Brexit Dividend

[SydneyRover]

Which is why I asked you to qualify your earlier statement

''Are the brexit induced labour shortages over pud? what is a slight effect, can you put an approx figure on it''

which should be a doddle for someone with your qualifications, no?

And I guess minimal effect depends on where you are looking from ........ the breadline or ...

''As an aside, don't trust every source you read on what the cause of financial results changes actually are''

Happy to read any source you have about brexit putting downward pressure on inflation pud.



I also guess this is rewriting history from tory party HQ, 'brexit is good'

[Branton Red]

The Remain campaign warned that Brexit would be both recessionary and lead to mass job losses (neither of which have come anywhere close to coming to pass) both of which are deflationary. With higher inflation now becoming present in the economy it is ironic to see Remainers counterintuitively blaming (in part) Brexit for this. But then again: -

"What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact" Warren Buffett

This has been seen very regularly in the media since the referendum. Any negative economic story which cannot be fully attributable to something else is blamed, at least in part, on Brexit usually with no evidence to back up such an assertion.

Let's look at current inflation levels as a case in point. As Sydney's article correctly states the primary factors behind increasing prices are higher energy costs and sudden increased demand as the economy opens up and recovers from pandemic lockdowns and restrictions. All easily provable and tie into basic economic theory.

Where is the evidence that Brexit (which remember we were told indirectly would be deflationary) is a major contributing factor to increasing prices? We can easily test for this. All countries are experiencing higher energy costs and post-pandemic recoveries but Brexit is unique to the UK. If Brexit is contributing in any significant way to inflation the UK inflation rate should be higher than those of other countries.

In December CPI inflation in the UK was 4.8%; in the EU 5.3%; US 7.0%.

[SydneyRover]

Only the same if the other countries have exactly the same inflationary levers as the UK I guess.

''UK inflation jumps above 5% as BoE considers rate rise''

https://www.reuters.com/world/uk/uk-inflation-jumps-10-year-high-51-2021-12-15/

[SydneyRover]

Nothing to see here?

''Britain’s small businesses should expect trade with the EU to be “permanently damaged” from 1 January, the refrigerated supply chain trade body has said, after new customs checks take effect that it says will make imports from the bloc “more expensive, less flexible and much slower”.

Amid growing public dismay at the negative impact of Brexit, the Cold Chain Federation said speciality food imports could face the same 70% decline that affected exports of food by small businesses this year after Britain quit the EU single market and customs union''

''Extra costs that amount to £300 to £400 for each consignment will mean sales of food to EU countries in small batches could become uneconomic, said the CCF, which lobbies on behalf of firms that transport frozen and chilled goods''

https://www.theguardian.com/politics/2022/jan/01/new-year-brexit-changes-permanently-damage-eu-trade-says-food-body

Granted not all small business were reliant on the EU but around 99% of business in the UK are small businesses.

And I don't see any efficiency offsets here.

[Branton Red]

Only the same if the other countries have exactly the same inflationary levers as the UK I guess.

''UK inflation jumps above 5% as BoE considers rate rise''

https://www.reuters.com/world/uk/uk-inflation-jumps-10-year-high-51-2021-12-15/

"If"; you "guess"?? Yet you seemed so certain earlier in the thread that Brexit was a major contributory factor to rising inflation.

This is an important question as inflation (and the resulting falls in real wages and therefore living standards) appears to be the major economic problem facing the UK and much of the rest of the world currently so we need to gain a solid understanding of its causes.

I've given you a logical argument with data to back up my point showing that almost certainly Brexit is not significantly contributing to rising prices. Do you agree with my analysis?

If not can you provide a logical data-backed argument to the contrary? Or as I strongly suspect are you someone under the spell of something psychologists call 'Confirmation Bias' on this subject matter?

[SydneyRover]

Branton, just a couple of points, you used a quote from Buffet unrelated to brexit whereas you could have used a quote from him about brexit where he said that Britons probably made a mistake, he was being polite. Also I don't remember typing that Brexit was a major or any other degree of inflation but you could correct me if you find it. If you type Brexit into the search box for off topic you will find an amazing array consisting of thousands of comments and debate on various thread so please if you are thinking this hasn't been discussed or you have found a new angle you'd be wrong. If you read them all you will not find a single one that shows any benefit to the UK from brexit, lots of vague claims about sovereignty, most didn't know what they were voting for or if they thought they did they were wrong. My reply originally was to pud, but I think one would be an idiot to think that brexit has not had some effect on inflation. What would the inflation figure be if we had not had brexit, better or worse would you think.

As for inflation caused by brexit, let's take the politics out of the debate and view it as a commercial venture, there is a company sales meeting and the team are gathered and are invited to make suggestions how to grow the business. Person 1 ventures that they should for no particular reason ditch the largest, wealthiest customer and then resign an agreement where the company has to pay increased cost and time to get goods to that same customer, without and before any other business deals are arranged with other customers.

Do you .......

A/ Promote that person

B/ Award them sales rep of the decade medal

C/ talk to HR about finding a replacement

Less sales for a company with the same overheads means higher costs.

Edit

Just to clarify I don't mean yourself when I refer to 'idiot' and should have said 'anyone'

[BigH]

Not through a 'light bulb' moment more enlightenment on a very slow acting dimmer switch but the majority of the population have come to the conclusion that this was all a fuss over nothing. The divisiveness, the arguments, the falling outs, the nastiness - none of it was worth a hill of beans.

We've had Brexit but we have not had as a result: a recession; any discernible increase in unemployment; any mass abandonment of the country by big companies; and we did get a comprehensive free trade deal with the EU.

Yes there was a substantial fall in investment and the stock market (a bas**rd if you happened to be retiring on an annuity back in 2016) in the 6 months immediately after the vote, but this was due to sentiment - a reaction to the remorseless negativity of the Remain campaign and it's high profile backers not the fundamental nature of Brexit itself, both have since rebounded.

Yet we have regained sovereignty and our individual and collective democratic rights over a wide range of issues which is fundamentally what Brexit was about.

You'd have to go a long way to find a rational, independently-minded person in favour of us rejoining the EU. Probably sadly to Westminster and those politicians and civil servants who've found the implementation of their political agendas and/or political ambitions cut short by Brexit.

Sorry Branton but I have to take issue with your suggestion that Brexit has turned out to be a fuss about nothing.

1. As a nation we are economically worse off; estimated at c 4% of GDP. Why, because our exports to the EU (particularly food) have plummeted. So what? Well it means that taxes will have to rise to bridge the gap or we'll face yet more cuts; in defence, NHS, schooling, transport, infrastructure etc. Reclaiming 'sovereignty' - whatever that means - won't pay the bills
2. We now have a recurrence of the political problem in N Ireland
3. We now have a divided Union
4. We now have an undermined democracy, with an electorate that's lost trust in governmental ability to act with trust and integrity in the interests of its people

I might be talking utter rot but here's the view of a guy who was a cabinet minister in May's government (so hardly a Corbynite lefty):

https://www.newstatesman.com/politics/conservatives/2022/01/david-gauke-how-my-party-lost-its-way

And we still don't have proper light bulbs...

[big fat yorkshire pudding]

Which is why I asked you to qualify your earlier statement

''Are the brexit induced labour shortages over pud? what is a slight effect, can you put an approx figure on it''

which should be a doddle for someone with your qualifications, no?

And I guess minimal effect depends on where you are looking from ........ the breadline or ...

''As an aside, don't trust every source you read on what the cause of financial results changes actually are''

Happy to read any source you have about brexit putting downward pressure on inflation pud.



I also guess this is rewriting history from tory party HQ, 'brexit is good'

Yep but it won't always be exact.  A cause and effect is not always exact.  Eg what impact does brexit have on energy prices? Nothing.  What does it have on shipping costs? None.  Are they some of the biggest pulls on inflation? Quite clearly.

Take a look at the other big pulls, fuel prices, second hand cars (international semi conductor related), UK tax rises.

Also worth noting inflation by country/area.  UK 5.4%, Germany 5.3%, USA 7%.  But yes brexit.....

[Glyn_Wigley]

Which is why I asked you to qualify your earlier statement

''Are the brexit induced labour shortages over pud? what is a slight effect, can you put an approx figure on it''

which should be a doddle for someone with your qualifications, no?

And I guess minimal effect depends on where you are looking from ........ the breadline or ...

''As an aside, don't trust every source you read on what the cause of financial results changes actually are''

Happy to read any source you have about brexit putting downward pressure on inflation pud.



I also guess this is rewriting history from tory party HQ, 'brexit is good'

Yep but it won't always be exact.  A cause and effect is not always exact.  Eg what impact does brexit have on energy prices? Nothing.  What does it have on shipping costs? None.  Are they some of the biggest pulls on inflation? Quite clearly.

Take a look at the other big pulls, fuel prices, second hand cars (international semi conductor related), UK tax rises.

Also worth noting inflation by country/area.  UK 5.4%, Germany 5.3%, USA 7%.  But yes brexit.....

Oh yes it does, quite a lot when trading with the EU.

[BillyStubbsTears]

I'm guessing the 9km lorry queue on the M20 on Thursday morning might have added to shipping costs.

https://mobile.twitter.com/vivamjm/status/1484206511547105280?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1484206511547105280%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fd-3092653080828281772.ampproject.net%2F2201071715000%2Fframe.html

Still. Blue passports.

[foxbat]

luckily I still have a few years on my passport before I get stuck with a poxy Brexit Britain one.

[Branton Red]

Sydney with respect for the time you've taken to respond I'm not interested in being drawn into an argument to a question from 5.5 years ago which has been settled by the electorate through due democratic process.

The thread is about the "Brexit dividend" i.e. what impact Brexit has/has not had. You copied and pasted part of an article into a thread on Brexit which states Brexit is a key influence in rising inflation. You even highlighted the relevant passage. So it's a bit disingenuous of you to state this isn't your own opinion when challenged.

Do you think Brexit is contributing to rising inflation? If so 1) Where is my analysis to the contrary so wrong? And 2) Can you give a logical, data informed argument for this? Happy to answer your questions once you answer mine.

PS Less sales for a company with the same overheads means lower profits not higher costs. 

[Branton Red]

Hi Big H. Thanks for the response. I agree with you on the light bulbs. If you want to start a petition let me know and I'll countersign.

I note you don't disagree with me that Brexit hasn't caused: a recession; mass unemployment; abandonment of the country by big business' etc. I'll just talk around your first point for now as it directly answers my post.

My own estimate is that at 1/1/20 i.e. pre-Covid the economy was c. 2% smaller than it would have been without Brexit. I'd be interested to know where your 4% comes from but both intuitively and based on my own calculations it appears an overestimate.

My calculation is based on estimating what UK economic growth would have been based on the growth rate of other similar nations. The level of difference reduces post vote till 2019 where our growth rate is at a similar level to our EU neighbours.

Therefore my own view is the majority of this 2% is down to the large-scale drop off in investment late 2016/early 2017. Which as I said earlier again IMO was due to sentiment given the strongly negative Remain campaign and not inherently due to Brexit itself. Investment decision makers may be experts in their fields but most aren't macro-economic experts - would you buy shares in a company if it's Chairman, CEO, FD etc etc had previously vehemently warned if a certain event happened the company would be heading for disaster immediately after that event actually did happen??

A 2% reduction isn't good but compared to Covid, the 2008 banking crisis and most recessions it is relatively benign. Of course 2% is an average so some people/business' would have been impacted a lot but most hardly at all hence my assertion that "the majority of the population have come to the conclusion that this was all a fuss over nothing" holds though I take your point on tax take.

[SydneyRover]

Higher relative costs Branton, apologies.

[SydneyRover]

Not through a 'light bulb' moment more enlightenment on a very slow acting dimmer switch but the majority of the population have come to the conclusion that this was all a fuss over nothing. The divisiveness, the arguments, the falling outs, the nastiness - none of it was worth a hill of beans.

We've had Brexit but we have not had as a result: a recession; any discernible increase in unemployment; any mass abandonment of the country by big companies; and we did get a comprehensive free trade deal with the EU.

Yes there was a substantial fall in investment and the stock market (a bas**rd if you happened to be retiring on an annuity back in 2016) in the 6 months immediately after the vote, but this was due to sentiment - a reaction to the remorseless negativity of the Remain campaign and it's high profile backers not the fundamental nature of Brexit itself, both have since rebounded.

Yet we have regained sovereignty and our individual and collective democratic rights over a wide range of issues which is fundamentally what Brexit was about.

You'd have to go a long way to find a rational, independently-minded person in favour of us rejoining the EU. Probably sadly to Westminster and those politicians and civil servants who've found the implementation of their political agendas and/or political ambitions cut short by Brexit.

Sorry Branton but I have to take issue with your suggestion that Brexit has turned out to be a fuss about nothing.

1. As a nation we are economically worse off; estimated at c 4% of GDP. Why, because our exports to the EU (particularly food) have plummeted. So what? Well it means that taxes will have to rise to bridge the gap or we'll face yet more cuts; in defence, NHS, schooling, transport, infrastructure etc. Reclaiming 'sovereignty' - whatever that means - won't pay the bills
2. We now have a recurrence of the political problem in N Ireland
3. We now have a divided Union
4. We now have an undermined democracy, with an electorate that's lost trust in governmental ability to act with trust and integrity in the interests of its people

I might be talking utter rot but here's the view of a guy who was a cabinet minister in May's government (so hardly a Corbynite lefty):

https://www.newstatesman.com/politics/conservatives/2022/01/david-gauke-how-my-party-lost-its-way

And we still don't have proper light bulbs...

If costs to do business rise, costs of products rise = inflation and I didn't finish my economics degree ...... well I didn't start one to be honest.

[BillyStubbsTears]

Branton.

I'm interested in what numbers you base your 2% contraction of the economy on.

[BigH]

Branton, my numbers come from the OBR:

https://obr.uk/forecasts-in-depth/the-economy-forecast/brexit-analysis/#assumptions

I agree that there hasn't been a cliff-edge descent into the apocalypse. More a case of gradual descent into the wilderness perhaps?

Incidentally, the OBR reckon that Covid will hit GDP by 2%. The financial crisis in 2008 saw GDP hit by 6% (according to the Bank of England). So the Brexit 'hit' is expected to be somewhere between Covid and the 2008 financial crisis.

[big fat yorkshire pudding]

Which is why I asked you to qualify your earlier statement

''Are the brexit induced labour shortages over pud? what is a slight effect, can you put an approx figure on it''

which should be a doddle for someone with your qualifications, no?

And I guess minimal effect depends on where you are looking from ........ the breadline or ...

''As an aside, don't trust every source you read on what the cause of financial results changes actually are''

Happy to read any source you have about brexit putting downward pressure on inflation pud.



I also guess this is rewriting history from tory party HQ, 'brexit is good'

Yep but it won't always be exact.  A cause and effect is not always exact.  Eg what impact does brexit have on energy prices? Nothing.  What does it have on shipping costs? None.  Are they some of the biggest pulls on inflation? Quite clearly.

Take a look at the other big pulls, fuel prices, second hand cars (international semi conductor related), UK tax rises.

Also worth noting inflation by country/area.  UK 5.4%, Germany 5.3%, USA 7%.  But yes brexit.....

Oh yes it does, quite a lot when trading with the EU.

Of course remainders would have us believe nobody wants to trade with us anymore.

No doubt there is a marginal effect but as I said in the scale of everything else on inflation it's not significant or long in terms of time.

Worth noting my point on energy prices a good tweet showing costs in Europe here.  But yes, brexit.  (Be cautious of the currencies here).

https://twitter.com/JavierBlas/status/1485588848801370114?t=eTxAKhaW3EVAo7tm0xaa9w&s=19

[Glyn_Wigley]

Which is why I asked you to qualify your earlier statement

''Are the brexit induced labour shortages over pud? what is a slight effect, can you put an approx figure on it''

which should be a doddle for someone with your qualifications, no?

And I guess minimal effect depends on where you are looking from ........ the breadline or ...

''As an aside, don't trust every source you read on what the cause of financial results changes actually are''

Happy to read any source you have about brexit putting downward pressure on inflation pud.



I also guess this is rewriting history from tory party HQ, 'brexit is good'

Yep but it won't always be exact.  A cause and effect is not always exact.  Eg what impact does brexit have on energy prices? Nothing.  What does it have on shipping costs? None.  Are they some of the biggest pulls on inflation? Quite clearly.

Take a look at the other big pulls, fuel prices, second hand cars (international semi conductor related), UK tax rises.

Also worth noting inflation by country/area.  UK 5.4%, Germany 5.3%, USA 7%.  But yes brexit.....

Oh yes it does, quite a lot when trading with the EU.

Of course remainders would have us believe nobody wants to trade with us anymore.

No doubt there is a marginal effect but as I said in the scale of everything else on inflation it's not significant or long in terms of time.

Worth noting my point on energy prices a good tweet showing costs in Europe here.  But yes, brexit.  (Be cautious of the currencies here).

https://twitter.com/JavierBlas/status/1485588848801370114?t=eTxAKhaW3EVAo7tm0xaa9w&s=19

You really ought to go back - even to before the referendum - and read what I've been telling people in this forum what shipping costs would increase after Brexit, and they have. And they certainly ain't short term, they're permanent, unless we rejoin the Single Market.

[selby]

Shipping costs have gone up to every country in the world Glyn, come off it< and we should make any difference with the EU as small as possible by cutting trade with them as much as possible and replacing it with trade from the rest of the world.
 Let them have as many food and wine mountains as they can.

[Glyn_Wigley]

Shipping costs have gone up to every country in the world Glyn, come off it&lt; and we should make any difference with the EU as small as possible by cutting trade with them as much as possible and replacing it with trade from the rest of the world.
 Let them have as many food and wine mountains as they can.

Has every other country in the world re-imposed Customs, paperwork and admin costs on themselves for every consignment to and from the EU the way we have with Brexit? No, so shipping costs haven't gone up in every country in the world the way they have for us.

As for swapping EU trade for more trade with the rest of the world, we had all those extra shipping costs with the rest of the world all the time we were in the EU and we still have them - so we wouldn't gain anything by replacing EU trade with non-EU trade.

And you tell ME to 'come off it'? What would you say if you actually knew what you were talking about?

[BillyStubbsTears]

Shipping costs have gone up to every country in the world Glyn, come off it&lt; and we should make any difference with the EU as small as possible by cutting trade with them as much as possible and replacing it with trade from the rest of the world.
 Let them have as many food and wine mountains as they can.

Yeah.

Because the basic shipping costs from Chile and New Zealand will be lower that those from France won't they?

I do wonder how some people manage to wipe their arses without help.

[Glyn_Wigley]

Shipping costs have gone up to every country in the world Glyn, come off it&amp;lt; and we should make any difference with the EU as small as possible by cutting trade with them as much as possible and replacing it with trade from the rest of the world.
 Let them have as many food and wine mountains as they can.

Yeah.

Because the basic shipping costs from Chile and New Zealand will be lower that those from France won't they?

I do wonder how some people manage to wipe their arses without help.

Not forgetting we threw away the EU Preference Deal we had with Chile too..!

[selby]

  They just get arse lickers Billy. There are lots in politics left and right.
  Mixing with the high and mighty you know a few surely.

[big fat yorkshire pudding]

Shipping costs have gone up to every country in the world Glyn, come off it&amp;lt; and we should make any difference with the EU as small as possible by cutting trade with them as much as possible and replacing it with trade from the rest of the world.
 Let them have as many food and wine mountains as they can.

Yeah.

Because the basic shipping costs from Chile and New Zealand will be lower that those from France won't they?

I do wonder how some people manage to wipe their arses without help.

Think bigger picture and this applies to Glyn aswell.  Lots of things are cheaper to obtain from those countries thus negating that higher freight cost as I'm sure you are aware.  If you import from Asia etc you'll know how much that cost has increased all around the world albeit that will and can depend how long your contracts are tied up (I've worked in business with 10 year+ shipping forward contracts).

In some cases it's actually made the UK and EU more competitive to UK business though where that price has increased.  My experience (and it's only mine so is limited to where I work) is that the brexit impact on imports and exports is very minimal to none, but I expect in smaller businesses than that which I work within will find that tougher.  A colleague of mine was delighted that they are filing a piece of information for the last time as now post brexit it won't be required after this period.  That is the case in some ways.

[drfchound]

So not just one hard and fast rule for everyone then  bfyp.

[SydneyRover]

And 99% of UK businesses were classed as small, last time I looked pud.

''Of course remainders would have us believe nobody wants to trade with us anymore''

Do they pud, where so you get your lines from?

[Glyn_Wigley]

Shipping costs have gone up to every country in the world Glyn, come off it&amp;amp;lt; and we should make any difference with the EU as small as possible by cutting trade with them as much as possible and replacing it with trade from the rest of the world.
 Let them have as many food and wine mountains as they can.

Yeah.

Because the basic shipping costs from Chile and New Zealand will be lower that those from France won't they?

I do wonder how some people manage to wipe their arses without help.

Think bigger picture and this applies to Glyn aswell.  Lots of things are cheaper to obtain from those countries thus negating that higher freight cost as I'm sure you are aware.  If you import from Asia etc you'll know how much that cost has increased all around the world albeit that will and can depend how long your contracts are tied up (I've worked in business with 10 year+ shipping forward contracts).

In some cases it's actually made the UK and EU more competitive to UK business though where that price has increased.  My experience (and it's only mine so is limited to where I work) is that the brexit impact on imports and exports is very minimal to none, but I expect in smaller businesses than that which I work within will find that tougher.  A colleague of mine was delighted that they are filing a piece of information for the last time as now post brexit it won't be required after this period.  That is the case in some ways.

If things were cheaper to buy elsewhere people would already have been buying them since before Brexit.

[drfchound]

Serious question Glyn, would the EU have allowed us to buy certain things from other countries while we were members?

[Glyn_Wigley]

Serious question Glyn, would the EU have allowed us to buy certain things from other countries while we were members?

Such as?