The economic consequences of Brexit

[ATG]

SunsetZed said:

For example if we leave the SM and there are no tariffs on cars can you explain to me why would Nissan care if we were in or out of the SM?

I find the naivety of questions like this a bit unnerving. The Single Market is a hell of a lot more than just a free trade area. Tariffs are important but they're only one of the components of the Single Market. It's also a customs union. That means anything imported into the UK can be freely sold on into the EU; you don't get that in a free trade area. The Single Market also has a common system for dealing with VAT, plus a heap of common standards for electrical safety, the shape of bananas, etc that mean that if a product is good enough for sale in the UK it is good enough for sale anywhere in the EU. From Nissan's point of view the difference is huge in terms of complexity, bureaucracy and cost.

[alfie2244]

jjlynn27 said:

alfie2244 said:

ATG said:

Give a single example of the EU moving business away from the UK.

Ford Transit - Turkey - any EU connection?

EU didn't move Ford Transit production to Turkey. The EIB gave Ford loan (E180m IIRC) to upgrade already existing factory in Turkey that was already producing same vans considerably cheaper. The same EIB that provided loans of E450m to Southampton factory in 2010. It would happen with or without loan. Even before the loan Turkish factory was producing 180,000 pa vans compared to 27000 in Southampton.

EIB lending to a Turkish manufacturer (with cheaper production costs) had no impact on UK production and the decision to close Southampton then? As Turkey was / is outside the EU I would say the money would have been better spent subsiding (protecting) UK / EU jobs myself even if that makes products a bit dearer.

At least when we are out we will be able to subsidise our industries if we so wish..Think Tata etc) all just my opinion of course.

[SilverSixer]

Jockman said:

SilverSixer said:

M&S Bacon Frazzles (50g) up 9p a pack this morning. They've been 86p for years, now 95p. And those are made in the UK.

Burp.

You should have applied for an M&S credit card and secured the £25 voucher with your first purchase of frazzles. You would have also received an extra 500 points = £5.

That would have facilitated 31 days of FREE frazzles.

You cannot blame brexit for your ignorance.

Well. There was me thinking any self respecting PHer has the mortgage on his Belgravia townhouse and Cotswolds country estate paid off by the time he's 40, and wouldn't need to know anything about grubby 'credit' cards and free frazzles, let alone be concerned about the economic impacts of brexit or any other unpredictable black swan event outside of their control.

[jjlynn27]

SunsetZed said:

jjlynn27 said:

SunsetZed said:

Rubbish, that would depend on the tariffs and the impact that they had on their business amongst many other things.

For example if we leave the SM and there are no tariffs on cars can you explain to me why would Nissan care if we were in or out of the SM?

The same applies to many industries hence the interest in the Canada deal right now.

Cars industry is exceptionally poor example if you think that 'Canada deal' is the right one. In short, you'll need to prove that most components of the cars are actually made in Canada to benefit to the access to SM sans tariffs.

Another tiny issue is, while Canada deal doesn't include dreaded free movement of johny the foreigner, it also exclude services. You know, the part where the UK actually have trade surplus with EU, and something that UK is very very good at.

In other news; this week we are starting move of another two hi-tech companies from London to Berlin.

Apologies, as always the devil is in the detail and I can't claim to have followed either issue in detail. What I was trying to do was to highlight the fact that the single market itself is rarely, if ever, the issue for business, associated costs are.

I was not suggesting Canada has the perfect deal for us or that there won't be tariffs on cars!

No apologies needed at all. Cars are sideshow. The main issue is, imo, services. IIRC Hollande actually offered the same deal already to UK, forget FMOL, have non-restricted access to goods trade, but non on services. After all why wouldn't he?

(This is all paraphrasing from memory, so happily corrected on any of the above).

[ATG]

SunsetZed said:

What I was trying to do was to highlight the fact that the single market itself is rarely, if ever, the issue for business, associated costs are.

I hope you now realise that the Single Market reduces the cost of trade between members to a much greater extent than a Free Trade area would.

If this were not the case, why do you think industry is clamoring for us to stay in the Single Market? If a Free Trade arrangement was just as good, they'd be saying so.

[jjlynn27]

alfie2244 said:

jjlynn27 said:

alfie2244 said:

ATG said:

Give a single example of the EU moving business away from the UK.

Ford Transit - Turkey - any EU connection?

EU didn't move Ford Transit production to Turkey. The EIB gave Ford loan (E180m IIRC) to upgrade already existing factory in Turkey that was already producing same vans considerably cheaper. The same EIB that provided loans of E450m to Southampton factory in 2010. It would happen with or without loan. Even before the loan Turkish factory was producing 180,000 pa vans compared to 27000 in Southampton.

EIB lending to a Turkish manufacturer (with cheaper production costs) had no impact on UK production and the decision to close Southampton then? As Turkey was / is outside the EU I would say the money would have been better spent subsiding (protecting) UK / EU jobs myself even if that makes products a bit dearer.

At least when we are out we will be able to subsidise our industries if we so wish..Think Tata etc) all just my opinion of course.

I didn't say that it didn't have impact. I don't know the extent of the impact. The question posed was what business EU moved away from UK. The total investment in factory in Kuiceli at the time of EIB loan (again this is from memory as we did some work there), in order to update and ramp up production was in the region of E490m. The simple fact, and this is from someone with industry knowledge is that the difference in cost of production between UK and Turkey was simply too great to be ignored.

ETA; It was one of the Farage's favourite examples of big bad EU hating UK. The fact that few years earlier they provided loan almost 3 times the size, to the UK factory, was not as important.

Edited by jjlynn27 on Friday 21st October 13:22

[SilverSixer]

Brilliant tweet yesterday from a lawyer who writes for the FT:

UK: We want a single market.
> Single market

UK: We want expansion to the East.
> EU expansion to the East.

UK: Opt outs!
> Opt outs.

UK: Bye!

(from @Law_and_policy)

[BMRuss]

ATG said:

Give a single example of the EU moving business away from the UK.

Peugeot closed down a plant in Coventry resulting in the loss of 2300 jobs, moved to Trnava, Slovakia, that one ok for you?

[ATG]

alfie2244 said:

Countdown said:

Is Turkey in the EU?

Not yet...but I was responding to the question asked.

With a terrible example, which just helps prove the point.

The economic case for staying in the EU and/or the Single Market is pretty bloody obvious over the short to medium term. Predicting anything over the long term is all but impossible, so who knows? So if someone wants to put forward a reason for leaving the EU, you'd better couch it in terms of long term political destiny of the UK or some such. Because trying to argue it on economic terms isn't going to work. The "sensible" Brexiteers accept the economic cost and argue that it is a price worth paying for greater political independence. I think they're mad, but at least they're not trying to delude themselves about the economics.

[jjlynn27]

BMRuss said:

ATG said:

Give a single example of the EU moving business away from the UK.

Peugeot closed down a plant in Coventry resulting in the loss of 2300 jobs, moved to Trnava, Slovakia, that one ok for you?

How's that 'EU moving business'? The Coventry factory needed E250m investment just to be able to build new model, and according to Folz, even after that investment, would still be the most expensive plant in PSA group.

Anything else?

[alfie2244]

jjlynn27 said:

I didn't say that it didn't have impact. I don't know the extent of the impact. The question posed was what business EU moved away from UK. The total investment in factory in Kuiceli at the time of EIB loan (again this is from memory as we did some work there), in order to update and ramp up production was in the region of E490m. The simple fact, and this is from someone with industry knowledge is that the difference in cost of production between UK and Turkey was simply too great to be ignored.

ETA; It was one of the Farage's favourite examples of big bad EU hating UK. The fact that few years earlier they provided loan almost 3 times the size, to the UK factory, was not as important.

Edited by jjlynn27 on Friday 21st October 13:22

Points take but in my mind it hardly fits with EIB's declared priorities:

"Our priorities - We support projects that make a significant contribution to growth and employment in Europe.".......95% of Turkey is not in Europe AFAIK.

[BMRuss]

jjlynn27 said:

How's that 'EU moving business'? The Coventry factory needed E250m investment just to be able to build new model, and according to Folz, even after that investment, would still be the most expensive plant in PSA group.

Anything else?

I got asked for an example, I gave one.

I'm so glad we voted to leave, it really makes me happy that it upsets irritants like you

[///ajd]

BMRuss said:

///ajd said:

No comment on business moving to the EU? Thought not, if we just ignore it, we can convince ourselves its not happening.

The EU have been moving business away from the UK way before Brexit...next........

But now it will be hugely accelerated and perhaps cause irreversible damage to our GDP. We were doing well before.......

[jjlynn27]

BMRuss said:

jjlynn27 said:

How's that 'EU moving business'? The Coventry factory needed E250m investment just to be able to build new model, and according to Folz, even after that investment, would still be the most expensive plant in PSA group.

Anything else?

I got asked for an example, I gave one.

I'm so glad we voted to leave, it really makes me happy that it upsets irritants like you

That is all good, I don't know who you are, and if it makes you happy to think that someone who you don't know is upset, then good for you. Your example is, still, totally irrelevant.

[BMRuss]

///ajd said:

But now it will be hugely accelerated and perhaps cause irreversible damage to our GDP. We were doing well before.......

And we will do well after, you need to be more optimistic, and I say this as someone who does a LOT of business to Europe.

[alfie2244]

ATG said:

With a terrible example, which just helps prove the point.

The economic case for staying in the EU and/or the Single Market is pretty bloody obvious over the short to medium term. Predicting anything over the long term is all but impossible, so who knows? So if someone wants to put forward a reason for leaving the EU, you'd better couch it in terms of long term political destiny of the UK or some such. Because trying to argue it on economic terms isn't going to work. The "sensible" Brexiteers accept the economic cost and argue that it is a price worth paying for greater political independence. I think they're mad, but at least they're not trying to delude themselves about the economics.

alfie2244 said:

As Turkey was / is outside the EU I would say the money would have been better spent subsiding (protecting) UK / EU jobs myself even if that makes products a bit dearer.

Wonder how much taxpayers money was spent in relation to the lost UK jobs?

[BMRuss]

jjlynn27 said:

That is all good, I don't know who you are, and if it makes you happy to think that someone who you don't know is upset, then good for you. Your example is, still, totally irrelevant.

I gave you an example of business moving out of the UK to Slovakia, you know, the place where they won't take a single immigrant....

[anonymous-user]

BMRuss said:

///ajd said:

But now it will be hugely accelerated and perhaps cause irreversible damage to our GDP. We were doing well before.......

And we will do well after, you need to be more optimistic, and I say this as someone who does a LOT of business to Europe.

I reckon 48% of the population cannot see much to be optimistic about. + a substantial number of the 52% who now realise they were lied to & misled.
Will be a tough task for the new PM to convince us otherwise . Half the population are now will now have little interest in U.K. plc (or England plc in a few years)
Here's hoping that EU offer us an improved deal before we continue this path to self destruction .

[ATG]

BMRuss said:

I got asked for an example, I gave one.

I'm so glad we voted to leave, it really makes me happy that it upsets irritants like you

You gave an example that was obviously wrong. And then you make a feeble attempt at a joke. Maybe you can see why some people have suspicions that some Brexiteers didn't understand the issues?

[ATG]

BMRuss said:

jjlynn27 said:

That is all good, I don't know who you are, and if it makes you happy to think that someone who you don't know is upset, then good for you. Your example is, still, totally irrelevant.

I gave you an example of business moving out of the UK to Slovakia, you know, the place where they won't take a single immigrant....

That's not the EU moving UK jobs abroad, you plank. It's just normal market forces. You might as well have given an example of someone moving jobs to China.