Brexit, the economy and house prices part 5

spadoosh

gfplux wrote: »

You ask a question you dont know the answer to. I did not avoid an answer, I just thought you were being silly.
I do not know the answer except that Poland is easy to get to, is on almost the same time zone. Perhaps the company already have an operation there.
If you had ever ever been in business you would understand people do not often jump into the dark. They go with the familiar, the local, the easy.
I just dont know but it always comes down to the path of least resistance.
Frankly having in my career imported product from Europe and the Far East, closer and local wins every time unless the market dictates otherwise.

I reckon i could give a few answers in which the correct answer would be probably be one of them.

It now seems like theres other motives than purely cost then?

Im not sure in what context you want me to have been 'in business'. My entire education and work is related to business. From GCSE business to certificates in financial studies, to AS and A levels in economics, accounting, business studies and further with a BSc in accounting. To be fair my job doesnt entail international trade.

So closer and local wins every time accept for cost and moving to poland but not stretching as far as being even cheaper and moving to china?

It seems somewhat contradictory, again. Id imagine the jobs are moving to poland because they can get the exact same thing at the same price, as you point out it might not be the same with China. Ok, i do understand that. If you can get the same for cheaper, you should. That suggests that either poland has caught up to the same standard or the uk has dropped or not moved as quick, or some mix of the two.

So theres some other factors at play... Id imagine the cost of living in the uk is substantially higher, therefore requiring staff to need a higher wage. Id also imagine the standard of living is higher. Things like welfare, schooling and healthcare are all superior in the UK than poland. All of which doesnt really effect a company, not directly anyway.

So what am i actually getting at? Well we need to be able to compete. All of our jobs would forever be going to poland and other eastern European countries as we cant compete. We could bear the cost of education and to some extent welfare (offering the better) and then someone can move to poland and enjoy the benefit of lower costs of living (having a cake and eating it) this works on a company level too. Can you not see how this is a race to the bottom?

I do understand poland has vastly improved it educational system, exceeding the uk. But im sure youll agree theres a difference between a degree from Cambridge v Warsaw university.

So what happens when is starts costing the IT company the same as it was when it decided to move out of the UK? It normally inevitably does, if a country is making huge progress catching up, levelling and then surpassing the compared company?

Do we start going the protectionist route, then why hasnt the EU done that with the jobs leaving an eu country? Why was my friends family business sent under because it couldnt compete with italian tomato growers and the subsidies they receive? Its exactly the same as why has the EU allowed a UK IT company to move to poland at the expense of the UK, whilst subsidising massively the improvements that have led to Poland being in a situation to be able to compete on jobs. Ive got to pay more to protect jobs in italy but it doesnt make sense as mayonnaise says to do the same for UK jobs.

So we have to pay to make the worse off (financially) countries at a closer level (EU membership). Then we have to lose out because theyre more competive being cheaper (moving business and jobs). But then we cant use the most competititve countries because we need to protect EU jobs. I really cant get past that being a shockingly bad deal, convert me.

GreatApe

ilovehouses wrote: »

No way will VAT double anyway but telling people that to stand still they need to trade a Focus for a Fiesta isn't going to wash.

Yes the economy will adjust but what's the point if everyone has to trade down?

I don't think it will come to this I think the Germans will realise that the big net goods importer down the road who buys expensive shiny things simply couldn't afford to be a big net goods importer without being a net service exporter.

If they hit our services we will just import less higher end (German) manufactured goods. It won't be the end of the world going from BMWs to Fords or iphone to Nokia.

As I keep saying the positive or negatives will likely be minor. We will likely get a deal close to what we already have. If I was to guess we would be about 1% better off out.

If we don't get a good trade deal we will be hit for a year or two as the economy adjusts but adjust it will. The Germans would also be hit. If we are to export less services they will have to export less goods.

Like I said even without this brexit issue I would be tempted to have a much higher VAT on manufactured goods with perhaps a lower or even zero VAT on foods. Would boost the domestic economy.

spadoosh

gfplux wrote: »

Just so you know. Before the EU were involved all National procurement was heavily protected.
A British Company found it impossible to qualify as an approved bidder for example for filing cabinets for the French ministry of culture.
Making this an easy open bidding process has been hugely profitable to many British companys

It becomes clearer every day that so many people had no idea how many British business opportunities were created by the EU membership.

And theres my mates family tomato growing business that shut down as a direct result of the EU.

And the aforementioned IT company who will for all intents and purposes (mainly tax purposes) become Polish as a direct result of the EU.

You rejoicing in all theses companies and jobs leaving the UK is a direct result of EU membership. And this isnt a since brexit thing, this has happened for the last few decades. We cant compete against someone who is protected when we arent afforded the same privileges.

Its becoming clearer and clearer your blind to the hypocrisy of the EU.

GreatApe

What remains of Manufacturing is going to be killed by software it is going to go the way of agriculture economically insignificant and insignificant in the number of jobs in the sector.

Already for GDP manufacturing is 16% and falling.

Even that figure is misleading because it includes processed foods. Most people think cara or machines but the largest sector of manufacturing is foods like factories that make sandwiches or loafs of bread or your morning cereal.

Tromking

Its my perception that the UK consumer is notoriously non-parochial in their consumer choices, in the event of a crash out I would expect that to change. More expensive imports and the need to protect our own industry will change the mindset.

buglawton

spadoosh wrote: »

Your still avoiding my question about why the IT jobs arent being sent to China where it is cheaper over poland?

They go to India because of the widespread adoption of English. That's unlike China. Also China's fast changing economy consumes all local IT services at it is.

Herzlos

spadoosh wrote: »

Your still avoiding my question about why the IT jobs arent being sent to China where it is cheaper over poland?

Cultural and time differences make working with China hard. Not an issue if buying widgets but pretty terminal for IT.

cogito

ilovehouses wrote: »

The lack of sunlight and warmth in the UK makes for high cost production - it's energy hungry and yields are lower. Those that make a go of it are producing 'premium' tomatoes and are located near places like British Sugar where there's waste heat to be used.

It's easy to blame to the EU but your mate probably went bust because he either ran out of cash or his customers couldn't be persuaded to pay the required price premium. Ask him - I suspect it's pretty mundane.

So glad you mentioned British Sugar, a company that had 18 factories in 1980 but now has only four thanks to the EU reducing sugar quotas. It is easy to blame the EU, isn't it?

Rough_Justice

Vince Cable has been caught out in an untruth, this one for trying to suggest that eight EU prime ministers were backing his call for a second Brexit referendum.
What a surprise that is, from a remainer.
https://www.scotsman.com/news/vince-cable-humiliated-as-eu-leaders-disown-call-for-new-brexit-vote-1-4710952

Rough_Justice

Herzlos wrote: »

Cultural and time differences make working with China hard. Not an issue if buying widgets but pretty terminal for IT.

What utter carp!
Cultural and time differences have not affected India's rise in IT, has it?
The time difference between China & India isn't exactly huge either.