[Fultonius]

I "get" the sovereignty aspect. I have similar sentiments re: Westminster/Holyrood. But the bit I never got about leaving the EU was how little was to be gained. Only ~10% of laws come from the EU and they mostly seem to deal with environmental protections, human rights, trade related regulations etc.

Most of those we'll have to keep aligning to no matter what type of brexit we end up with. I am still waiting for a brexiteer to show me 3 laws that are currently holding the UK back that will now be cast away.

Then there's the "unelected bureaucrat" line of reasoning. Which, 1) was false anyway, the decision makers in the EU are elected and 2) if we crash out on WTO trade rules, can you tell me who your local WTO representative is? How do you influence their decision making? Are they accountable?

Even if we get some kind of deal with the EU - we will be rule takers, with no influence.

I'd love to think that for all this shit we're going through there might be some kind of upside. I cannot see it. Anyone care to point me to it?

[petejh]

Above, Pete noted that economic forecasts are proven to be generally unreliable - but noted that he believes that the UK economy will be worse off in the short term as a result of leaving. In the long term it is just as likely to do well as to do badly, and no-one can accurately predict this.

The point I was trying to make - clumsily - on the other thread was that not all forecasts are created equal. In fact the predictions of a poor economic outcome tend to be long run predictions, and expert opinion is fairly confident in them.

The usual analogy is something like: I can’t predict your weight in ten years, but I can predict that if you increase your diet of beer and pizza, you’ll be heavier than otherwise, all other things being equal.

No one is saying the economy won’t grow, just that it will be smaller than otherwise.

I agree the consensus of forecasts is for GDP in 2030 to be marginally lower than it would be had brexit not happened (and all other things in the world being equal..).

That post however makes it sound like there's a fair degree of confidence. The truth looks different - just read the Cambridge paper from 2016 or 2018. Remember most of the authors have no political agenda and voted to remain, and have stated they'd do so again given the chance. There's certainly no confidence on show for the more extreme forecasts (negative or positive).

The long-term forecasts range from -7.9% to +4%, with most sitting between a 2% - 3.5% lower growth of GDP by 2030. See page 19 of the Cambrige paper (2016 version) for a table of the various long-term forecasts.

Would a 2 to 3% lower rate of growth of GDP over the next 12 years actually make any significant difference to the average person in 2030..?

Will all other things in the world be equal between now and 2030..? No unanticipated world events? No new technological revolutions?

[teestub]

No new technological revolutions?

Of course there will be the revolution in magic invisible borders.

[highrepute]

Would a 2 to 3% lower rate of growth of GDP over the next 12 years actually make any significant difference to the average person in 2030..?

Good question. Anyone here had any direct experience negative/positive since we voted to leave? Do you think 12 more years of the same thing will be good for you/your acquaintances?

My small experience is the dropping of the value of the pound has squeezed profit margins at my company (and the previous place I worked). Most electronics components are priced in dollars so any manufacturing in UK will be affected. In the immediate aftermath of the vote a device I was making went up in cost by 10% (company absorbed that loss). Some of our products now make a loss. Company makes burglar alarms. Prices will be going up soon - another brexit benefit to the man on street. No pay rise this year. Around 10 redundancies (literally as I've typed that they've called us in to announce more!). However, I should say, the £ fall isn't the only problem. Our international Sales (Europe) have literally vanished but that is most likely due to restructuring of our distribution by our new Chinese owners rather than some early Brexit effect. This is a bit of shitter because export would have been strengthened by the pound.

So this is my direct experience of Brexit. Increased costs, redundancies, pay freezes and new relationships with foreign powers that don't work like we do and shit things up.

[tomtom]

No new technological revolutions?

Of course there will be the revolution in seamless magic invisible borders.

Just fixed that for you Tim

[petejh]

While not wanting to make light of anyone's hardship, that's not your experience 'of brexit'. That's your experience of 'working in a burglar alarm company'. You could add 'owned by a Chinese firm'. Or 'based in xyz'. Correlation isn't causation..
(also: 'pay freezes' and 'foreign ownership of UK firms' have a long track record in the UK, unrelated to brexit)

[Johnny Brown]

Our numbers of EU students are down, which is strange given the fall in the pound which should make it cheaper. Our kit prices have gone up as we import most from France, no deal would see a big increase on these (guesstimate >30%) and huge VAT headaches. In our industry any kit manufacturer who uses this as an opportunity to compete runs the risk of being nixed due us losing influence on EN standards.

Those I know who work in the NHS or schools haven't had pay rises in ten years now. Prices have gone up in that time. I don't see brexit bringing any pay rises.

[tomtom]

Pete - AFIAK GDP is a general measure of how an economy is performing (both the total figure and how much it is changing by). At its crudest, its a sum of what people and companies are earning - so a reduction in growth of say 2-3% per year - would mean wage growth, company income growth (and from both importantly taxation that can then be used to further invest)  grow at a reduced rate. Might not sound much, but 2-3% over 10-20 years comes out at quite alot - especially if our EU neighbours GDP growth is not hampered (which is already happening I believe - hence us slipping down the tables of the richest nations in the world - based on GDP).

I was at a wedding last week - where my wifes uncles wife (god knows what relation that is to me!) now chairs a DEFRA committee on Vetinary Medicine. It was interesting to hear her take on things. She said that the whole civil service is in a partial state of paralysis - as Brexit is taking over c.25% of the general workload. This means that all (non brexit) plans fo the future (e.g. where to invest - what legislation to persue - iow how to make our country better) have been put on hold. Nothing new is happening - the usual business of government (making the country run better - and be a better place for its citizens) has been put on hold. She speaks from some experience having been an MP for 2 parliaments in the late 90's onwards. OK - its an anecdote, but the turmoil of something that hasnt even happened yet is having a slow but profound way on how our country should be progressing and developing. 

[petejh]

TT do you mean progressing like we have in the last ten years? No pay rises etc. See JB’s post above about that. Obviously I fail to see what about preparing to leave the EU isn’t making the country better.
GDP - the consensus is 2% to 3.5% lower *in total*, by 2030. Not year on year. Big difference. I recommend reading the Cambridge paper linked elsewhere for the exact figures.

[tomtom]

TT do you mean progressing like we have in the last ten years? No pay rises etc. See JB’s post above about that. Obviously I fail to see what about preparing to leave the EU isn’t making the country better.

No. Not wages.

I mean by progressing coming up with new policies and plans - both tackling existing issues effectively (e.g. Transport, homeless, NHS etc.. etc..) - and planning for future ones.

A chunk of running a business, or a country (the civil services job) is to look ahead and see what will need doing for the future (e.g housing, transport etc.. etc..) and setting plans accordingly. She was saying this has all stalled - as there is no capacity to do so due to the workload of brexit.

In her example - animal medicine - they should be looking at new standards, guidlines, best practices, products, treatments etc.. that are all developing and will develop over the next X years. But they cant.

The effect of this slippage is at present not visible - but will be in the coming 10 years.

I'll ask you a question to maybe illustrate - what policies have the government carried out or got through parliament since 2016 other than Brexit related ones?

[Oldmanmatt]

We provide GCSE PE lessons to EF language school (and a few smaller residential schools based in Torbay).
Over the last two years, the composition of those classes changed, from predominantly EU/Nordic students, with around 10-15% Middle Eastern or North African; to almost entirely Chinese and Sub-Saharan African. Speaking with the Principle, this trend is consistent  across their UK schools. The company is Swiss and they run residential schools worldwide. The EU students wishing to study in English, are choosing US campuses and qualifications, apparently. Fees in UK campuses have been reduced to attract alternative custom, but numbers are down and some campuses threatened. Many of the staff are EU citizens (other than British), they too are looking to relocate.

Also, speaking for the Climbing Wall, a large percentage of our clientele are Medical professionals from Torbay hospital and the buildings surrounding us are accomidation for overseas staff employed in the hospital. Both the Bed Manager and Ward Manager are clients here. The senior ICU Sister is Mrs OMM’s bestie and so on. The number of EU doctors and other staff has plumeted. I can see it from our membership lists and absolutely monthly’s are down on two years ago (we found alternatives, to fill the gap, so far). The French and Spanish from the hospital were great customers and there were a lot. The hospital is in a staffing crisis, and they put it down to inability to find staff, not budgetary issues. It’s a constant conversation theme, I don’t see any reason to disbelieve them.
Those who I knew, who decided to leave, all cited the referendum result.

Mrs OMM, is an Estate agent. She runs lettings for her company, several hundred properties. Around 70% of those are let to various EU citizens. A good number are leaving and many more have said they are actively looking to leave (many lookingfor US visas, apparently).

We (well, mainly Mrs OMM), are landlords; best tenant is our nextdoor neighbour, a dentist from Poland. After 12 years here, two children born here, he’s not willing to hang around and risk a future here; they’re leaving at the end of the year. Plenty of other landlords with similar stories.

And then there’s all my Romanian friends and relatives here, the constant conversations about what’s coming...

No numbers, no links, all anecdotal; but add it to the forcasts, projections and expert opinion, I’m staggered anyone can see this as a positive move. Even the Cambridge study only concludes it “might not be as bad as some predictions”, SK had some very valid criticism of the whole methodology and it still stands almost alone in a sea of more pessimistic forecasts, that apparently we’re just supposed to ignore.

Is everybit of every negative happening, effect, trend or event; Brexit related?
No, and I don’t think anyone is suggesting that, are they?
Hindsight will be the only opportunity to really pick that apart, but is this a positive move? Not a bloody chance in hell.

[petejh]

Even the Cambridge study only concludes it “might not be as bad as some predictions”, SK had some very valid criticism of the whole methodology and it still stands almost alone in a sea of more pessimistic forecasts, that apparently we’re just supposed to ignore.

Matt, I respectfully suggest you read that Cambridge paper, because it just isn't accurate to write it off simply as 'standing alone in a sea of more pessimistic forecasts' as if that's all there is to it.
If it stands alone in anything, it's in drilling into the validity of models currently used for predicting complex unprecedented events - models originated in the 50s which have failed to predict large complex shocks and which they report remain largely unchanged post the unforeseen 2008 crash.
It stands alone by looking into the assumptions lying behind those 'more pessimistic forecasts' and explaining why they believe many of those assumptions are seriously flawed.
It stands alone in asking what appear - to my untrained mind - valid questions of some very influential pieces of forecasting which have been much quoted in the UK media; which have become social media fodder for the masses to form their fears and beliefs around, including by you and others on here. It finds the most pessimistic claims to be grossly over-exaggerated and unfounded in their view and gives the reasons why.
And it proposes a different forecasting model, one better suited in their opinion to the complexity of an event like brexit, in an effort to restore credibility and trust to their profession because they acknowledge credibility has disappeared in the wake of years of poor results and biased thinking.

Written by people who would choose to remain in the EU. It appears to me to stand out in searching for truth among a sea of bias..

[teestub]

To bring it back to the climate change analogy, one paper about forecasts vs all the non economist business people, banks, etc etc. John Oliver recommended an appropriate way of representing this (from 3 mins for the punchline)

[petejh]

It's like talking to fervent religious believers..

Have you read the report? This isn't some far-fetched 'alternative' view. Here are some sections:

Abstract.
A wide range of reports from official bodies and academics have estimated the impact of Brexit. These influenced the outcome of the Brexit referendum and remain influential in informing views on the potential long-term consequences
of a range of Brexit trade arrangements. This paper builds on a previous CBR working paper (link) in examining the most influential of these reports, from HM Treasury, and the OECD. In this paper the work of the LSE’s Centre for Economic Performance is also included. Each of these reports base their analyses either on gravity models or a computable general equilibrium models.

The addition in this paper a review of the link between trade and productivity, which plays an important role in these reports. We also examine three reports which take a direct approach to measuring the impact by assessing the likely prices increases across a large range of commodities due to the imposition of tariff and non-tariff barriers, and using elasticities to estimate the potential changes in the volume of trade.

We find important flaws in both the application of gravity model results to a Brexit context, and in the knock-on impacts from trade to productivity. The flaws always have the result of exaggerating the negative impact of Brexit. The direct approaches involve partial rather than full equilibrium models but provide an important check on results from more complex models. However, the choice of elasticities can result in widely different results from ostensibly similar approaches.

The paper starts by looking at the view, supported in the academic literature and widely repeated in the financial media, that accession to the EEC/in 1973 improved the economic growth performance of the UK. The evidence suggests that this view is incorrect.

[petejh]

Introduction

Economic Forecasters in the UK have a poor record over the last decade. The failure to foresee the 2008 economic crisis has become infamous, even involving the Queen’s famous question: ‘Why did nobody notice it?’ That failure showed up how little work had been done on understanding the importance of credit markets in the UK. One aspect of this was the strange lack of a banking sector in the Bank of England model, a lacuna now being rectified.

The failure to predict the crisis was followed by a large over-estimate of the speed of recovery of the UK from the 2009 recession. The tendency of the Office for Budget Responsibility to over-estimate the speed of recovery (see chart 1 below) is now recognised by the OBR itself. The OBR proposes to drop its assumption that growth in UK productivity will return to a pre-recession norm. However, the OBR will continue to base its forecasts on assumptions for productivity and population rather than attempting to forecast these things econometrically. The common tendency to describe OBR projections as forecasts rather than assumptions has compounded the importance of its overoptimism.

The term ‘productivity puzzle’ sums up the profession’s difficulties in understanding the slow growth of productivity in the UK, and the related lack of growth in real wages.

In light of these shortcomings it might have been expected that the profession would take extra care to make its assessment of the potential impact of Brexit as fair and accurate as possible. A further failure would add substantially to the questioning of the underlying soundness of economic theory and practice related to forecasting. We argue in this paper that this did not happen and that much of the economic assessment of the impact of Brexit has been flawed, leading to a conclusion that the profession does indeed need to reassess its methods.

[petejh]

(intro continued..)

This paper begins by questioning the view common in academic and media publications that UK membership of the EEC/EU has been beneficial for growth in per capita GDP. This is followed by a brief description of the methods used by forecasters to generate the short-term Brexit forecasts, now known to be overly pessimistic. We then briefly summarise our previous work on the use of gravity models by H M Treasury and others in assessing the amount of trade likely to be lost due to Brexit.

This is followed by a review of the influential assessments of the impact of Brexit by the London School of Economics’ Centre for Economic Performance (CEP) which relies mostly on a general equilibrium approach. Then, we examine the basis for the widespread claim that any loss of trade will be accompanied by a knock-on impact on productivity. This relationship between trade and productivity commonly accounts for around half of the overall negative impact of Brexit, yet it is only
lightly questioned. Finally, we assess a small number of direct, partial equilibrium estimates of the impact of Brexit on trade, plus two reports which have very recently returned to the issue of the long-term impact.

Our conclusion is that most estimates of the impact of Brexit in the UK, both short-term and long-term, have exaggerated the degree of potential damage to the UK economy. We stress at this point that this is not a politically-driven exercise. Most of the four-person team behind the research for this and our other papers voted ‘Remain’ in the 2016 referendum and would do so again if given the chance. Our purpose is rather to establish a sound basis for the ongoing debate on the likely potential economic impact of Brexit, and more generally to question the quality of economic analysis in dealing with major, macroeconomic policy issue like Brexit.

[Oldmanmatt]

Sorry, Pete, I didn’t mean to imply I was writing the paper off and I certainly have read it (and take a good deal of heart from it).
I have only just read it today and caught up with the thread etc. since I’ve been all middle class and spent the last couple weeks canoeing down the Dordogne, dodging epic storms and doing the “Gite” thing (albeit one owned by (and unfortunately hosted by) the Monster-in-law).
Along with endless Expat commentary of the process and impending doom from the dinner party set (around 50% of the locals seem to be Brits, 20% Dutch and the odd, bemused, Frenchy). I have had to listen to “Investment Bankers” (or, possibly something that rhymes with that) explain why we’re all fucked etc...
(And you think I’m a pessimist, even I rolled my eyes a few times. I was actually almost glad to be struck down with diarrhoea on Thursday).
But, I is not so’s green, as I is cabbage lookin’...

Let’s be clear, you and I are actually not a million miles apart politically speaking. I think some people (you) have the impression I’m all “right-on” socialist or some such. I think/ get the feeling the primary difference between us is that I’m actually more authoritarian than you. I think there are rather a lot of people, in this country, who should not be allowed out without supervision, let alone vote...
(Exaggeration for humour, not an acurate position statement).
This leads me down a “Murphy’s law” chain of thought and takes me, on balance, to the negative side of the Brexit debate.
You seem to be far more optimistic in regards to peoples response what is coming. I fully agree that opportunities will exist etc, I just doubt they will be exploited or come to fruition; ON THE SCALE REQUIRED.

Going back to the Cambridge report, no, I haven’t processed it in detail yet. I don’t care that I’m a layman, I’ll try to break it down and understand as best I can, as I try to do with everything else.
I read it this morning and started to fact check etc this evening whilst sitting at work.
But, I didn’t get past the first assumption. The one about the supposed continuation of growth, had the UK not joined the EEC in 73.
Because I remember the events of the ‘70s.
The perturbations of that blue line (on a quick google) seem to coincide with little things like the almost complete collapse of the Engineering (heavy) industry in the UK, along with a similar collapse in manufacturing, mining and all the lovely political instability we had here and that the only reason it wasn’t a Gazzillion times worse, was the mitigating expansion of drilling in the North sea.
(Flippant, but not inaccurate).
None of those things were contingent on the UK joining the EEC. They were predominantly the effects of the seismic shift in the global economy that characterised that decade. Things like the “Made in Hong Kong” phenomena and Japanese electronics.
I didn’t see any account for those things in that assumption they made.
Whilst I have a healthy distaste  for Thatcher’s social policies and their sequela, I think her early economic policies pulled our collective genitalia out of the fire. I mean are just pretending the “Winter of discontent” didn’t happen?
Or was that, somehow, the fault of the EEC?

Still, plenty of meat to chew in that study yet.
I don’t, at this point, see it converting me to ardent Brexieer, though.
There remain SK’s criticisms, too.

[teestub]

Apologies, as per Matt I’m not trying to denigrate this paper and its standing in the world of economic weather forecasting. I’m trying to balance that with all the hundreds of examples from actual business people who trade with the EU reporting on how bad the effects of Brexit will be for them and their businesses. I don’t think they’ve been looking at forecasts, I think they’ve been looking at the real world.

[highrepute]

While not wanting to make light of anyone's hardship, that's not your experience 'of brexit'. That's your experience of 'working in a burglar alarm company'. You could add 'owned by a Chinese firm'. Or 'based in xyz'. Correlation isn't causation..
(also: 'pay freezes' and 'foreign ownership of UK firms' have a long track record in the UK, unrelated to brexit)

I understand what you're saying pete but you're wrong. This is my experience of Brexit. Through work is how most people will experience Brexit. I work at a UK Manufacturer - one of  the larger employers in Rotherham - who is going through a tough patch and who's management is citing Brexit as a cause of our problems. I mentioned the Chinese owners to be honest about the whole picture - these things will never be clear and there are people who will always use that lack of clarity to claim that this is not Brexit.

The weak pounds effect on Manufacturing is not something only the two companies I have worked for have experienced. It is well known and well discussed.

Our Chinese owners may be shitting on us a little bit but increased Chinese investment has been cited as a benefit of Brexit. In my experience, take overs by Chinese companies has not been a good thing.

Anyway, I thought of two more brexit experiences - one positive and one mixed. My mate Jon had some money in America and that was a lot more more after the Brexit vote. Similarly my old work colleague Maria - who is Austrian - had some savings in Austria increase in £ which allow her buy a nice house in the UK. Then her husband's company  - American Optics Manufacturer - decided that being in the UK wasn't a good idea and relocated to Germany. Maria is an extremely good engineer so it's made it very hard at work to lose her. For clarity, this is not the burglar alarm company but where I previously worked.

[petejh]

I "get" the sovereignty aspect. I have similar sentiments re: Westminster/Holyrood. But the bit I never got about leaving the EU was how little was to be gained. Only ~10% of laws come from the EU and they mostly seem to deal with environmental protections, human rights, trade related regulations etc.

Most of those we'll have to keep aligning to no matter what type of brexit we end up with. I am still waiting for a brexiteer to show me 3 laws that are currently holding the UK back that will now be cast away.

Then there's the "unelected bureaucrat" line of reasoning. Which, 1) was false anyway, the decision makers in the EU are elected and 2) if we crash out on WTO trade rules, can you tell me who your local WTO representative is? How do you influence their decision making? Are they accountable?

Even if we get some kind of deal with the EU - we will be rule takers, with no influence.

I'd love to think that for all this shit we're going through there might be some kind of upside. I cannot see it. Anyone care to point me to it?

Meant to give a reply (which you won't agree with) earlier and got sidetracked.

It isn't about any particular '3 laws'. It's about the principle of being part-governed from outside the UK. I'm against that in principle because I believe it's fundamental to a proper democracy to be able to hold those in power fully accountable for the consequences of their actions and fully accountable for laws passed. You can scoff at that for various reasons, fine we all believe different things and I don't expect to find much agreement on the echo-chamber of UKB. But you seem to appreciate the principle of having governance from within Scotland. The principle I believe in isn't very different.

I'm all for trade agreements. I'm all for harmonisation of standards where it makes sense. I'm all for free movement of people - but with *some* more control so we can cherry pick the people we really need more than it seems we currently do. Those things don't also require a central government that has any say in UK affairs.
And I'd also prefer those principles were global as far as possible, not just European. I've more enthusiasm for working/living/freedom to travel in the US, Canada, Australia, NZ then I have for Belgium or Portugal. In case of doubt I'm a keen European traveler, I love the different cultures, and non-English language has never been an issue.

For those who think it doesn't matter where power is based, then does it really matter if the UK government has to take direction and have laws passed from Australia, or the US, or Canada as part of some 'global union'? If it does matter, why?

Any trade / economic issues - there are obviously pros and cons with leaving and people being people will work out new opportunities, new job roles, new markets, just as they always have and always will. Because they'll have to and necessity, not ideals, has always been the biggest driver of change. The evidence suggests to me long-term (and even short-term) little if any real negative change for the average person whether we're in or out.

So obviously the upside for me of leaving is I believe it will mean the UK government being 100% accountable to the people, without wiggle room. For any and all shitfests that occur within the country which they're entirely responsible for governing. I think this is important because I believe that sort of 'social contract' pressure will result over time in beneficial effects on how the country is governed. To me it seems fundamental to keeping power in check as far as possible (there will always be corruption and mismanagement).
In short I believe, disagree all you like, that being independent from *but closely linked to* the EU will make the UK a better place to live for the average person.

Don't bother trying to rebut as there's nothing new to be said. This is just what I believe. It isn't an attack on *your* beliefs or values.

[tregiffian]

I couldn’ t describe myself as a nymph but I am your Echo.

[teestub]

I'm all for free movement of people - but with *some* more control so we can cherry pick the people we really need more than it seems we currently do.

 

[petejh]

What?   

[Ru]

I sort of understand the desire for "accountability", but in reality you will get very little accountability for your money.

The EU is responsible for regulations about things that most people don't care about that get written by civil servants, in exactly the same way that they are here. If there was a problem that required "accountability" all that would happen is that the minister ostensibly in charge would, at absolute best, shuffle sideways into another job and be replaced by someone else. It's a spectre.

[tomtom]

What?   

😱