Brexit the economy and house prices part 6

Filo25

ukcarper wrote: »

True but it's far from a forgone conclusion that remain would win and a close result either way would only make things worse.

I've certainly never said Remain would be a surefire winner, but I think it would be a favourite if the government can't come up with anything better than No Deal as an option.

ukcarper

Filo25 wrote: »

I've certainly never said Remain would be a surefire winner, but I think it would be a favourite if the government can't come up with anything better than No Deal as an option.

I certainly wouldn't bet one way or the other. Still let's hope common sense prevails on both sides and we get a deal let's face it it's in both sides interest.

Backbiter

Some interesting stats in this piece. It's a shame they wouldn't fit on the side of a bus:

Does the UK get value for money from the EU?

"We pay in more than we get back" cry the Brexiteers...

"the UK could lose one hundred billion pounds from the economy and a million unemployed" replies the CBI.

So lets take a look at the FACTs

2/ CASH IN AND CASH OUT
According to Page 40 of Her Majesties Treasury report at December 2015 entitled “European Union Finances 2015”, the UKs contribution to the European Union (our ‘membership fee’) that Brexiteers tell us we could *save* and spend on building new hospitals, schools and the like is £12.36 billion in 2015. *This figure is calculated as a percentage of Gross National Income, or GNI.

The United Kingdom received an ‘instant rebate’ of £4.86 billion. (not sent to the EU)
This is calculated before we make any payment at all which means that the cash amount that we sent to Brussels last year (2015, before the referendum) was just £7.5 billion. To put this in perspective, the Department for Communities and Local Government statistical dataset of December 3rd 2015, there are 27.4 million households in the UK.

The UK cash contribution therefore is £273 per household per year, or using an average of 2.34 people per household (DCLG figures) £116.97 per person.

So starting with £7.5 billion, lets look at some of what we get back:

UK Farmers receive direct payments of just under £4 billion through the Common Agricultural Policy and Agriculture funding.

The European Social Fund which support charities across the UK with a variety of grants, and the UK Cohesion Fund that funds various infrastructure developments in the UK contribute around £1.96 billion (total of £11.8bn between 2014 and 2020).

And a further £108 million is paid back to the UK in grants towards a number of other projects.
So from the £7.5bn we pay, we get back around £6bn in direct cash payments, leaving a net cash difference of £1.5 billion per year.

EU MEMBERSHIP EFFECT ON UK GDP
Of course, as EU members we are able to access the European Single Market which means we are able to sell unlimited products, and services made in the UK totally free of tariffs and duties.
This means that the UK can import parts and raw materials relatively cheaply keep cost of production low and it also means that UK made goods are competitively priced in the largest bloc of customers on the planet.
Combined, this makes the UK a great destination for UK and foreign manufacturers to invest and create British jobs, and help build the UK economy. Without this unlimited free trade, it is guaranteed that investment in the UK economy would slow down.
I’ve looked at some of the contributors to UK GDP. I have made some assumptions that you should be aware of: Firstly, the figures here are not the TOTAL contribution to the UK economy of each sector, but I have pared it back substantially and am only including the portion
of GDP that is related to our EU membership. For example, it is likely that cars will still be made in the UK, but not as many as today if we leave.
Automotive sector: The Society of Motor Manufacturers and Traders (SMMT) and KPMG carried out extensive analysis of the UKs automotive sector. Their conclusions from the final report entitled “An economic assessment of the UKs automotive industry with the European Union” are that over 700,000 people in Britain are employed in the automotive sector, and the total contribution to the UK economy is in excess of £60 billion in 2013/14. One example is Nissan in Sunderland who build 500,000 cars per year only sell 19% of their production in the UK.
For the contribution to the UK economy from the EU, I’ve deducted just 40% from the total GDP contribution here:

The UK automotive sector makes cars in the UK for the EU £36.3 billion per year.
According to the Association of British Travel Agents (ABTA) report in conjunction with Deloittes, inward travel on business from other EU countries £0.95bn per year. (not tourists, just business).
The UK Agri-Food sector employs over 3.5 million people in the UK and contributes over £103 billion in GVA to the UK economy in 2013. Of this a significant proportion is exported all around the globe – I have used a figure here of £70.15bn per year.
TheCityUK report “A practitioners guide to Brexit: exploring its consequences and alternatives to EU membership suggests that the UK financial and related services sector employs 2.2m people in the UK and of a total GDP contribution to UK GDP of £66bn in 2014/15.
Exports to other EU countries from this sector were far in excess of the £19.7bn per year figure I am using.

Just between those 4 sectors UK GDP is enhanced by £127.1 billion each year.
Remembering that our net cash contribution to the EU was just £1.5 billion, and the UK economy benefits from just those four sectors by £127.1 billion, you would think that was already a pretty good deal eh?

However, the benefits continue...
FOREIGN DIRECT INVESTMENT
As a result of the UKs membership of the EU, we hold over one trillion pounds of money in UK bank deposits from the other 27 EU countries – it is impossible to think that they would leave all that here if we vote to Leave.
Lets assume that we lost just 17% of that figure – that would be a loss of £170 billion out of the UK banking sector (around half the amount that UK Government bailed out the banks back in 2009).
By 2014, the UK received £1,065 billion of foreign investment into the UK economy from countries all around the world. A large portion of this is to build products in the UK to sell tariff free into the EU.
A HUGE benefit to the UK of remaining members of the EU. Of course we would not lose all that investment, but lets say that other EU countries withheld 40% their investment from the UK and put that money to use elsewhere in the EU, that would be loss of around £170.1 billion out of the UK economy. If other countries around the world reduced their inward investment into the UK by 25%, that is further loss to the UK economy of another £150 billion.
So the UK pays net £1.5 billion a year and we get back at least £127.1 billion into GDP from trade, and a further £320.1 billion in EU related FDI…. creating UK jobs.

So far that’s an annual benefit to the UK economy overall of £128.6 billion.
And Brexiteers continue to cry about our 'membership fee'?
Being a member of the European Union is a bit like going to a sandwich shop and buying a £3 sandwich with a £5 note and getting back over £1,000 in change!

https://threadreaderapp.com/thread/1031867679613886464.html
https://www.gov.uk/government/statistics/european-union-finances-2015

buglawton

So let me get this right, if the UK weren't in the EU, we wouldn't be allowed to make cars to sell to the EU mainland, wouldn't be allowed to have business visitors from there and wouldn't be allowed to have that inward investment?

Moby

I see Manafort and Cohen are going down. Things are getting bad for Trump and over here the allegations mount up against Aaron Banks. The Brexiteer leaders and their cheerleaders are being exposed for what they are rabble rousing corrupt thugs who have manipulated their naive and gullible canon fodder followers.

Enterprise_1701C

buglawton wrote: »

So let me get this right, if the UK weren't in the EU, we wouldn't be allowed to make cars to sell to the EU mainland, wouldn't be allowed to have business visitors from there and wouldn't be allowed to have that inward investment?

Always knew it was a protectionist state rather than that of free trade.

After all, we imported and exported previous to the existence of the eu, and my father made quite a few business trips to the continent before we joined the eu. If these things are restricted (very unlikely) after we leave then they would just be proving that they are all about protectionism.

Ballard

buglawton wrote: »

So let me get this right, if the UK weren't in the EU, we wouldn't be allowed to make cars to sell to the EU mainland, wouldn't be allowed to have business visitors from there and wouldn't be allowed to have that inward investment?

I don’t think that anyone has suggested anything of what you’ve said.

What I think is likely to happen should there not be a deal is that red tape and duty will increase.

Enterprise_1701C

Herzlos wrote: »

What makes you think the EU has any obligation to do anything?

Article 50.

Arklight

Enterprise_1701C wrote: »

Always knew it was a protectionist state rather than that of free trade.

After all, we imported and exported previous to the existence of the eu, and my father made quite a few business trips to the continent before we joined the eu. If these things are restricted (very unlikely) after we leave then they would just be proving that they are all about protectionism.

It's :wall: not :wall: nineteen :wall: seventy :wall: any :wall: more :wall: things :wall: have :wall: changed :wall:

Filo25

Undervalued_one wrote: »

Just for starters Ireland becoming a second Greece or worse?
"Britain is not the only one under pressure. The unity of the remaining 27 EU states in facing off with Britain has started to crack as the risk of a damaging “no-deal” Brexit rises.

Poland’s EU minister Konrad Szymanski told his peers in July the bloc may soon be forced to chose between Ireland and having any deal with Britain. "
That's one example, from Reuters today. For some reason I can't post a link but the title is "EU diplomats expect delay in Brexit deal beyond October target".


Hang on.
We're asking for similar to what we have, in order to keep trade between us as similar to what already exists as possible so that neither they nor us suffer.
Not something better.
They aren't even offering what they already have in place with their other trading partners.
That stinks if you ask me.

Since no matter how you count it the EU sells us many tens of billions of pounds worth of stuff every year more than we sell them, it should be in the interests of the EU to agree.
But that would be expecting the EU to be logical, and the EU don't do logical.
Or timely.

So we want the same as we already have but without any of the obligations that we currently have alongside our current deal, and you are surprised the EU isn't keen?

Out of interest which one of the EU's other trade deals do you think is the same as the one we are pursuing.

I'll give you a clue its none of them.

Given our redlines a Canada style FTA deal is the only one that can reasonably be discussed but we still drone on about our fantasy Canada+++ deal that we deserve for being so utterly special compared to every other country in the world.

The EU has already said that it would be willing to discuss other models of our relationship if we are more flexible with our redlines but we haven't been, and the EU are the only party being intransigent here?

PS if we have an issue to the Irish border backstop we shouldn't have agreed to it last December.