Among those shouting loudest about EU bullying and punishment are people who also claim to be advocates of the free market. This strikes me as slightly odd because Brexit is, effectively, the UK market-testing its power and prestige in the world. Those who took us down this road assured us that the UK was such a powerful player that leaving the world’s largest trade bloc would actually make us better off. We would get the exact same benefits, other countries would be desperate for trade deals with us and the EU, terrified by the loss of one of its biggest members, would fall over itself to conclude the easiest trade deal in history.
Two years later, things are looking a little different. As a series of reports out this week show, all the Brexit options are likely to leave the UK worse off than if it had stayed in the EU. The most revealing part of the Treasury’s Brexit analysis is how little difference new trade agreements are likely to make to the UK’s GDP after Brexit. Even with generous assumptions about who we will do trade deals with (see footnotes on Page 22.) the impact is a tiny 0.2 precent of GDP, nowhere near enough to offset the losses from increase trade friction with the EU.
All Brexit scenarios are bad and the further away we move from the single market and customs union the worse they get. It looks like the world out there is tougher than the Brexiters led us to believe.
All this talk of it not being fair or the EU acting like the Nazis and punishing us for leaving reminds me is the kind of petulance you hear from the bloke who walks out of his job and then fails to get the better one to which he had assumed he was entitled.
I have known a few such people over the years. Very occasionally they are right but most of the time they get a huge shock. What they fail to realise is that a proportion of their salary is a function of their place in the corporate system. If they have worked in the same company for a while, their progression is based, in part, on their knowledge of that company and their ability to work within it. Likewise, the way they are treated by others is based on their employment status. The fact that they get appointments, sit in the fist class lounge and everybody wants to talk to them at conferences isn’t because they are ‘just bloody good’ it’s because of who they work for. This often comes as a shock to those who go freelance. As a senior executive in PoshBigCo plc, everyone wants to know you. As MD of MeAndAFewMates Ltd, it’s a lot more difficult.
So, more often than not, our overconfident executive finds it more difficult to get higher-paying work in the outside world than he imagined. Not that he is discouraged. You’ll hear him sounding off in the pub about all the ‘idiots’ who are making ‘silly offers’. “I’m worth much more than that,” he rants. “I know what I’m worth and I’m holding out for it.”
The UK’s exercise in testing the market has revealed that our worth, too, is a lot more tied up with the organisation we were part of than we cared to admit. Other trading partners prioritise deals with the EU. Even the commonwealth countries are more interested in building trade relationships with the EU than with the UK. They would, of course. It’s much bigger. To be fair, they did warn us that we would lose influence if we left the EU but we chose to ignore them. It is true that the UK is still one of the major economies in the world but much of its prestige and influence now rests on the fact that it sits at the intersection between the western military alliance, the anglophone world and the EU. Jettisoning one of those key components makes us less interesting to people.
To stretch the jobseeker analogy, all the offers so far have turned out to be worse than his old job. All pay less and have less security and benefits than the one he has just walked out of. The best offer so far is to go back to his old employer as a contractor, only on slightly less money than he was on before and without a seat on the executive team. Worse still, there’s a serious risk he might end up having to take orders from people he once considered to be junior.
It’s been some time now since he handed in his notice and he really needs to get something sorted out soon. Curiously enough, his old company have kept his job open. He can go back any time, with all his pay and benefits and his seat at the top table. But he won’t because that would make him look a bit silly. He’s still there at the bar, insisting that all he needs is a bit of self-belief and some tougher negotiation and that elusive great deal will soon come his way. His friends roll their eyes, shrug their shoulders and walk away.
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It was interesting to hear Liz Truss’s explanation of the Parliaments report on ‘Daily Politics’ 28/11/2018. It was further interesting to listen to Theresa May’s explanation this morning when she gave evidence to the ‘Liaison Committee’ this morning https://youtu.be/LDf9e3BiE5M from 11min from the start, plus her comments 1h 23m into the talk with Bernard Jenkin.
Liz Truss and Theresa May gave very clear explanations. Though in todays meeting Rachael Reeve seemed to have difficulty understanding what had been said.
This was an analysis of trade. Other factors beside trade affect GDP.
As I understand it the report does not present a forecast but it does present an economic analysis on growth. The statistics that you quote are reductions in the rate of growth, not GDP, as has been claimed by the MSM.
In all of the cases presented the economy continues to grow (but admittedly at a slightly lower rate) – as stated by Liz Truss, and Theresa May. Since the Treasury struggle to estimate GDP it gets rather lost in the noise.
As both the EU and our Government have instituted a policy of austerity, there is no surprise that our economy is growing at a snail pace.
Once we leave the EU our Labour Government will institute a policy of Government direction and support for businesses considered important for the economy.
The existing neoliberal policy instituted by the Tory party and the EU, that businesses know what is best for them (and the country) has failed – the majority.
We are currently experiencing the result of austerity, with our shops closing as a direct result of Tory policy – people cannot spend money they don’t have. Holding down wages and cutting benefits has removed billions of spending money from peoples pockets.
Our rich million and billionaires have money in gilts, earning very little interest – for people who in other times would have invested in industry, but there is no money in the economy and therefore no easy profits.
Welcome back.
This post is based round the notion that macro-economic forecasting has value. I don’t see any evidence for that. I see people who told us that not joining the Euro would be bad for Britain, and were wrong, and who told us that voting leave would lead to immediate recession, and were wrong again, now making more predictions with models that have been shown to consistently fail.
Furthermore, macro-economists have lost any ability to forecast productivity. Without that they have no ability to predict change. Just all at sea without a paddle.
I see no reason to believe these forecasts, and furthermore, if we give in now to these forecasts, then we will spend the rest of our lives being told what to do by economists. Why even bother with elections? Why just not let economists decide what is best?
All conversations are ultimately conversations about power. This is absolutely true of conversations about Brexit.
Precisely. Even Paul Krugman (no stranger to the political polemic) is raising an eyebrow at the methodology of this ‘forecast’. You can make an economic model say whatever you like if you put the right assumptions and data in the front end. To be honest I’m glad this figure has been produced, just as in the referendum campaign, they couldn’t resist going over the top. Its laughable, its so inept. And obviously politically produced.
It was the same point in the referendum campaign (when Osborne basically promised a plague of locusts the day after a Brexit vote) when I first began to believe that Leave might swing it. The arguments against were becoming so outlandish that they lost all power and became a joke. And we’re seeing the same all over again – a WTO Brexit will cause every evil known to man, and then some. I’m glad they’ve learnt nothing about the UK public.
There is more to belong to the EU than just trade.
You have 28 countries all wanting the best for their people.
But, there is also Brussels, they have their own agenda.
The EU started as a socialist project – but quickly during the seventies, changed to a Federalist ideal and then a Federalist neo liberal project, run for the benefit of Germany.
They started off with the idea that all countries should be equal, and to this idea they have held back wages in the advanced countries and have poured money into the Eastern poor countries.
Then they moved on, to holding back all wages, with the long term intention of competing with India and China on prices.
Hence the continued advertising of the EU’s successes in the Middle, far East and Africa. Which encourages migrants to journey to Europe for a better life and higher wages. This puts pressure on wages in Europe and housing and social services – for the benefit of the all ready rich.
Then we have Germany who run the EU, having lost two world wars, they are winning the peace by ignoring EU rules that do not suit them, who are running a much higher GDP than they should and thereby gradually moving money from the Southern EU countries, forcing mass unemployment, especially with young people. Promoting More integration, less nationalism all for Germany’s benefit.
Theres a lot more, like their recent proposal that Brussels should be the final arbiter on local planning, overriding local and national councils and governments.
That we the UK must change the way we pay for and deliver energy.
A European Court, set up by us to deal with post war problems that having little to do, produces law after law, thousands of them.
I think the “free market” believing hard Brexiteers have ulterior motives. That is to say, they actually know precisely what will happen and are just using it as a way to benefit themselves somehow. My knowledge of economics is limited and perhaps somewhat biased, but I wonder if it is a way of introducing some kind of “shock doctrine” tactics and setting off a wave of deregulation, privatization etc. which might benefit a few but not the majority of business let alone ordinary people. As for why the man who runs Wetherspoons wants it… run the competition who sell beer more expensive out of business?
Or maybe I am being cynical.
Great analogy, and one that doesn’t depend on the accuracy or otherwise of any forecast. However, I think you’re being optimistic when you say “Curiously enough, his old company have kept his job open. He can go back any time, with all his pay and benefits and his seat at the top table”. While the EU would probably agree to re-accession at some point in the future, I very much doubt it would be on the same terms. There would likely be no rebate, fewer opt-outs, and the EU might even insist we adopt the euro (if it’s still going). That cushy little number (our geopolitical “intersection” as you put it) is gone.
So now we are being told that the backstop is annoying to the EU and they will not want to hold us in it for any length of time (https://twitter.com/michaelgove/status/1068862705816223746). In which case it won’t be a problem for them to give it up once the deal has fallen in Parliament as a means of getting the deal through Parliament.
Something tells me that they won’t give it up. And excuse me for being cynical, but if people say something isn’t really that important, won’t get used, but refuse to give it up, then in reality it is important, and it will get used.
… and most of your contracts of employment probably have a description of your duties, place of work, and hours of work, but probably also have a clause that says you may be required to do other work, work in other places, and do other hours. If you find that the longer you stay in your job, the more your job actually consists of that other stuff, in other places, at unsocial hours, and whenever you mention it your employer just says “check your contract”, then you may feel at some point that this isn’t worth it.
And as you bump into that ex colleague who quit a few months ago, who says they don’t miss it, they’d rather be their own boss and see the kids than have to go wherever they are told whenever they are told, you may start making plans of your own.
In a free-market, all the participants are autonomous. They make decisions of their own free will. If company A decides not to buy a product from company B, it is pointless for company B to complain that company A doesn’t know what is good for it; company B just has to work out what product company A would buy. And if the marketing manager has put company B in a difficult situation by claiming that company A is going to agree to a great deal, and then this doesn’t happen, the marketing manager normally ends up on the streets.
There was an interesting TV programme about 18 months ago, about Dutch and Belgian ports that were preparing for Brexit, The managers of the ports made it clear that they were making preparations for a downturn in trade with the UK but that this would in the long-term be better than giving the UK a special deal because their priority was to protect the Single Market. The programme ended with a bizarre interview with a UK Tory MP who said that the ports should put pressure on their governments to give the UK a special trade deal. It was a bizarre interview because it isn’t the place of a UK Tory MP to tell European ports what their policies should be: Antwerp and Rotterdam have made their decisions (as have the German car-makers and the Gorgonzola cheese-makers), and they have every right to do so and it isn’t the place for a UK Tory MP to tell them to do something different. They are autonomous participants in a free market.
So the UK has tested the market and found that nobody is interested in making special deals with the UK. Rick is right in saying that those who … assured us that “the UK was such a powerful player that leaving the world’s largest trade bloc would actually make us better off, other countries would be desperate for trade deals with us and that the EU …. would fall over itself to conclude the easiest trade deal in history” have been proved wrong. We are not in the position that the Brexiteers assured us we would be in. It is time for a rethink, without the participation of those who have been proved so catastrophically wrong over the last 2 plus years.
“without the participation of those who have been proved so catastrophically wrong over the last 2 plus years.” … presumably you mean all those who predicted instant recession and mass unemployment immediately we voted to Leave and have been shown to be completely wrong.
It’s been a difficult time for the UK whilst an unwilling government tries to implement a mandate it requested but does not understand. For understandable reasons growth has been sluggish. But is it is still ahead of growth in the EU. What is their excuse?
just to bang on … “it isn’t the place of a UK Tory MP to tell European ports what their policies should be … they are autonomous participants in a free market”. But by the same argument, 17 million Brits are also autonomous participants in a free market, so you cannot use the opinions of others to say the 17 million are wrong. This argument keeps popping up, that other nations have voted differently so we should vote as they have, as though there are a set of sensible people, and then there are us who are not sensible people. But there is no such distinction.
The people we shouldn’t listen to are the ones who, in 2016, said that “the UK was such a powerful player that leaving the world’s largest trade bloc would actually make us better off. We would get the exact same benefits, other countries would be desperate for trade deals with us and the EU, terrified by the loss of one of its biggest members, would fall over itself to conclude the easiest trade deal in history.”
17 million people voted for Brexit on the basis of these assurances made by Gove, Johnson, Davis, Hannan etc. It would be good to know whether these 17 million people want to leave the EU even though it will make them less well off. Perhaps they do, or perhaps they think that it is other people who will be made less well off and not them. I actually want to hear more from them, now that they know that no country is falling over itself to give us special, advantageous trade deals.
I want to hear less from people like Theresa Villiers who was given space in a newspaper recently to tell the EU what it needs to do (which is none of her business).
It is illogical to have two confirmed remainers negotiating our leaving the EU.
Oliver Robbins has been a confirmed EU Federalist since he was at Uni.
Can you imagine, he having spent his whole life under EU rule, would want to leave?
His boss, also a long term remainer, is a confirmed and obvious liar, who has given away everything. Not only that, she is not an expert at anything, like every politician before her, she simply repeats what she is told – which is why she never answers a question, from the point of view, I have been there, I have done that, I know what is true.
Simply, just like you!
Is that a direct quote? if so from whom? Most Leavers said that it “should” be easy, and in not being easy it tells us about he true nature of the EU, that it is about political power.
I think in the long run many people will be better off, primarily at the lower-wage end because we can stop the process of mass-immigration to do low-wage tasks which forces down wages. As fewer people now come here from the EU we are seeing real wages rise.
The vote to leave was primarily about power, and the notion that the more power you have yourself the more scope you have to improve your living standards. Everything that has happened since confirms the suspicions of the majority of Leavers, that the long-term interest of the UK is in not being a colony of a Franco-German European empire. That is what most Leavers think and why the polls remain stubbornly unmoved despite all the Project Fear stuff.
Today we have the advice from the EU Advocate General that the UK should be able to unilaterally withdraw A50. And co-incidcentally France and Germany are pushing for a Tobin tax that, if implemented, would destroy London as a financial centre. also, Remainers have made it clear that they expect staying in the EU to deliver economic benefits, and the 52% who voted Leave will expect that to be delivered. If course, it won’t because the EU is incapable of delivering economic growth as it proves year after year. Overturning the referendum, by voter or second referendum, and staying in the EU would be the start of serious political problems in the UK.
Every ordinary person knows that when the time comes, you need to stand your ground no matter what, or else for ever you will live a life of fear and intimidation. To see your leaders openly daunted, intimidated, fearful, begging, completely lacking self-confidence, as we have seen, is a shameful thing. Many will never forget this, and never forgive.
Dear Dipper, finally i understand how could more than 50% of the British vote for Brexit. People as you speak about dignity, historical role of G.B. that I’m not denying at all, while all the Brexit is about tariffs, regulations and norms, and similar boring stuff. There is no glory in merchandise border crossing policy. Glory is from wining war against regimes of evil, asthe Nazi regime, what hopefully is well behind us.
In economy there is no vacuum. The Polish, Romanian and Czech waitresses will be replaced by emigrants from British colonies, namely Pakistan, India, Bangladesh, etc. not by the British. If you don’t know about it, i will tell you, only in these countries are ready to move hundreds of millions of people to supplement the demand. With the East Europeans, you had chance, they will be as British as yourself in the next generation, if they stay. Do you have the same experience with the people from Africa and the subcontinent?
The last, the EU is a first serious try to end with the continuous wars in Europe, that became more and more devastating. You are probably a decedent of fathers, who probably fought fiercely in the last two ones and for the right cause. By supporting Brexit, you are dishonouring their sacrifice.
….One more, glory and sovereignty.
you haven’t understood this EugenR.
My first-gen Polish mate has certainly become just as British as me. He voted to Leave too.
“the EU is a first serious try to end with the continuous wars in Europe”. Yes. It cannot both be that and an organisation committed to maximising economic wellbeing. And therein is a massive conversation that Remainers avoid by pretending that it can be both those things.
It was Mr Blistering Barnacles himself, Boris the Bullshitter, who said on 26th June 2016 that “There will continue to be free trade and access to the Single Market”.
His assumptions have been proved wrong. He should walk away into the sunset.
Success or otherwise is dependent upon the manner in which the deal is negotiated. With Theresa May undermining the BREXIT Secretary, a stream of people like Vince Cable, Catherine Bearder, the Labour Party members such as Corbyn, Abbott, and others like Kenneth Clarke, Nicky Morgan, Anna Soubry and Dominic Grieve undermining the negotiations. With Barniers preparedness to meet these people. It is hardly surprising that the EU have exploited the situation to their advantage, have been obstructive, and have produced an apauling deal.
This problem has been caused by a lack of professionalism from those individuals.
Your comment concerning Boris Johnson who has not been directly involved in the negotiations is offensive.
May I remind you. That nothing is agreed until everything is agreed.
We have to wait for the end of negotiation before we know what has been agreed. Davis is right, things will run up to the last minute, before the EU will really negotiate. Hold your breath.