Brexit discussion thread II

solodeogloria · 13-11-2017 02:28PM

Capt'n Midnight wrote: »

It's no more lost than the drop in house prices.

The bricks and mortar in a persons home are still the same even if those with foreign currency can buy then at a substantially discounted price compared to before the vote.

Good afternoon!

In a sense stating that currency / forex risk affects any asset held in a currency is unremarkable. It also works both ways. If someone receives payment in currencies that have strengthened to sterling it will also be beneficial. This happens all the time. Sterling was overvalued for a long time and the IMF noted this in 2015.

Another way of looking at it is if you have liabilities expressed in sterling like all mortgage holders they won't increase provided you have a decent fixed term mortgage and it won't be subject to currency risk in terms of sterling based earnings.

The vast majority of British homeowners are going to be staying in the UK. Yes, it will have an impact on moving to other countries if that's what you've decided to do.

Samaris wrote: »

I know that's snark rather than a serious suggestion, but the EU saw currency issues in advance and have put in the condition that the money is paid in euros . Sensible of them given the state of £Sterling!

Again - currency value is not the only metric of an economy. It isn't meaningful to say that if a currency loses value that it means the economy has gone to the dogs. In the case of Britain in 2017 that isn't true. It's faring incredibly well this year despite uncertainty.

The pound has strengthened in comparison to a lot of currencies including the Swiss franc, the yen and the dollar in the last year.

This doesn't mean that the US, Japan or Switzerland aren't doing well economically.

The truth is that the British economy has slowed but is still growing despite a huge amount of uncertainty. The British economy is proving itself to be remarkably resilient. I think clarity at the end of the Brexit process will be good rather than bad for Britain.

Edit: It's really encouraging to hear that working groups are in place for discussing terms with 21 countries according to Liam Fox in the Financial Times. The truth is that the UK can and will be successful outside of the EU.

Much thanks,
solodeogloria

View · 13-11-2017 02:55PM

blanch152 wrote: »

listermint wrote: »

Could it not be argued that the point of a Hard Border would have to be 'put' to the population as part of the GFA

Anything can be argued, and there may well be an argument along it being within the spirit of the agreement and/or that it is politically desirable, but wes was calling on the Irish government to take legal action. I do not see any legal requirement to hold such a referendum.

It would also be interesting to see where advantage lies in these things and what are the crucial issues. For example, take a situation whereby a deal was possible for a hard border along the Irish Sea with special status for Northern Ireland within the EU, with Single Market, ECJ, Customs Union etc. applying to Northern Ireland but a cast-iron guarantee for unionists that the Queen would remain sovereign in everything else, and that the flag of Northern Ireland would be the British flag, no referendum for a generation, and the Irish government in order to preserve an open border signing up to such guarantees? In other words, some practical steps towards unity in exchange for the big issue of sovereignty being put on a very long finger. An FG Taoiseach might deliver that.

This could pose the most difficulty for Sinn Fein. At the end of the day, they are not particularly interested in a soft border, because they lose moneymaking opportunities and it doesn't particularly advance unity. A hard border with severe economic disruption in Northern Ireland is SF's best case for securing unity in the medium term as moderate unionists are persuaded with their pockets.

Unionists aren’t going to support any agreement “with practical steps towards unity” anymore than the Oireachtas will support one with practical steps toward us rejoining the UK.

steddyeddy · 13-11-2017 03:14PM

blanch152 wrote: »

If there is to be a hard Border along the Irish Sea, it will require an agreement between the UK, Ireland and the EU. Such an agreement would replace parts of the GFA and could contain anything.

A sea border is the least likely to damage the GFA IMO. The EU already favour it.

murphaph · 13-11-2017 03:33PM

steddyeddy wrote: »

A sea border is the least likely to damage the GFA IMO. The EU already favour it.

Probably true but it damages the NI economy more than a hard land border.

Brexit is such a cluster**** there is just no good solution to any of this.

Sam Russell · 13-11-2017 03:36PM

solodeogloria wrote: »

Good afternoon!

In a sense stating that currency / forex risk affects any asset held in a currency is unremarkable. It also works both ways. If someone receives payment in currencies that have strengthened to sterling it will also be beneficial. This happens all the time. Sterling was overvalued for a long time and the IMF noted this in 2015.

Another way of looking at it is if you have liabilities expressed in sterling like all mortgage holders they won't increase provided you have a decent fixed term mortgage and it won't be subject to currency risk in terms of sterling based earnings.

The vast majority of British homeowners are going to be staying in the UK. Yes, it will have an impact on moving to other countries if that's what you've decided to do.

Again - currency value is not the only metric of an economy. It isn't meaningful to say that if a currency loses value that it means the economy has gone to the dogs. In the case of Britain in 2017 that isn't true. It's faring incredibly well this year despite uncertainty.

The pound has strengthened in comparison to a lot of currencies including the Swiss franc, the yen and the dollar in the last year.

This doesn't mean that the US, Japan or Switzerland aren't doing well economically.

The truth is that the British economy has slowed but is still growing despite a huge amount of uncertainty. The British economy is proving itself to be remarkably resilient. I think clarity at the end of the Brexit process will be good rather than bad for Britain.

Edit: It's really encouraging to hear that working groups are in place for discussing terms with 21 countries according to Liam Fox in the Financial Times. The truth is that the UK can and will be successful outside of the EU.

Much thanks,
solodeogloria

Relative values of a currency vs other trading currencies is not, per se, an indication of the relative strengths of a countries economy. However, neither is GDP, or exports, or balance of trade. It is when all of these are taken together that a picture emerges.

For example, when Apple transferred IP assets to Ireland, it showed up as a huge rise in GDP and cries of Leprechaun economics. Last December, there was a rise in UK exports that was hailed as a success for Brexit. It turned out to be a large repatriation of Gold that had no positive reflection on the UK GDP.

Unless the UK move on the first three items on the agenda, the future of the UK economy is in unchartered territory, and into a time of huge uncertainty. No business likes either, and tend to make contingency plans to get to safety.

You appear to be whistling as you pass the graveyard.

steddyeddy · 13-11-2017 03:40PM

murphaph wrote: »

Probably true but it damages the NI economy more than a hard land border.

Brexit is such a cluster**** there is just no good solution to any of this.

I'm not sure that is the case, but we shall see.

murphaph · 13-11-2017 03:48PM

steddyeddy wrote: »

I'm not sure that is the case, but we shall see.

I personally hope for the sea border because it's better for the RoI and we have to think of ourselves first in all this.

One would naturally hope for NI that they could over time refocus their economy on servicing the GB less and the EU more. But it will definitely be a hell of a shock to the NI economy to disconnect it from GB.

Chips Lovell · 13-11-2017 03:49PM

It's been discussed before. John Fitzgerald had a piece about it in the Irish Times back in August:

The Northern Ireland economy relies heavily on imported goods, three-quarters of these coming from Britain. The result is that there would be far more dislocation to the North’s internal economy from a customs border between Britain and the North than from one between the North and the Republic, as the Republic is a minority supplier to the North.

In addition, exports from the Northern Ireland economy to the EU (including Ireland) are only 40 per cent of the value of the exports going to Britain. Once again, for the North’s exporters customs-free access to the British market is far more important than access to the EU market.

Vronsky · 13-11-2017 04:08PM

With the stated position of the UK now clear (albeit unworkable) on the Irish border, we can now deduce their overall future trade strategy.

The UK has stated two things - NI will not diverge from the mainland UK regulatory or customs wise and that they will not build any border infrastructure. Taking them at their word and since afaik they are not allowed to discriminate wrt WTO rates for different countries they do not have an agreement with, this looks like they are going to adopt the Minford proposal - the full open economy with zero tariffs.

This would allow them to refrain from building the border infrastructure (keeping their end of the GFA) - leaving only customs posts on the Irish side, which are an Irish problem. This would be a huge issue for Ireland since smuggling would undermine the Irish membership of the customs union and single market. One food scare due to smuggling and Ireland would be suspended from the SM.

It would also destroy the rural economy of the UK - but I have a feeling they will sacrifice them anyway.

Nody · 13-11-2017 04:30PM

Vronsky wrote: »

This would allow them to refrain from building the border infrastructure (keeping their end of the GFA) - leaving only customs posts on the Irish side, which are an Irish problem.

Until one year in the UK government realizes how much money they lost on alcohol, tobacco and fuel due to there being no taxes paid on the smuggled products coming over from NI without any border controls what so ever stopping them. You'd be talking easily six if not seven figures for a truck of cheap smokes imported lost due to taxes (rough estimation of 500.000 cigarettes per pallet, 24 pallets with an average tax of £6.73 per pack of 20 as per 2014 and you'd look at just over £4 million lost per truck load).

ancapailldorcha · 13-11-2017 05:50PM

Looks like Parliament is getting the final say on the Brexit deal:

BBC wrote:

Parliament will get a vote on the final Brexit deal before the country leaves EU, minister David Davis has told MPs.

He said the terms of the UK's exit, including any transition deal and agreement on citizen rights, would have to become law via new legislation.

And he said MPs would have the opportunity to reject or amend such legislation, saying "the agreement will only hold if Parliament approves it".

The concession comes as MPs prepare to debate key Brexit legislation.

Professor Moriarty · 13-11-2017 05:55PM

ancapailldorcha wrote: »

Looks like Parliament is getting the final say on the Brexit deal:

Just like the demands for the research papers to be published and other Brexit matters, they're afraid to put anything to a vote. It's another vain attempt to pacify Tory rebels.

Nody · 13-11-2017 05:56PM

ancapailldorcha wrote: »

Looks like Parliament is getting the final say on the Brexit deal:

Talk about sheep to the slaughter house... "Hey guys here's the latest deal. You can reject it and we leave on no terms at all or you for it and either way you'll be held responsible for **** that comes afterwards."

This vote is the definition of blame shifting from the government to them as individuals in being complicit in a very bad outcome (either way the vote falls) and they take it all in as a great success...

ancapailldorcha · 13-11-2017 05:58PM

Nody wrote: »

Talk about sheep to the slaughter house... "Hey guys here's the latest deal. You can reject it and we leave on no terms at all or you for it and either way you'll be held responsible for **** that comes afterwards."

This vote is the definition of blame shifting from the government to them as individuals in being complicit in a very bad outcome (either way the vote falls) and they take it all in as a great success...

That's one interpretation. Surviving for more than a year is a tall order for the current government when they can even deal with a racist like Johnson and various sexual predators without the risk of complete collapse.

LeinsterDub · 13-11-2017 06:02PM

Labour’s Hilary Benn, the chair of the Brexit committee, says it is increasingly clear there is a fundamental contradiction between wanting to leave the customs union and not having a border in Northern Ireland.

Davis says there are a range of possible outcomes. If the government achieves its goal of having tariff-free, friction-free trade with Europe, any customs deal would be very light touch.

https://www.theguardian.com/politics/blog/live/2017/nov/13/boris-johnson-should-resign-if-british-womans-jail-term-in-iran-gets-extended-says-labour-mp-politics-live

Seriously? This contradiction is only becoming apparent to UK politicians now? Perhaps they should read this thread were this has been called out numerous times. The level of self delusional is criminal at this stage.

A Little Pony · 13-11-2017 06:05PM

Irrelevant as the EU states will never vote for a deal anyway. This whole thing is a complete and utter waste of time.

wes · 13-11-2017 06:15PM

blanch152 wrote: »

What do you mean by "certainly broken neutrality"?

DUP in the government. Pretty clear one if you ask me.

blanch152 wrote: »

Brexit has nothing to do with the ECHR, so doesn't answer the question as to how Brexit breaches the GFA.

Your technically right, but May wants out of any European courts as part of Brexit. So there pretty much stating they want to break an important part of the agreement.

blanch152 wrote: »

Social media is full of these kinds of statements that Brexit breaks the GFA, yet I have never seen any convincing argument that this is so.

Fair enough, but I think there is a potential case there.

Professor Moriarty · 13-11-2017 06:25PM

Interestingly, Davis, in reply to Soubry, confirmed that a no-deal Brexit would not be put before parliament.

A Little Pony · 13-11-2017 06:30PM

That is because a deal is as likely as Liverpool winning the league this year, zero.

Nody · 13-11-2017 06:37PM

Professor Moriarty wrote: »

Interestingly, Davis, in reply to Soubry, confirmed that a no-deal Brexit would not be put before parliament.

Beyond the fact any vote on a final deal is a sham; let's say they would put it up for a vote for a "no deal" what would you expect to be the outcome? Government told to go back and get a deal somehow with a month to go after failing for two years? Magically twist EU's arm? Even if UK would somehow decide to give up on every point how is it suppose to be achieved in the time left?

The simple fact they even have a vote is silly. Let's play the three scenarios possible:

1) No deal - No vote
2) Deal - Vote yes in parliament and implemented (now all who voted yes are sharing the blame for the outcome)
3) Deal - Vote no in parliament and UK ends up with "no deal" (and all who voted no now share the blame for the outcome)

No matter the scenario the parliament vote is meaningless because no matter the outcome they can't do anything about the outcome except making it worse. The vote that actually mattered was the trigger for article 50; not the vote at the end when it's a rubber stamp exercise.

Water John · 13-11-2017 06:47PM

The decision to put a final deal to Parliament is not of any long thinking policy. It's about surviving until next week. That is about the vision of this present cabinet.

solodeogloria · 13-11-2017 07:21PM

A Little Pony wrote: »

That is because a deal is as likely as Liverpool winning the league this year, zero.

Good evening!

I'm a touch more optimistic than you. If I was to draw a line with extremes I'd probably have something like this.

Staying in the EU by the back door|Ideal scenario - regaining control and maintaining trade with the EU|No deal
Terrible outcome, no benefit on today. A loss of decision making over regulations. Paying fees. Free movement continuing. No point in having left the EU. Government can honour basically nothing from the referendum. Less risk for basically no improvement on current terms. |Allows the Government to be faithful to electorate. Controls on immigration can be put in place. A good deal with the both parties to import a substantial amount of goods and potentially services in and out without tariffs and potentially reduced non-tariff barriers. Government can expand trade with other countries. Much much harder work than no deal or EU-by-the-backdoor. Financial settlement will need to be paid but not indefinitely. Honours the referendum campaign. | Government can trade freely with other countries but faces tariffs and non-tariff barriers in terms of goods and services. Controls on immigration can be out in place. Impact on existing useful areas of cooperation gone overnight. This isn't desirable.

Given that structure of how I see it the course of travel my hope is a harder path. It's at risk of the Prime Minister caving in and not really delivering Brexit by giving a terrible deal, it's also at risk of harder core people saying chuck in the towel and go home. But let's be honest this isn't honouring the vote either.

If there is a deal the UK needs to take back real tangible control from the EU. The alternative is a bad deal. I agree broadly that a deal should be aimed for.

Much thanks,
solodeogloria

steddyeddy · 13-11-2017 07:31PM

Baron de Charlus wrote: »

It's been discussed before. John Fitzgerald had a piece about it in the Irish Times back in August:

But a sea border is certainly better for the republic. We're already going to suffer because of Brexit. Better to apply pressure that will work out better for us. Northern Ireland's economy is 70% services. It won't survive being out of the single market and it certainly won't grow during Brexit.

Professor Moriarty · 13-11-2017 07:42PM

Nody wrote: »

Beyond the fact any vote on a final deal is a sham; let's say they would put it up for a vote for a "no deal" what would you expect to be the outcome? Government told to go back and get a deal somehow with a month to go after failing for two years? Magically twist EU's arm? Even if UK would somehow decide to give up on every point how is it suppose to be achieved in the time left?

The simple fact they even have a vote is silly. Let's play the three scenarios possible:

1) No deal - No vote
2) Deal - Vote yes in parliament and implemented (now all who voted yes are sharing the blame for the outcome)
3) Deal - Vote no in parliament and UK ends up with "no deal" (and all who voted no now share the blame for the outcome)

No matter the scenario the parliament vote is meaningless because no matter the outcome they can't do anything about the outcome except making it worse. The vote that actually mattered was the trigger for article 50; not the vote at the end when it's a rubber stamp exercise.

In your deal scenarios 2 and 3, many politicians would be highly motivated to ensure they were on the losing side. Of course, if many polticians vote for what they think will be the losing side then the law of unintended consequences might enter the equation.

Sam Russell · 13-11-2017 07:49PM

Is there any official information as to what is exported or imported between NI and GB?

How much of that would not be available through shipping via Ireland? For example, how much of what Tesco import into NI is the same as the goods imported into the republic? Would it make any difference if NI was supplied from a warehouse in Naas rather than one in Manchester if it is the same product? Aldi and Lidl already do this.

How much non-agricultural product is exported from NI to anywhere and what percentage ? I know about Bombardier and Wright buses but what else is there of any consequence?

The UK subsidy for NI is about 60% of their GDP - will that be affected by Brexit? Much of the rest comes as a gift from the EU in the form of regional funds and CAP farm payments - how much of that will be paid by the UK Gov?

It is worth noting that the UK subsidy to NI is greater than their net payments to the EU.

steddyeddy · 13-11-2017 07:51PM

LeinsterDub wrote: »

https://www.theguardian.com/politics/blog/live/2017/nov/13/boris-johnson-should-resign-if-british-womans-jail-term-in-iran-gets-extended-says-labour-mp-politics-live

Seriously? This contradiction is only becoming apparent to UK politicians now? Perhaps they should read this thread were this has been called out numerous times. The level of self delusional is criminal at this stage.

I used to think the Tories were economically conservative. I.E they didn't do anything mad with the economy. The fact that they're leaving a trading zone without a safety net or knowledge leads me to think otherwise.

Gerry T · 13-11-2017 07:52PM

solodeogloria wrote: »

Good evening!

I'm a touch more optimistic than you. If I was to draw a line with extremes I'd probably have something like this.

Staying in the EU by the back door|Ideal scenario - regaining control and maintaining trade with the EU|No deal
Terrible outcome, no benefit on today. A loss of decision making over regulations. Paying fees. Free movement continuing. No point in having left the EU. Government can honour basically nothing from the referendum. Less risk for basically no improvement on current terms. |Allows the Government to be faithful to electorate. Controls on immigration can be put in place. A good deal with the both parties to import a substantial amount of goods and potentially services in and out without tariffs and potentially reduced non-tariff barriers. Government can expand trade with other countries. Much much harder work than no deal or EU-by-the-backdoor. Financial settlement will need to be paid but not indefinitely. Honours the referendum campaign. | Government can trade freely with other countries but faces tariffs and non-tariff barriers in terms of goods and services. Controls on immigration can be out in place. Impact on existing useful areas of cooperation gone overnight. This isn't desirable.

Given that structure of how I see it the course of travel my hope is a harder path. It's at risk of the Prime Minister caving in and not really delivering Brexit by giving a terrible deal, it's also at risk of harder core people saying chuck in the towel and go home. But let's be honest this isn't honouring the vote either.

If there is a deal the UK needs to take back real tangible control from the EU. The alternative is a bad deal. I agree broadly that a deal should be aimed for.

Much thanks,
solodeogloria

I don't think any of these 3 options are possible.

1. Staying in the UK by the back door - my understanding is all 27 member states would have to vote yes for the UK to stay. Thants not going to happen. Anything else is a deal which is below as item 4.

2. Leaving and staying ??? - do you think the UK can leave and stay in the single market, thats what I think this option is saying. This is never going to happen, again see option 4

3. Hard brexit - is this also workable, the UK has ZERO trade deals with ANY country. It will have to setup deals, how long do you think that will take ? Also doesn't WTO only cover goods, I don't think it covers services, what happens to the UK'f financial service sector, how long can it wait for deals with countries, 7 to 8 years ?

4. Hard brexit - it's now looking like the most likely option, unless an extension is given but I doubt all 27 member states would agree. SO under this hard brexit the UK will renege on its financial commitments, that just my opinion. No trade deal and the start of the collapse of the UK service sector, mass leave of multinations bar the low skill like T-shirt manufacturing. Within 1yr a new govt, followed by a new referendum, followed by the UK applying for EU membership, ditching of Stg.

steddyeddy · 13-11-2017 07:55PM

Sam Russell wrote: »

Is there any official information as to what is exported or imported between NI and GB?

How much of that would not be available through shipping via Ireland? For example, how much of what Tesco import into NI is the same as the goods imported into the republic? Would it make any difference if NI was supplied from a warehouse in Naas rather than one in Manchester if it is the same product? Aldi and Lidl already do this.

How much non-agricultural product is exported from NI to anywhere and what percentage ? I know about Bombardier and Wright buses but what else is there of any consequence?

The UK subsidy for NI is about 60% of their GDP - will that be affected by Brexit? Much of the rest comes as a gift from the EU in the form of regional funds and CAP farm payments - how much of that will be paid by the UK Gov?

It is worth noting that the UK subsidy to NI is greater than their net payments to the EU.

Indeed. I wonder how NI out of the single market can be better than NI in the single market. The UK will also be less likely to be able to afford the subsidy to Northern Ireland given the fact that it will doubtlessly need to be increased as Brexit damages the NI economy.

Sam Russell · 13-11-2017 08:06PM

Gerry T wrote: »

I don't think any of these 3 options are possible.

1. Staying in the UK by the back door - my understanding is all 27 member states would have to vote yes for the UK to stay. Thants not going to happen. Anything else is a deal which is below as item 4.

2. Leaving and staying ??? - do you think the UK can leave and stay in the single market, thats what I think this option is saying. This is never going to happen, again see option 4

3. Hard brexit - is this also workable, the UK has ZERO trade deals with ANY country. It will have to setup deals, how long do you think that will take ? Also doesn't WTO only cover goods, I don't think it covers services, what happens to the UK'f financial service sector, how long can it wait for deals with countries, 7 to 8 years ?

4. Hard brexit - it's now looking like the most likely option, unless an extension is given but I doubt all 27 member states would agree. SO under this hard brexit the UK will renege on its financial commitments, that just my opinion. No trade deal and the start of the collapse of the UK service sector, mass leave of multinations bar the low skill like T-shirt manufacturing. Within 1yr a new govt, followed by a new referendum, followed by the UK applying for EU membership, ditching of Stg.

The UK are finding difficulties with all three of the prerequisites for a deal.

1. They want the EU to whistle for the money they have previously committed to pay - even as late as the Florence speech.

2. They have rowed back from commitments made re EU citizen's rights.

3. They have made no proposals for the NI border other than magic beans.

If they want to reverse the Brexit situation, the the EU would demand they pay the cost of the Brexit negotiations (about €1bn) plus they forget about the rebate they currently enjoy, and that they join the Euro, plus revoke ever being able to invoke article 50 again.

If they fail to agree the first three requirements, then a hard Brexit it is, with no airplanes, queues of lorries from Dover to London, and all car manufacturing stopping due to parts being stuck in Calais, and City of London going on a three day week plus a few unforeseen disasters, like the NHS collapsing due to staff shortages.

Doomed, I say. Doomed.

Water John · 13-11-2017 08:06PM

I think one might need to go back in history to see the effects of the Corn Laws removal to, in some way measure the impact of a Hard Brexit on UK and NI farming, disastrous.

Brexit discussion thread II

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