Is Boris sh*tting himself?
Discussion
Dr Jekyll said:
Derek Smith said:
that the EU would do anything other than what is best for them. They have the authority.
I think you'll find that the brexiters knew all along that the EU would always do what was best for them irrespective of the consequences, it's the remainers that regarded it as some benign entity with our best interests at heart. 
Ean218 said:
Dr Jekyll said:
But the labour cost is a big component, in the most worthwhile industries very big
No it isn't, if by worthwhile you mean aviation or car making. The toy industry is very labour intensive, that's why it is all in China now.RizzoTheRat said:
don4l said:
But everyone won't lose 10%.
We will still buy the same number of cars.
German cars will go up by 10%.
Jaguars won't. So people will buy more Jags.
Minis that are made in this country won't go up.
Skodas made in Eastern Europe will go up.
For these reasons I don't think that there is any chance that the EU will try to exclude us from a free trade area.
As I pointed out earlier, shares in BMW and Mercedes have fallen much further than anything in London. The Spanish market has fallen even further.
Europe's markets are down by about 10%, while the UK's markets are down about 3%.
How many components or raw materials required to make those Jag's and Minis come from outside the UK? We've got pretty much no mining industry, no aluminium smelting and it looks like the remains of our steel industry is about to fall over, so I'm guessing they import a fair bit. I'm already paying 14% more for stuff in Europe than I was at Christmas, so I find it hard to believe Jaguar and Mini's will still cost the same to produce.We will still buy the same number of cars.
German cars will go up by 10%.
Jaguars won't. So people will buy more Jags.
Minis that are made in this country won't go up.
Skodas made in Eastern Europe will go up.
For these reasons I don't think that there is any chance that the EU will try to exclude us from a free trade area.
As I pointed out earlier, shares in BMW and Mercedes have fallen much further than anything in London. The Spanish market has fallen even further.
Europe's markets are down by about 10%, while the UK's markets are down about 3%.
Edited by SMB on Tuesday 28th June 09:03
http://www.bbc.co.uk/news/business-21554311
Elysium said:
We have had a triple A rating since 1978. This is the first time it has dropped to AA
Sorry should have included link to 2013.Edited by hoagypubdog on Tuesday 28th June 09:38
hoagypubdog said:
http://www.bbc.co.uk/news/business-21554311
We had the S&P rating until yesterday. Pretending its loss doesn't matter is silly. It may turn out not to matter much, but it matters.Elysium said:
We have had a triple A rating since 1978. This is the first time it has dropped to AA
http://www.bbc.co.uk/news/business-21554311SMB said:
Over 57% of UK car production is sold to mainland europe, if we even have a risk of losing access to that market under a free trade agreement manufacturers will make investment decisions to build new cars in other parts of europe, they are doing that now for future models, every moment of uncertainty is hurting us. a belief that JLR, Mini etc will stay in the UK if there is a risk of an extra export tariff is missing the fundamentals of the modern global industry.
Indeed, many international financial institutions and manufacturing companies chose to base their European operations in the UK on the understanding that it gave free access to the much larger EU single market, they didn't come here for the weather or the food. If that access is compromised they'll begin to drift away, not overnight but over time as decisions are taken where to manufacture new models and where to prioritise investment. It would be prudent for them to start doing so now, I'm sure the various financial institutions that rely upon passporting won't be sitting back with their fingers crossed hoping for a positive result from our negotiations, why would they?Edited by SMB on Tuesday 28th June 09:03
SMB said:
Over 57% of UK car production is sold to mainland europe, if we even have a risk of losing access to that market under a free trade agreement manufacturers will make investment decisions to build new cars in other parts of europe, they are doing that now for future models, every moment of uncertainty is hurting us. a belief that JLR, Mini etc will stay in the UK if there is a risk of an extra export tariff is missing the fundamentals of the modern global industry.
The modern global industry already copes with differential currency fluctuations, labour costs, costs of energy, plant and equipment and the land that their factories stand on. They pay different taxation and get varied tax and grant incentives. Investments at this scale are decades long in paying off. For the last couple of years the Eurozone economy has performed worse than the UK. Against that, a 3% trade tariff (which is what the WTO offers) is just a small part of the equation. Any negotiation with the EU is to reduce below that 3%.Contrary to popular opinion, companies can't just up sticks every six months and move where the exchange rate is better. Labour relations, skilled workforces and just financial momentum all play a part.
Dr Jekyll said:
Ean218 said:
Dr Jekyll said:
But the labour cost is a big component, in the most worthwhile industries very big
No it isn't, if by worthwhile you mean aviation or car making. The toy industry is very labour intensive, that's why it is all in China now.Yes, design of ARM processors is very valuable. They employ 4,000 people in 35 offices worldwide. Not sure how many in UK, but if it is half that is 2,000. I know their Bangalore office is big - because often easier to recruit good engineers there and keep them there than bring them to UK
And you need to be PHd capable in an extremely tough subject to even get into an interview. They need the top 0.1% of people working for them. Not exactly going to help my relatives in Wisbech without even A level maths.
Yep, uncertainty is poison. I'm still genuinely surprised that the English were more cavalier with the EU vote than the Scots were with the Indy vote. The independence white paper was large parts fantasy but it did actually exist.
I guess this is the price you pay for pulling a referendum in a country with huge amounts of political disenfranchisement. The Indy and Union Scots both have someone to vote for, but there is no brexit party except UKIP, and the FPTP system is rigged to prevent minorities having any influence.
I guess this is the price you pay for pulling a referendum in a country with huge amounts of political disenfranchisement. The Indy and Union Scots both have someone to vote for, but there is no brexit party except UKIP, and the FPTP system is rigged to prevent minorities having any influence.
Tuna said:
The modern global industry already copes with differential currency fluctuations, labour costs, costs of energy, plant and equipment and the land that their factories stand on. They pay different taxation and get varied tax and grant incentives. Investments at this scale are decades long in paying off. For the last couple of years the Eurozone economy has performed worse than the UK. Against that, a 3% trade tariff (which is what the WTO offers) is just a small part of the equation. Any negotiation with the EU is to reduce below that 3%.
Contrary to popular opinion, companies can't just up sticks every six months and move where the exchange rate is better. Labour relations, skilled workforces and just financial momentum all play a part.
If the EU economy has performed worse, it still drove 57% pf our car exports, that is just a fact. A better economy would have driven even more.Contrary to popular opinion, companies can't just up sticks every six months and move where the exchange rate is better. Labour relations, skilled workforces and just financial momentum all play a part.
WTO taxation on cars is 10% according to all the data released, not 3%, yes global industries cope with currency rates, most manufacturers used EU and UK funding to build here, but it's wrong to say they don't vote with their feet on the basis of costs, look at Ford and the Transit manufacturing moving from the UK.
Few if any large scale employers in the UK are UK companies, most are owned elsewhere, they really have no loyalty to the UK, a 3-10% additional cost that is avoidable vs the competition will lead to change. Yes the full impact may take 10-15 years as you say, so thats why it's critical to the younger population.
Zod said:
hoagypubdog said:
http://www.bbc.co.uk/news/business-21554311
We had the S&P rating until yesterday. Pretending its loss doesn't matter is silly. It may turn out not to matter much, but it matters.Elysium said:
We have had a triple A rating since 1978. This is the first time it has dropped to AA
http://www.bbc.co.uk/news/business-21554311TX.
SMB said:
WTO taxation on cars is 10% according to all the data released..
And the pound has dropped by how much...? All I'm saying here is that whilst there is a lot of uncertainty, moving operations would be madness until we get to a stage where we can actually be more confident about what the future holds. The volitility that's affecting the UK is affecting Europe as well, and the outcome could go either way (or even settle back to 'no change').Tuna said:
And the pound has dropped by how much...? All I'm saying here is that whilst there is a lot of uncertainty, moving operations would be madness until we get to a stage where we can actually be more confident about what the future holds. The volitility that's affecting the UK is affecting Europe as well, and the outcome could go either way (or even settle back to 'no change').
Currency can change in days, its helping today but in a weeks or months time it could change again, treasury departments will be working on forecasts for currency, investment decisions as you have said are long term, if you want to drive a business with reduced volatility, you would still look to mainland europe right now for any new investment, note the word new, not moving what already exists.What we have done is give these companies an excuse to start to invest elsewhere.
Derek Smith said:
Don't know about Johnson s
tting himself but as things are panning out, with lots of unintended consequences raising their heads, I am.
We are living through a period that will be written about extensively in the future. The exit reminds me of the histories of the civil wars, not to mention WWI, when at any time those with authority could have stepped in to stop the steady progress to disaster but they chose not to. The question that always crosses my mind is why they didn't act. Students in the future will ask why the voters decided to give so much power to Sturgeon. They must have known, they will say, that she would use it for her own ends.
And why, they might wonder, did the government think that the EU would do anything other than what is best for them. They have the authority.
In history lessons in this country the students will be bemused. In European universities, they'll have a laugh.
The EU will ensure that our exit costs us. They will punish us because it will want to discourage others from doing the same. The import/export argument is inconsequential. What would really cost the EU is for the UK to get a good deal. So we won't. We will be told what to do.
There is a suggestion that there will be no talks before we invoke Article 50. That is wrong. The heads of the European states are talking now, and they are deciding what scraps to let us have.
+1. tting himself but as things are panning out, with lots of unintended consequences raising their heads, I am.We are living through a period that will be written about extensively in the future. The exit reminds me of the histories of the civil wars, not to mention WWI, when at any time those with authority could have stepped in to stop the steady progress to disaster but they chose not to. The question that always crosses my mind is why they didn't act. Students in the future will ask why the voters decided to give so much power to Sturgeon. They must have known, they will say, that she would use it for her own ends.
And why, they might wonder, did the government think that the EU would do anything other than what is best for them. They have the authority.
In history lessons in this country the students will be bemused. In European universities, they'll have a laugh.
The EU will ensure that our exit costs us. They will punish us because it will want to discourage others from doing the same. The import/export argument is inconsequential. What would really cost the EU is for the UK to get a good deal. So we won't. We will be told what to do.
There is a suggestion that there will be no talks before we invoke Article 50. That is wrong. The heads of the European states are talking now, and they are deciding what scraps to let us have.
I do think the EU will be looking more to towards their "self interest" rather than specifically seeking to punish us. 'Punishment' will be the consequence, but I don't buy EU revenge narrative as the primary motive. This decision has f
ked them over just as much as shooting ourselves in the foot, so even if our percentage of EU trade held up, it is a smaller pie now and not just in Europe the World Economy has taken a hit as well.I do find it slightly ironic some leavers are pushing the punishment narrative when they themselves like the push the libertarian theme of 'enlightened self interest'.
With regard to the car industry we have some precedent for what could happen and that is what happened in the 70s and 80s to the hone grown industry and the trade with Japan.
They put import tariffs on uk and European cars we didn't put import tariffs on theirs.
The result was inevitable.
They put import tariffs on uk and European cars we didn't put import tariffs on theirs.
The result was inevitable.
grumbledoak said:
Kermit power said:
"Yes, Mr President, of course China could sign that nice trade deal with the UK on those terms, but wouldn't you prefer it if we got rid of those last few objections and signed a deal with you as the whole of the rest of the EU instead"?
As if. The Eurozone's future isn't looking all that rosy, and China's rulers are not stupid.The EU needs to get a lot more f
ked than it is now before it becomes a less attractive market than the UK.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff