Agree, free trade is out the window as free movement is the price, which is the single biggest issue for the UK.
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Agree, free trade is out the window as free movement is the price, which is the single biggest issue for the UK.
There is no deliberate under investment.
The mistake is to talk about access instead of membership. The single market is a market and anyone can access it but when you are a member you are exempted from tarrifs and your goods don't have to be systematically controlled, all your traders are also licensed and can operate in the market.
But we mustn't forget the possible removal of tariffs with other nations. For example, the cost of importing BMWs may go up, but the cost of Toyotas may come down. French wine may go up, but Australian and American wine may come down.
You think the UK can strike better trade deals with Australia/America/Japan than the collective bargaining power of a market of 500 million people? Good luck with that.
And that's without even getting into the wishful thinking of cheaper imports now that Sterling is tanking.
You choose two markets that doesn't work that way, people don't buy high ends cars based on price otherwise they would be buying Toyotas as we speak.
Nar, you've just never really coped with the baby booms of 1946, the 60's and then the third peaking in 1990, and it's been gradually getting worse year on year since.
But yeah, blame johnny foreigner.
Migration may be a problem to an extent, but a lot of the problems we're facing extend far beyond it. The biggest problem with hospitals and the NHS right now, for example, is the fact that we have an ageing nation and we're struggling to cope. Immigration may not help that, but it probably balances out when you consider a lot of immigrants bolster the NHS by working in it...and a lot of immigrants who move over are younger, healthier people (because someone in their late 70s probably isn't going to be migrating to a new country) and they don't necessarily rely on the NHS all too much.
Housing problems are largely down to the shortage in building: the number being built fell drastically during the Brown years and has only really started picking up properly again in the last couple of years.
The current ruling party of government has been running an active programme of deliberate under investment. They were very open about it. It was literally their lead economic policy. They called it austerity.
I have heard this said quite a lot and it simply isn't true. If price bears no relation to sales then why not double the price? Consumers are targeted within price bands and premiums at various levels are seen a value and worth the extra but lifting prices reduces potential consumers as the numbers able to pay the increased premium is reduced and other premium products begin to look better value.
The price might not be the sole factor but it is high on the list of criteria and if BMW raised its prices by 20% they would lose business.
Beisdes the fact that free trade agreements comparable to the single market of the EU are pretty unrealistic (quite frankly, if it would be possible these deals would have been already struck with the far more lucrative consumer market of the EU), what your example completely ignores is logistics.
You are talking about physical goods here, goods which have to come to the UK in some way. The reason why the single market works as well as it does is because the member states are geographically close to each other. The shipping costs of Australian goods would very likely be higher than the tariffs the UK will pay on European goods. It will thus still be cheaper to import from the continent than from Australia even without tariffs.
The talk of a global UK, which strikes good trade deals on it´s own with non EU countries is misleading as it will never be able to replicate what it had in the single market. To see that all you need is a world map. With the Brexit the UK shut out literally all their neighbours and has to look for partners far away.
Yeah, well, if we talk in extremes than it would certainly have significant consequences. A more realistic scenario would be the question, if a person would turn away from a purchase of a BMW, if it would cost 62.000 € instead of 60.000 €. The person will always find cheaper cars in the respective class, but that is not why people buy BMWs.
What that example also ignores is that not only German cars will become more expensive but also the other European brands aswell. Even British cars will get more expensive as these brands depend on the import of parts from the continent to construct their cars, which will get more expensive aswell.
All in all, pretty much all will lose something in the process of the Brexit. Well done.
Exactly. The price elasticity of mercs and bmw within their target market is not extreme. Obviously their British sales will take a hit, but it won't completely plummet. There will still be plenty of people willing to pay, and can afford, a high brand car even when the economy is in turmoil. Regardless, it isn't as if Bmw, Mercedes or VW will have to be liquidated even if UK sales fell to zero.
On the immigration nonsense, I can't believe that there are people who still think migration creates economics deficits. It's an economic proof that immigration creates a significant generating effect, particularly when the they're skilled workers that fill a void in the job market (also note that employment is necessary within EU legislation). As usual, the government has failed in regulating, monitoring and enforcing standards. Construction companies are already questioning where to find tradesmen when the Polish, Lithuanian and Hungarian workers are deported. Even more significantly, it is predicted that Brexit will require an increase in civil servants. As GB is already heading towards a pensions and healthcare mess, it's going to be 'interesting' to see how these will be supported with a significant reduction in the working age group.
Well done those who want to introduce tariffs which the UK doesn't want to do but you guys think it is worth it to defend the EU.
What tariff level do you want to see placed on the auto sector by the way if 20% is too high?
British cars won't get equally more expensive as domestic costs are reduced in relation. The UK has a pretty good model to base these assumptions on from when we dropped out of the ERM.
Hmm I am not sure with that kind of market segment. Btw BMW is far from the top so maybe that's the source of the confusion.
Nevertheless, there's no point for those companies to raise prices by 20% right now, what they have to create is a steady uptick every year to:
1/ Increase their revenue incrementally for their income statements
2/ Create the feeling that each year missed for their items is going to translate into a higher price next year, i.e. a sense of urgency
The typical examples are Chanel or even better, Hermes.
Each year, the prices just go up.
And just like compound interests, it can be massive over the years.
There are some limits too, for example, look at the luxurious watch segments.
I saw IWC having continuous discounts worldwide for 2 consecutive years now.
It probably tells us that they have reached a ceiling and in order to move to an upper tier, they need to find something new to propose.
I don't know for sure if BMW or Mercedes would have an immediate hit with a +20% tariff in the UK, but chances are that they will be fine.
Why? Because human beings are unfortunately very much focused on the perceived image.
And if the prices of those cars go up but you still bought one, it would mean that you are doing well, and you would show it to others.
Granted, they might be more into Porsche at least rather than BMW or Mercedes at this point, if we're talking German cars.
Or into Italian cars.
I would say Aston Martin is a pretty good choice too in this case
.No, Cameron and May decided to exploit the fear of migration and the perception that migration caused problems to mask their own failures.
Which just shows how crazy the UK has become. Babies and bathwater come to mind
The UK use tarrif with the rest of the world, you are the ones who are leaving the Custom Union and the only one to blame if you don't want to pay tarrif.
"introduce"? No. There have always been tariffs for any country outside the single market.
So what you're saying is @Don't Kill Bill, you don't want to pay into the EU, you just want tariff free access so that you can exploit the shit out of the EU and especially the poorer countries? Nice. Sounds fair.
This is a great example of why the referendum was such a ridiculous idea. The Tories have retrospectively decided that this is the biggest issue for everyone who voted. Because that's the best way they can try and prevent swing votes to UKIP. Now that may well have been the biggest issue for a lot of voters but there will be an awful lot of people out there who voted for completely different reasons. Because they felt that the UK was being asked to financially prop up failing states like Greece or because they think the whole eurozone project is going to collapse and they figured that the more distance they can put between the British economy and the rest of Europe the better. Basically, the reasons for voting Leave were many and varied but Teresa May and her cronies have decided that they have carte blanche to decide what is and isn't a red line issue when it comes to negotiating your way out. And that is a shocking state of affairs for everyone in Britain, whether you voted for Remain or Leave.
And to think people are seriously trying to argue that Brexit isn't just Britain trying to have its cake and eat it.
The UK chose to leave the EU and it had also ruled out other deals (EEA membership, the Swiss model, etc) which would have allowed the UK unrestricted access to the single market. Don't take me wrong its within its right to do so. However they should stop with this EU is 'punishing' the UK BS. No one is punishing anybody here. A change in relationship work both ways and I repeat the EU wasn't the one who initiated all this funfare.
They are well entitled to vote for a deal that will keep them from a safe distance themselves from Europe. There again, if a country distance itself from the EU then it shouldn't expect to enjoy the same benefits of those who are part of Europe. That's something many leavers can't understand and which many European are interpreting as cherry picking.
The single market is Europe. Leaving Europe means losing access to the single market.
It's bang your head against the wall stuff. Gaining tariff free access without actually paying into the EU is like working in the UK & paying zero percent tax whilst using every free state service avaiable.
I mean, we'd all like that, but the UK would go bust in no time. Why should the UK get cheap tariff free parts & labour from for example Poland if it doesn't want to then share some of the winnings back?
Mental, it's as much "having your cake & eating it" as can be but it's impossible to get the majority of people to understand this, they look at EU saying "if you're not in it's tariffs" and think they are mean petty horrible bastards for not letting us.
I'm sure they'd love someone living in the UK, earning 1,000,000 quid a year and fighting to pay 0% tax and 0 national insurance with the argument that "if you don't let me, I won't spend as much money in your shops or on your services".
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That's my point. Britain's relationship with the EU is incredibly complex. Breaking it down into a binary Leave/Remain vote then handing the whole project over to a single political party, interested only in securing votes (at a time when their opposition is a fecking shambles) is one of the worst decisions I can think of any nation making, ever.
Absolutely true. However the problem now is that it was the Remain side that were keen to make this a clean cut binary decision with no negotiations after the vote, and certainly no option of a second referendum. They calculated that people would be more likely to vote Leave if they thought it would only involve testing the waters and left open the prospect of changing their mind. They calculated wrong, and it makes it hard for them to suggest an about-turn.
The Remain campaign was a disaster from start to finish.
Taking back control innit.
Part of the problem as well was that Cameron was like a half-hearted Remainer in many respects. Since he's in government and has been in charge of the country...when people wanted to blame their problems on something it suited him for the problem to be something else. Problem is, people looked to immigration and to the EU, which meant if Cameron wanted to make them exempt his only answer was that Britain - currently - was fine. Which a lot of people disagreed with.
Not to mention the solid Leave base in his own party who he had to appease as well, who were also the reason for this whole thing to start with.
Why do you mean by signed away? You have been given the opportunity to accept or reject every single time.
I think this whole debate about cars - which is one example of a broader issue - is missing an important point which I mentioned off hand a couple of days ago but want to reiterate. As we move into a far more protectionist world, where the assumption that free trade benefits both sides, which has existed for many years now, goes out the window, it will not just be about the price of your Merc or BMW going up by 20% or whatever, and will rich people still buy them. There will also be at least an element of economic nationalism, where it is seen as a duty, or at least a virtue, to buy goods manufactured in your own country. That is the whole argument behind shunning free trade.
This is more overt in the US, but I think it will become more overt here as well. All this talk about bringing jobs back to the US will generate pride in the "American made" label and it is likely to become increasingly fashionable to buy US made goods. And people will need to buy US made goods, and be happy about the fact they cost more to produce because Labour costs are higher, even if they are cheaper than, or competitive with, foreign goods that have lower labour costs but high taxes slapped on them when they are imported. In order for people to accept that new paradigm of higher prices, it will have to be sold as a virtuous thing and a price that is worth paying for repatriating jobs. And maybe it is.
The UK is in a slightly different situation but there are similarities. There has been a lot of talk about rebalancing the economy, about the need to boost manufacturing, about the fact that "we dont make anything in this country anymore." By ending our free trade arrangement the cost of imported goods from Europe will go up, that may start to make it economical to make things here again that we used to import from countries that, under the globalisation model, specialised in those industries. When I brought this up before I was talking about cars and Nissan. I can see it becoming quite fashionable to buy Nissan, or any car that is British made, which could come to be seen as patriotic, supporting UK jobs, at a time when the UK is basically in a trade war with the EU. Ditto Vauxhalls, Hondas and Toyotas. At the higher end, people who might have bought a Merc might go with a Jag, or an Aston Martin.
Otherwise what is the justification for all of this? If this is all a backlash against globalisation, what is the rational antidote to that? Bring jobs back and buy local to justify that. There is no point in bringing jobs back to the UK and paying Brits more to build things than an Asian or Eastern European or South American could do it for, unless you encourage people to buy stuff that is made locally, by creating a sense of economic nationalism. As I said this is further along in the US but I think as usual the UK will travel in the same direction and it fits in nicely with what is happening here where we are erecting barriers between ourselves and our neighbours that will make it more expensive to trade. AND, on the surface at least, it creates jobs, which is a vote winner, and serves to justify the rising prices that will come alongside it. More money for workers via more jobs, but higher prices. It remains to be seen, all things taken into account, whether that leaves people better off or not.
Obviously there are a lot of other elements to this, a lot of other forces pulling things in other directions, and it may not pan out like that at all. But I can see this happening to some extent. I just think it is worth bearing that in mind. Its not just, Mercs are 20% more expensive, but Mercs are awesome and I am rich and want people to know Im rich, so Im going to buy it anyway. Its, Mercs are more expensive but they are also German, and the Germans have treated us horribly with the whole Brexit settlement, so screw them, and screw the French and their Renaults, and the Italians and their Fiats, Im going to buy a car that was made here, in the UK, by British workers, who after all are the best in the world at operating largely automated machines. This will be encouraged from the top down in all sorts of ways.
This is more overt in the US, but I think it will become more overt here as well. All this talk about bringing jobs back to the US will generate pride in the "American made" label and it is likely to become increasingly fashionable to buy US made goods. And people will need to buy US made goods, and be happy about the fact they cost more to produce because Labour costs are higher, even if they are cheaper than, or competitive with, foreign goods that have lower labour costs but high taxes slapped on them when they are imported. In order for people to accept that new paradigm of higher prices, it will have to be sold as a virtuous thing and a price that is worth paying for repatriating jobs. And maybe it is.
The UK is in a slightly different situation but there are similarities. There has been a lot of talk about rebalancing the economy, about the need to boost manufacturing, about the fact that "we dont make anything in this country anymore." By ending our free trade arrangement the cost of imported goods from Europe will go up, that may start to make it economical to make things here again that we used to import from countries that, under the globalisation model, specialised in those industries. When I brought this up before I was talking about cars and Nissan. I can see it becoming quite fashionable to buy Nissan, or any car that is British made, which could come to be seen as patriotic, supporting UK jobs, at a time when the UK is basically in a trade war with the EU. Ditto Vauxhalls, Hondas and Toyotas. At the higher end, people who might have bought a Merc might go with a Jag, or an Aston Martin.
Otherwise what is the justification for all of this? If this is all a backlash against globalisation, what is the rational antidote to that? Bring jobs back and buy local to justify that. There is no point in bringing jobs back to the UK and paying Brits more to build things than an Asian or Eastern European or South American could do it for, unless you encourage people to buy stuff that is made locally, by creating a sense of economic nationalism. As I said this is further along in the US but I think as usual the UK will travel in the same direction and it fits in nicely with what is happening here where we are erecting barriers between ourselves and our neighbours that will make it more expensive to trade. AND, on the surface at least, it creates jobs, which is a vote winner, and serves to justify the rising prices that will come alongside it. More money for workers via more jobs, but higher prices. It remains to be seen, all things taken into account, whether that leaves people better off or not.
Obviously there are a lot of other elements to this, a lot of other forces pulling things in other directions, and it may not pan out like that at all. But I can see this happening to some extent. I just think it is worth bearing that in mind. Its not just, Mercs are 20% more expensive, but Mercs are awesome and I am rich and want people to know Im rich, so Im going to buy it anyway. Its, Mercs are more expensive but they are also German, and the Germans have treated us horribly with the whole Brexit settlement, so screw them, and screw the French and their Renaults, and the Italians and their Fiats, Im going to buy a car that was made here, in the UK, by British workers, who after all are the best in the world at operating largely automated machines. This will be encouraged from the top down in all sorts of ways.
You're right. Although, of course, the consumer will ultimately be the loser. That's why so many Americans drive shitty cars.
This time last week half the caf was talking about the UK 'begging' for access, now they've recognised it's not quite like that but still haven't worked May's approach out, although at least they've still got 'cake and eat it' to go at.
It's this: The UK is willing to pay tariffs. Where agreements can be made that are mutually beneficial they will be, otherwise not. The UK will be somewhat worse off financially, at least in the short term, but the mandate of the referendum will have been met.
Good approach from May so far for me, except for one thing, the threats. I suppose she may be trying to lay something down she can later bargain away with, but I think a little leak here and there, always deniable, would have been a better approach.
It's this: The UK is willing to pay tariffs. Where agreements can be made that are mutually beneficial they will be, otherwise not. The UK will be somewhat worse off financially, at least in the short term, but the mandate of the referendum will have been met.
Good approach from May so far for me, except for one thing, the threats. I suppose she may be trying to lay something down she can later bargain away with, but I think a little leak here and there, always deniable, would have been a better approach.
Like I said the consumer loses as a consumer but potentially gains as a worker. I think net he will be a loser, I think free trade has been a positive thing, but it does have a downside in terms of creating losers, swathes of countries that get left behind, like the rust belt states in the US or basically everywhere outside the largest cities in the UK - which has led to the disillusionment that gave us Trump and Brexit. And it is exploitative, even as it raises the living standards of people in emerging markets, in the sense that manufacturing will gravitate to where it can get away with paying people least. So maybe some correction was necessary.
You are right and that's why I said that price wasn't the base of the choice. Look at how many social behaviours you had to interpret. Not only you and I can't tell how people are going to react but we can't tell how their behaviors are going to change and how many times it's going to take.
I happen to be quite close to the British community in Malta most of whom are quite old. They constantly moan how people treat them unfairly and about Anti British sentiment. Don't take me wrong sometimes they are right. The Maltese are good people but they tend to be very blunt, they are fiercely patriotic and they score low in political correctness. If you criticize their country too much they would easily advice you to return to that perfect country of yours despite the fact that they would probably be the first ones to miss you if you did. However most of the time it boils down with the locals treating the British like equals rather then superiors. The times of the empire when everything British was seen as perfect and superior is slowly wearing away, something many many UK citizens are struggling to adapt to.
I can't help to think that this feeling is mainly why so many people voted for Brexit. They miss the time when the UK was a force to reckon with and when the UK people were revered to as some superhuman beings just because they were British. Others treat them as equals but that equality is often mistranslated as lack of respect. Why should Belgium, Holland or Malta for all that matter have as much of a vote as the UK? Why should their laws be decided from 'unelected' (by the UK people) beaurocrats? Brexit caught the imagination of many UK citizens who miss that era. Once again the UK would be able to say NO to Europe and it will FORCE Europe to accept the UK terms or else.....Don't forget that these people were raised up admiring Churchill, Nelson and Elisabeth I, all of whom stood against Europe's tyranny and ended up getting their way.
Don't take me wrong the UK is still a prosperious country with some of the most brilliant people around. However times had changed. Globalization had brought so many big players in the mix that it makes it very difficult for single countries to be taken seriously unless they are enormous (most of whom ie US and Russia are in reality federations in itself). That's why countries are ganging up together, EU, Asean etc. The irony is that the UK became such a great nation because it acknowledged that it would be impossible for it to dominate the world if Scotland, England etc keeps squabbling with its neighbours.
What annoys me about the Brexiters is that (many) claim to support free trade. Do they feck. We are pulling out of the largest free trade area in the world.
United States - $18 trillion GDP
European Union - $17 trillion GDP
Canada - $1.5 trillion GDP
Mexico - $1 trillion GDP
By my calculations, that's exactly half the world's economy.
Now obviously we haven't seen CIPA come through yet and the TTIP seems to be dead.
But you either support free trade or you don't. Do we want to be in a free trade area with half the worlds economy or not?
United States - $18 trillion GDP
European Union - $17 trillion GDP
Canada - $1.5 trillion GDP
Mexico - $1 trillion GDP
By my calculations, that's exactly half the world's economy.
Now obviously we haven't seen CIPA come through yet and the TTIP seems to be dead.
But you either support free trade or you don't. Do we want to be in a free trade area with half the worlds economy or not?