British Indy: What Happens Now?

Another vote is almost certainly the next step if Mays deal does not get through Parliament. The politicians are incapable of using commonsense.

 

This is the thing though, thinking we have control via and over Brexit is silly

If that were the case, why is May going around the constituencies trying to wind up voters to put pressure on their own mp's to support her deal ?

In the same way people have turned into drones and clones through social media and whilst having smart tech have become so reliant on them that they have become dumber/lazier I wonder if that has effected our politics.

As Brits, we have more than our fair share of "let some one else do it" and I wonder if that's how we view our politics? Is it that we like incompetent parliaments and politicians, just so we can moan about them? To actually use our vote and change things seems to be something we are reluctant to do.

I mean look at the brexit vote, one of the biggest since ww2, we voted and actually showed that people power is more powerful than politicians, business and other countries telling us what to do. By doing that, it seems to have scared a lot of people, an actual democracy where votes can change the status quo. I wonder therefore is it scared or lazyness?

Look at the Swiss and they are having referendums all the time, that is people involvement but it also requires input from its people.

In many ways Brexit is just not about brexit only. If you genuinely want to have a voice then you need to vote, if you want your parliament to tell you what to do all the time, then perhaps the eu is for you

 

And some more independent balance:
Paul Krugman, whose work on trade won the Nobel prize in economics in 2008, said the GDP decline scenarios looked “extremely high”.
Another trade discussion where I would like to believe the worst but not convinced: Brexit. The Bank of England just released some very dire scenarios 1/ https://www.bankofengland.co.uk/-/media/boe/files/report/2018/eu-withdrawal-scenarios-and-monetary-and-financial-stability.pdf?la=en&hash=B5F6EDCDF90DCC10286FC0BC599D94CAB8735DFB …



And I won't make a full judgement until I see the details. But their bad-case losses from a no-deal Brexit look extremely high. I mean, 8 percent of GDP was the kind of estimate we used to make for countries with 150 percent effective rates of protection. - Paul Krugman

One matter that I never see accounted for is if we can escape the EU shackles entirely, then we can take steps to make our economy more competitive. Incentives for manufacturers/tax breaks even new Enterprise zones. I'm convinced that with a pro-business government we can start to improve GDP, put in place proper Apprenticeships and Vocational training programmes. Really put us in the right place for the next AI revolution. We need to act with confidence and not be scared off.

 

9th December at Whitehall. I hope that (but doubt) thousands of people will turn up.

 

I rarely cut and paste a big piece like this but having read what David Davis has to say, all of which can be fact checked, then surely it's impossible to see the bank of englands recent forecast as anything other than scaremongering isn't it?


Quote:

The Treasury and the Bank of England will later today be issuing new forecasts comparing the Government’s Fake Brexit deal with a WTO exit.

I don’t often quote the FT, but I will do it this time: “Theresa May is preparing to use an economic assessment of her much-criticised Brexit deal to try to win over sceptical MPs.”

The FT makes no comment about the reliability of the Treasury’s last attempt at playing Mystic Meg.

My point is simple enough. The Treasury’s forecasts in the past have almost never been right and have more often been dramatically wrong.
The Treasury forecasts for the effects of a Leave vote made in May 2016 are these. They said that in the 18 months after the referendum the economy would contract by at best 0.1 per cent and at worst 2.1 per cent. What happened? It grew by 2.8 per cent.

The Treasury was wrong to the tune of between 2.9 – 4.9 per cent. This is a sum of up to £100 billion. Quite a lot of money. Quite a big mistake.

Of course, not all of us are brilliant at computing percentages of GDP, so George Osborne spelled out the numbers in starker terms. Unemployment would jump by 520,000 under the “cautious” projection and by 820,000 if the exit was on WTO terms. Voting to leave the EU would, over time, render the average UK family £4,300 a year worse off.

Osborne also used a visit to B&Q’s head office to predict a “Do-It-Yourself” recession as a result of a Leave vote. He prophesised falling house prices and severe damage to the public finances. A “punishment Budget” featuring tax rises and spending cuts was on the cards immediately after a Leave vote. Astonishing idea, of course, to respond to an expected downturn by clamping on a tight fiscal squeeze.

Needless to say, none of this spine-chilling nonsense came to pass. Families are no worse off and the economy has since grown by around 4 per cent. Unemployment has fallen by hundreds of thousands.

Earlier this year, the Treasury leaked its “Cross-Whitehall Brexit Analysis” in the shape of 24 PowerPoint slides to the website Buzzfeed. It caused quite a buzz – not least because it now predicts a huge 7.7 per cent of GDP hit to the economy in the event of a WTO exit. An exit with a Canada-plus deal was forecast to be painful, too, with GDP 4.8 per cent smaller than would be the case if we stayed in the EU.

Quite why the Treasury and its offshoots get things so wrong is an intriguing question.

The truth is that the Treasury is more often wrong than right. And the same goes for the OBR. They missed reality in 2009 by almost 6 per cent. That is equivalent to a miss of £120 billion today.

George Osborne was initially predicted to be more than 50 per cent likely to eliminate the deficit. The productivity growth forecasts of 2010 were 6 times larger than reality. The UK was supposed to enter a recession if there was a vote to leave the EU.

And just this year it emerged that the OBR’s previously predicted borrowing for 2017/18 would be £16 billion more than the out-turn. It is amazing the amount of money Whitehall finds down the back of the sofa.

Unsurprisingly, the dramatic numbers take the headlines, and people fail to notice that they are caused by forecasting errors.

Take Osborne’s £27 billion windfall in 2015, for example. The Chancellor hurriedly moved to spend it on tax credits and departmental budgets.

But, just a year later, he had to take it back. The OBR had undershot their borrowing forecasts by some £58 billion. As the OBR boss, Robert Chote, said at the time, “what the sofa gives, the sofa can also take away.”

But don’t take my word for it. I see from the Prime Minister’s interview with the Sun that she also has doubts about the Treasury and its forecasts. After all, and I quote, “they don’t always reflect every factor that can be taken into account… these things are always based on a set of assumptions.”

And it is notable – and frankly disgraceful – that the Chancellor has done his studio round today without publishing the underlying assumptions. Remember: forecasts are not facts: and theses are just polemical projections.

Professor Minford, of the Economists for Free Trade, has sought to explain the forecasting errors. First, he believes that the Treasury’s past reliance on the gravity model of trade has led it astray. A word on the gravity model, this assumes that trade flows are highest – and the economic benefits are greatest – when trading partners are in close geographical proximity. Europe is on our doorstep, ergo trade deals with the EU are of more value than those with more distant lands. This was possibly true when the commodities were bulky, heavy and of moderate value – coal, steel, wheat, sugar, for example – and the cost of transport was a significant proportion of the product cost. But not today.

The alternative model, the classical one developed by Ricardo in the 19th Century, assuming high competition across world markets, better fits the modern facts and predicts bigger gains from global trading on WTO terms. Transport costs are a tiny fraction of the cost of, say, an iPhone – or a near zero fraction of trade in services. This has the effect of making the entire globe the market in which we exercise comparative advantage.

Other things matter more than distance – a common language, for example, or communication links.

The good news is that – following strong criticism – the Treasury claims to recognise the limitations of its gravity model and has now switched to an improved alternative. But it has undermined its own work. If they are the same as previous work this year the assumptions it has fed in to this new model are faulty for three crucial reasons.

Firstly, the Treasury’s Cross-Whitehall analysis has made pessimistic assumptions about the positive effects of free trade on UK growth. If the UK were to adopt global free trade, the forecast predicts modest long-term gains of as low as 0.3 per cent of GDP.

This is extraordinary. One of the few things upon which economists agree is the great beneficial effect of free trade. Australia’s trade liberalisation delivered a 5.4 per cent long-term boost to GDP. This figure corroborates the Economists for Free Trade calculation of a 4 per cent boost for the UK.

The Treasury seems to assume that free trade matters when it is with the EU, but not when it is with anybody else.

The second flawed assumption in the Whitehall analysis is that there will be high border costs, from processing customs declarations and rules of origin certificates. They believe there will be extensive physical inspections at the border, even under a UK-EU free trade arrangement. This belies the way modern computerised pre-declared border procedures actually work. After all, only two to three per cent of goods are ever inspected.

Unlike the 6 per cent cost assumed by Whitehall, modern border costs are typically well under 1 per cent of the value of goods – and Switzerland measures its actual cost to be only about 0.1%.

Finally, Whitehall’s third flawed assumption is the belief that various non-tariff barriers will spring up immediately after Brexit. But after decades of integration, it’s absurd to suggest the EU will suddenly decide that our regulations aren’t good enough.

Whitehall assumes the cost of such NTBs will be equivalent to a 16 per cent tariff if we have a free trade agreement and 20 per cent if we leave under WTO rules.

These figures are truly massive. The total effect of Whitehall’s assumptions is that the UK – beginning with identical product standards and regulations – would face an effective EU tariff of about 30 per cent under WTO rules. This is about one and a half times the actual tariff faced by the US. Of course, given that we currently have shared product standards, this would be illegal under WTO rules.

These flawed assumptions have led to Whitehall’s central forecast – a 6% loss of GDP under WTO rules. Using the same modelling approach but with more reasonable assumptions, Economists for Free Trade calculates a GDP boost of about 3 per cent.

This helps to explain why the Treasury’s latest stab at forecasting produced a result fully in line with the 2016 version of Project Fear.

The Treasury insists that leaving the Single Market and customs union would do grave damage to the economy due to the loss of trade. However, it also insists that signing FTAs with other major world economies would do little good. Talk about facing two ways at once.

There is another problem with the Whitehall analysis that must be considered. There is a consistent overestimation of the positive impact the Single Market has on the British economy.

The Single Market was touted as a “vital national interest” during the referendum campaign. Project Fear constantly pushed doom-laden messages of economic ruin following a Leave vote.

However, this belief has no basis. The Single Market’s regulations are much less beneficial than assumed for the British economy.

Its rules are rigged in favour of big corporations. It suppresses innovation, competition and growth.

Sober analysis of the trading relationship between the UK and the EU spectacularly dispels the myth that the Single Market is vital for the British economy.

The researcher, Michael Burrage demonstrates that growth of UK exports to the EU has been lower during the era of the Single Market than it was during the common market decades between 1973 and 1992. Our export growth to the EU lags far behind much of the world. We are surpassed by many countries that trade with the EU on WTO terms.

Moreover, UK exports to non-EU countries under WTO based rules have grown four times faster than UK exports to the EU.

As Burrage’s work shows, EU-UK trade has been steadily declining whilst UK trade with the rest of the world has been rapidly increasing. The future of the UK economy does not lie with the European Union but with the wider world.

Contrary to the Whitehall dogma, the Single Market has not been the accelerator claimed for the British economy. We must stop worshipping at the altar of false gods.

Everyone supports evidence-based policy-making, but only the Treasury supports policy-led evidence.

Of course, apocalyptic Treasury forecasts of the grim effects of leaving the EU’s orbit are only part of Whitehall’s armoury of intimidation.

Plenty more will be hurled in the direction of MPs considering voting against the Government’s deal. Cheered on by the establishment media, we will be warned against “crashing out” of the EU and tumbling over a “cliff edge”.

They’ve claimed that planes will be grounded, and hauliers will suffer unprecedented delays. There’s been vehement insistence that Kent will become a lorry park, and hysteria over the rationing of food and medicine. Even Mars Bars will apparently become a thing of the past.

For example, the Healthcare Distribution Association has claimed that the UK will run out of insulin. However, when Channel 4’s Fact Check spoke to the UK’s leading suppliers (Sanofi, Novo Nordisk and Lilly) the companies all said that they don’t expect significant problems in the event of a no-deal Brexit.

Another foolhardy claim is that the UK will run out of food “within days”. Allegedly this would be because of a paralysed Port of Dover. Nothing, apparently, would be able to get into the country.

We’ve had long-term stoppages before, such as 26 days through the summer of 2015. Whilst this was costly, it was not as crippling as the wilder claims have inferred.

As my colleague John Redwood has pointed out, this is all nonsense. The EU is running a near £100 billion a year trade surplus in goods with the UK. The implication of this is just as we work to eliminate problems at the border, so will our European colleagues in Calais, Zeebrugge, Antwerp and Rotterdam.

If Parliament rejects the Governments’ current proposal, then the Government can press for a Canada-plus free trade deal backed by technical solutions on the Irish border. If intransigence from Brussels denies this, we should announce an exit on WTO terms and accelerate preparations for such an outcome.

 

That sounds sensible to me.

I’m more and more convinced the politicians will do anything to remain though

 

i would do it for free. just for the craic. move things around a lil, stir things up a bit. then sit back and reap the deserved admiration.
anyhoo, why are all these government body's and think tanks, the ONS ect, fallen out of favor? they where all the voice of respect and reason just a few short years ago, why are you guys always late to the party?

 

As am I and it's really disheartening

The more you read about these economic forecasts, the language used to deliver them, the data they've built them on and the models used, it becomes much clearer that Carney et al are simply trying to use psychological bullying to steer things their way, very possibly for the benefit of their 'chums'...whomever they may be

Carney has always over reached his role in the political battlefield, he's supposed to remain entirely neutral but he phrases and delivers his 'warnings' in such a way that they're designed to be heard first and foremost.

The pace and tone of delivery is very well done I admit, but when you watch it back it's clear that the 'absolute worse case' example forecast is the one he wants everyone to focus on more than anything, that's the one with such outlandish claims it'll make the most impact and yet years on when it hasn't happened he'll simply row back on what he said with the caveat of him citing 'that was worse case'

It just feels like they're all so corrupt and self-serving

 

Incentives/Tax breaks are currently prevented by the EU's current strict rules protecting "free competition" which we fully adhere to at the moment. If you've ever tried to secure business in say Germany or France, you will invariably find interpretational barriers being put up and the local company secures the business. EU companies are trading all over the UK and especially in London as we operate on a level playing field for competitive business.
Have you not followed instances where UK based manufacturers have been given EU backing to move from the UK to Eastern EU countries; all part of their great plan. If instead our Government was able to give that manufacturer a grant for investment if they remained. Again, not presently allowed.
Apprenticeships/Vocational training - Agreed that it can be done now but recent governments have been very poor at managing them and ensuring that companies are properly supported with being able to retain staff that they have invested in. Right now there is nothing to stop the newly trained going up the road for more money. Again tax breaks etc. would assist.

 

Ponsonby on form, but its cool, she made herself perfectly clear. we are all gonna be..eh..hmm.
https://twitter.com/STVNews/status/1067868102011035653

 

Have you not followed instances where UK based manufacturers have been given EU backing to move from the UK to Eastern EU countries; all part of their great plan. If instead our Government was able to give that manufacturer a grant for investment if they remained. Again, not presently allowed.
yip, terrible init? no National Gov would offer incentives for companies and large employers to move from north to south would they?

 

Government does not have the money to give tax breaks. Its broke.

The estimates are that the Govt has less than a month's cash reserves.

HMRC is falling apart at the seams and the only people and Companies who would be able to fill their coffers much higher, do everything they possibly can to avoid doing that. And in any case they are often the ones in power and making the decisions and won't do the right thing if its going to cost them.

The reason we are in the place we are is due to the ineptitude of this and previous Governments, not the EU. To think they are suddenly going to change their spots and become the saviours of us all is taking the piss.

 

Just so we're all clear,

I am right in thinking that 'giving a tax break' doesn't mean the government actually hands over money, rather it takes less from that company than it otherwise would have done?

Phew.....I thought I was going crackers then