Brexit, the economy and house prices part 5

Zero_Gravitas

Interesting article from the Guardian:

https://www.theguardian.com/commentisfree/2018/jun/05/march-brexiters-afraid-remain-peoples-will-vote

Which will no doubt cause an outbreak of red-faced gammoning amongst the usual suspects. However, as an empirical measure of how right the article is, I’ve certainly noticed an increasingly hysterical trend amongst the brexiteers here as they start to realise that they are really not going to get the Brexit they want (or at all)...

Arklight

Zero_Gravitas wrote: »

Interesting article from the Guardian:

https://www.theguardian.com/commentisfree/2018/jun/05/march-brexiters-afraid-remain-peoples-will-vote

Which will no doubt cause an outbreak of red-faced gammoning amongst the usual suspects. However, as an empirical measure of how right the article is, I’ve certainly noticed an increasingly hysterical trend amongst the brexiteers here as they start to realise that they are really not going to get the Brexit they want (or at all)...

It's funny watching a bunch of extremists losing the plot as it sinks in that a narrow win in an advisory referendum that only asked one question about a political organisation, isn't going to lead to the Fourth Reich.

Thrugelmir

Filo25 wrote: »

You think it's likely a "no deal" scenario gets through Parliament?

And then what? In limbo isn't a clever place to be.

Rinoa

Remember a week or two back, when HMRC confirmed Max Fac would cost British Business £20Bn per year.....

When the head of HMRC said recently to a Commons committee that the bill to British business for customs (forms etc) would post-Brexit be up to £20bn a year, it was a huge story. The FT gave it big licks, for example. When the number appeared it was a stunning moment. It appeared, I thought so, to all but kill the Max Fac customs option favoured by the Brexiteers and disliked by Number 10 Now, it turns out that the number was wrong and surprisingly little attention has been paid.
This week, Jon Thomson of HMRC clarified the sums.
!!!8206;
The Tory MP Simon Clarke published a clear account of the methodology on Brexit Central this week.

Clarke writes:
!!!8220;The £20 billion figure includes the estimated cost of customs declarations for both UK businesses and EU businesses. This, apparently, was not made clear at the original evidence session as many media outlets implied !!!8211; or at least failed to make clear !!!8211; that this figure was not an accurate account of the cost solely to UK businesses. Indeed, once we discount the cost to EU businesses (something which is a problem for the EU, not us) then a whopping £6.5 billion is immediately struck off the total figure.!!!8221;
Tumbleweed!!!8230;
Now it is clear one large number was miles out, might we ask if the other numbers cited by HMRC and anti-Brexit forces are reliable? Indeed, is the estimate there out by as much as £18bn, as the highly-respected economist Graham Gudgin put it last week?

That £20bn figure helped drive the debate. It shocked business, analysts and politicians. It was wrong. By more than £350m a week!!!8230;

https://reaction.life/hmrc-admits-double-counting-20bn-customs-warning/

HAMISH_MCTAVISH

Rinoa wrote: »

Remember a week or two back, when HMRC confirmed Max Fac would cost British Business £20Bn per year.....

Regardless if the bill to British business is £14 billion or £20 billion, the additional costs of EU businesses doing business into the UK will be passed on to their UK customers anyway....

Graham_Devon

HAMISH_MCTAVISH wrote: »

Regardless if the bill to British business is £14 billion or £20 billion, the additional costs of EU businesses doing business into the UK will be passed on to their UK customers anyway....

Can you explain why that doesn't happen when you look at VW in America then?

There are additional costs there. Yet they pay less, for more when it comes to VW vehicles.

Passat S UK = £22,195
Passat S US = $22,995 (£17,166)

They also get a higher specification S model (for instance, they get active return steering in the base model). Plus double the warranty length.

Going on your statement, they should be paying, what, $32,000 - 34000 for the same thing?

Herzlos

Car pricing is a very difficult one to make sense of.

Take a widget, for doing a thing. Made in the EU and sold in a shop in the UK. The EU company will have paid for the new paperwork and factored it into the price. Ergo the cost is passed on to the UK consumer so the counting is valid.

Some might take the hit personally but most will just pass it on.

Graham_Devon

Herzlos wrote: »

Car pricing is a very difficult one to make sense of.

Take a widget, for doing a thing. Made in the EU and sold in a shop in the UK. The EU company will have paid for the new paperwork and factored it into the price. Ergo the cost is passed on to the UK consumer so the counting is valid.

Some might take the hit personally but most will just pass it on.

OK, we won't look at cars then, lets ignore that inconvinience and lets, instead, look at Ikea furniture.

Same Wardrobe....

UK, £180: https://www.ikea.com/gb/en/products/wardrobes/free-standing-wardrobes/songesand-wardrobe-white-art-90347351/

US, $199 (£149): https://www.ikea.com/us/en/catalog/products/10394558/

So the US customer gets the product from a company based in the EU, £39 cheaper than we do.

BUT, were told constantly that we will have to pay MORE if we leave the EU due to import costs, admin costs, trading costs.

That's 2 examples where the USA pay around 25% less than we do on two products imported from the EU.

I can give many more, but it would get boring.

This is all outright fact - it's not heresay based on fear. These are true, live prices, today. Perhaps those who seem to know so much about trade costs when we leave and how everythign will become more expensive could give a little insight?

Hell, it's cheaper to buy the wardrobe in America than it is in Euro's from Ikea in Germany.

Filo25

Graham_Devon wrote: »

OK, we won't look at cars then, lets ignore that inconvinience and lets, instead, look at Ikea furniture.

Same Wardrobe....

UK, £180: https://www.ikea.com/gb/en/products/wardrobes/free-standing-wardrobes/songesand-wardrobe-white-art-90347351/

US, $199 (£149): https://www.ikea.com/us/en/catalog/products/10394558/

So the US customer gets the product from a company based in the EU, £39 cheaper than we do.

BUT, were told constantly that we will have to pay MORE if we leave the EU due to import costs, admin costs, trading costs.

That's 2 examples where the USA pay around 25% less than we do on two products imported from the EU.

I can give many more, but it would get boring.

This is all outright fact - it's not heresay based on fear. These are true, live prices, today. Perhaps those who seem to know so much about trade costs when we leave and how everythign will become more expensive could give a little insight?

Hell, it's cheaper to buy the wardrobe in America than it is in Euro's from Ikea in Germany.

I won't claim to be an expert on the retail markets by any means and the US generally seems cheaper in most retail areas irrespective of where the goods are from, although there are some notable exceptions, but 2 points to note.

US prices generally don't include sales tax, take out the 20% VAT in the UK price and the prices are comparable.

Ikea furniture isn't manufactured in Europe as far as I know, it is manufactured in Asia.

Graham_Devon

Filo25 wrote: »

I won't claim to be an expert on the retail markets by any means and the US generally seems cheaper in most retail areas irrespective of where the goods are from, although there are some notable exceptions, but 2 points to note.

US prices generally don't include sales tax, take out the 20% VAT in the UK price and the prices are comparable.

Ikea furniture isn't manufactured in Europe as far as I know, it is manufactured in Asia.

The highest sales tax in the the US states is 9.5%. Some states don't charge any sales tax at all.

If we strip out VAT, then it comes to £144. Comparable to the US. But as we cannot avoid VAT, and it is an EU law, it's useful to compare prices, sure, but again, shows how, as we are in the EU, we pay more than those across the water for the same product.

Not suggesting at all here that if we came out of the EU, we wouldn't pay a sales tax. But at the moment we cannot reduce VAT any lower than 17%.

The overarching point here though is to make the point that all this stuff about things costing us more due to costs of trading with the UK isn't all it seems to be. It appears to be yet more scaremongering.... we have a world of information at our fingertips to show, factually, it's not neccesarily the case that things will cost us more. And with the ability to change out taxes, it could (and I say that in a technical way as I don't believe it would happen) cost us less to buy the same item as it does now.