed.

    No one is actually setting out what will happen in the event of a vote to leave. Will it kill trade and costs jobs?

    I personally don't think so and here's why.

    In 1999 the UK had a trade deficit of 11.2 Billion with the EU. By the end of 2014 it was 61.6 Billion.
    Exports to the EU have averaged growth of 3.4% over the same period and imports by 4.7%.
    Exports to non-EU have grown by 6.5% over the same period and imports 5.5%.

    So we have a trade surplus with the Non-EU.

    If the UK leaves the EU there is a 2 year negotiation period in which we can agree trading terms between the EU and UK.

    What happens in those 2 years is anyone's guess and much of it will depend on who is handling the UK side of the negotiation.
    Hopefully not Cameron as he's already shown he's not that capable in my opinion.

    But let's assume we cannot agree and so the default position of WTO terms and tariffs is in place.

    That means then that what we sell in to the EU will be subject to import duty as it arrives there as will what they sell in to the UK.

    The "UK Losers" (and of course there would be some) in terms of trade would be companies that sell to the EU as there delivered price for their goods would be 10% (for example) higher than they are now.

    The "UK winners" would be two types.
    The companies who sell domestically and compete with EU companies for business in the UK.
    The companies who sell international to non-EU as the UK would then be in a position to negotiate trade deals independently.

    There would be a benefit for our Corporate Tax as well. Companies such as Google would not be able to offshore their business in the same way they do now. They would most likely need real UK presence and therefore be subject to the taxes as any other UK company.

    There would also be an additional duty benefit. So long as we have a trade deficit with the EU, we would also receive more in import duty than the EU would gain in export duty.

    Of course it is a very complex picture as if duty was in place, the amount and nature of our trade to the EU would change, but based on where we are now the financial benefits in the short term would be huge (and I haven't even factored in the EU payments we make).

    Which is why I think the EU would want to continue with a free trade agreement, just as we have now.
    The EU, which is struggling for any growth, cannot afford not to trade with the UK and it cannot afford for it's exports to the UK to be effectively 10% higher than they are now, therefore losing business to UK business and non EU business.

    Without doubt there are wider issues - it isn't just about trade. We have the agriculture and fisheries policies, the environmental policies.
    But the UK for some reason always seemed to end up on the wrong end of all of these so I do struggle to find negative issues arising from a Brexit.
    Europe/Brexit blah blah blah - possibly the most tedious subject EVER

  7. #7
    Master Witton Park's Avatar
    Join Date
    Aug 2007
    Location
    Blackburn
    Posts
    8,084
    Quote Originally Posted by luxinterior View Post
    Europe/Brexit blah blah blah - possibly the most tedious subject EVER
    So I take it your intervention will be a one-off?
    It is perhaps one of the most important issues we will have before us, interesting or not.
    Richard Taylor
    "William Tell could take an apple off your head. Taylor could take out a processed pea."
    Sid Waddell

  8. #8
    Master Witton Park's Avatar
    Join Date
    Aug 2007
    Location
    Blackburn
    Posts
    8,084
    Quote Originally Posted by noel View Post
    Getting involved in that sort of race to the bottom could only end one way. I'd like the UK to compete on skills, not on the promise of companies paying lower taxes.
    I agree that we shouldn't race to the bottom, but we could use the money we currently pay in too the EU to improve infrastructure and services which would create jobs and provide a better environment for business.
    eg. approx 5 years of EU payments would cover the HS2 cost (not that I'm a fan of it )
    Richard Taylor
    "William Tell could take an apple off your head. Taylor could take out a processed pea."
    Sid Waddell

  9. #9
    Senior Member
    Join Date
    Oct 2013
    Posts
    271
    Quote Originally Posted by Witton Park View Post
    So I take it your intervention will be a one-off?
    It is perhaps one of the most important issues we will have before us, interesting or not.
    Whatever the outcome I will wake up the next day go to the same job same life etc. Over time things may cost more things may cost less and so on. That's how life is anyway its just different! Council tax is rising, diesel prices are dropping - swings and roundabouts that I have little control over.

  10. #10
    Moderator noel's Avatar
    Join Date
    Jan 2007
    Location
    Mountains of Cheshire
    Posts
    5,437
    Quote Originally Posted by Witton Park View Post
    I agree that we shouldn't race to the bottom, but we could use the money we currently pay in too the EU to improve infrastructure and services which would create jobs and provide a better environment for business.
    eg. approx 5 years of EU payments would cover the HS2 cost (not that I'm a fan of it )
    That's assuming the government can still collect all that money, without all the young foreigners who are currently tipping the scales of our economy into less than 1% growth. But yes, you're right - I was merely playing devil's advocate with my first point.

    One thing the EU does is spend money on infrastructure projects. We're a net contributor of course, because our infrastructure is already better than some of the other countries in Europe. With more infrastructure investment, their economies could take off and allow them to import more UK goods - currently 51% of our exports go to Europe.
    No longer "resting"

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •