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British EU Referendum Thread

Discussion in 'Politics' started by Taure, Oct 13, 2015.

  1. Darth_Revan

    Darth_Revan Secret Squirrel Prestige DLP Supporter

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    This seems to be the major sticking point, though. Tariff-free trade in goods is all very well, but the EU knows that on goods, it's coming from a position of advantage. The UK's financial services sector is more important, and the EU hasn't given an inch, publicly, on that front. That can't be good for overall business confidence, and it certainly won't be for the City specifically. The incentive for international banking institutions to abandon London grows every moment that they aren't reassured.
     
  2. Sesc

    Sesc Slytherin at Heart Moderator

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    Well, yes. The vague word in that is of course "full". There will be some access of some kind, and what kind some kind is will lead to endless nights of wrangling. There are some pretty obvious issues -- i.e. if the EU bans certain financial products, it can't have British banks coming in and selling them anyway. So either British banks will have to be regulated alongside EU ones (to prevent the from offering), or their access to the Single Market will have to be (to prevent them from selling). That was what I mean with no full openess without common regulation.

    That said, since the EU also wants a guarantee of no dumping tax rates in Britain, they will need to give some stuff as well. That could be one of the quid-pro-quos here. For example.


    Edit: Thanks for your take, @Taure. Then I hope everyone does CETA++, now, fast, to get this whole shitshow over with. There used to be a time when people didn't point fingers and snipe and leak "secret" documents every other minute. It'd be nice to have that back.
     
  3. Taure

    Taure Magical Core Enthusiast Prestige DLP Supporter

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    The financial services boat sailed long ago - the long-prophecied "doom" for the City of London has already come. All the banks enacted their contingency plans months ago, and it's far too late to go back, even if Brexit were magically averted. The ink is dry on the contracts - all staff that are going to move have already been told and the arrangements are in place.

    You will notice a distinct lack of collapse.

    The truth is, financial passporting isn't actually all that important, largely because the EU single market in services was and is paper-thin. Free movement of services has not been developed to anywhere near the same extent as goods and people. Arguably, the need for extensive regulation to guarantee financial stability means it never could be. Unlike the market for goods, where harmonisation has decreased regulation, European financial services harmonisation has massively increased regulation - Solvency II and MIFID II being the big ones, each running at thousands of pages. The need to comply with such extensive and demanding regulations in order to access passporting of financial services means that the barriers to intra-EU provision of financial services will always be high.

    To see the truth of that you just have to look at how dominant Amercan banks are within Europe. They just set up subsidiaries. Passporting makes things smoother, but it doesn't allow you to do things that you couldn't do before. Passporting isn't what allows you to operate in European markets - anyone can operate in Europe if they set up shop there. What passporting allows you to do is operate in European markets while being supervised by just one regulator. That's useful but not vital. And it's not like Brexit means that you will suddenly be regulated by 28 regulators. No, it increases the number from 1 to 2 (one for UK operations, one for EU operations).

    There isn't going to be any great collapse of London finance, nor is any single European city going to become "the new London". The work that does leave London is being fragmented between Dublin, Paris, Frankfurt, Amsterdam and Warsaw. Some of it is even going to New York and Singapore. But the vast majority of it is staying in London with just a few extra layers in the corporate structure which give them enough of a European presence to comply with regulations.

    Don't get me wrong, Brexit is still a stupid, stupid idea, causing significant disruption for absolutely no gain. A lot of energy is being put into regulatory and legal projects that are unnecessary. The UK government will likely pay a political price for this at the next election, since they have been unable to devote political energy towards the issues that people consider more important than Brexit (the NHS and transport). But the next election is a long way away and Brexit will have been completed before it happens, so who knows? Perhaps by that time, the government will receive a "Brexit is over" premium.

    But we must have perspective. The negative economic effect on the UK will be marginal, even in the worst case scenario as predicted by the various economic forecasts, and is expressed in terms of additional growth forgone rather than any actual loss of what currently exists. Further, the magnitude of that lost growth is such that it would be easily wiped out by any number of global or domestic economic forces taking a turn for the positive. For example, even a small increase in UK productivity growth would counteract the negative Brexit effect such that the net movement were positive.

    The big areas for disruption aren't actually financial services, which can just get on privately and enact contingency plans, but areas like aviation, which rely heavily on inter-governmental agreements. But any Brexit other than a cliff-edge "no agreement at all" Brexit will avoid those issues. Even in the cliff-edge scenario, the impact is less than you would think. I recently did a presentation for a number of airlines on the impact of Brexit and while preparing it I was surprised at how often the answer was "status quo continues". The big one that doesn't continue are the air service agreements (i.e. the right to fly over, take off and land). Those are obviously the cornerstone of aviation, and without them nothing happens. But because they're so vital, they're also the easiest the negotiate in a reciprocal fashion, and the UK has very recent (less than 10 years since they were converted to EU treaties) bilateral treaties to fall back on. The hardest one will be the US, but even there the question is not "will we have an air service agreement?" but rather "on what terms?".

    Ultimately, the reason why Revan's predicted fundamental shift in the British electorate won't happen is that Brexit won't have much of a tangible impact on most people. The biggest shifts in opinion so far have followed embarrassing negotiation incompetence, not material losses to people's lifestyle. Indeed, on that front most Britons are currently experiencing the greatest increase in their real incomes since the financial crisis, attributed at least in part to the massive decrease in immigration causing a shift in the balance of supply and demand for labour. Not good for employers, but employees are receiving long-awaited pay rises. Productivity growth has picked up significantly for the first time in years. Meanwhile, in the public finances sphere, the UK government has announced the achievement of its fiscal goals - the UK government budget is now in surplus on day to day expenditure, with borrowing only occurring for investment. That is the economic backdrop of Brexit. Don't hold your breath for any sudden outcry for Remain.
     
    Last edited: Mar 7, 2018
  4. Invictus

    Invictus Fourth Champion

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    You already lost 4,600 jobs for now. Downsizing will keep happening for a decade or so, just like US industries didn't suddenly pack up and left for Asia or Mexico. London real estate market has been in free fall. NHS is in an incredibly dire need for professionals and they're not coming unless the British government does a 180 on its immigration promises (and even then, the UK is far from an attractive market for anyone but idealists and third world professionals). This is when Brexit is still at least one year from happening. You didn't get a single promising trade relation on track to do when Brexit is done and over, no, in fact, everyone is actually waiting for the EU world, and that's gonna cost you later. You may also get stagflation later on. Then we have more than a thousand high paying jobs being moved thanks to the European HQs agencies moving and the thousands of related jobs catering to them and lobbying at them and regulation-related matters. Then you're also ignoring the fact that inevitably the UK and the EU will diverge their paths on a lot of things later on, and that will be painful (imagine how fucked Canada would be if it couldn't lobby with the US and NAFTA rules to fall on with Trump in power, and Canada is a lot more influent with the US than the UK will ever be with the EU now its out).

    I'm also not seeing that expected wage growth. Early promising signs didn't actuallly continue, to the contrary.

    So I'm frankly surprised by these bold claims of yours. Lots of average citizens got affected, thousands and thousands, and Brexit is stilly more than a year away, at least, of becoming reality. You will only see the real effect of Brexit three-five years after the UK left the EU.
     
  5. Taure

    Taure Magical Core Enthusiast Prestige DLP Supporter

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    Your post seems largely targetted to refute the idea that Brexit is good. I didn't say it was good. "Don't get me wrong, it's still a stupid idea". I am merely pointing out that the negative effects are much milder than predicted/feared.

    There's also a case here of talking across each other by misunderstanding the issue of scale. I didn't say no jobs were lost. I specifically said that people were moving. I said that there was no collapse. The loss of 4,600 jobs is tiny compared to what was predicted, and in fact pretty much every bank made an announcement several months back that far fewer jobs were moving than they originally expected. According to said banks, these job moves are pretty much it.

    A lot of your points were rather unBrexit related. NHS - already specifically mentioned this as a problem, but it is a largely domestic one that has been developing for years before the referendum. Stagflation - firstly, unlikely, secondly, not related to Brexit. Trade deals - firstly, not very important, secondly, legally impossible until after the UK has left, thirdly, will take years to negotiate. London real estate - a lot of people would welcome this, but actually (unfortunately) the fall in prices is restricted to prime property that is largely bought as an investment. "Mass market" property, i.e. the property people live in, is stubbornly stable.

    The loss of European agencies was utterly preditcable and in fact predicted. Unfortunate but part of the definition of Brexit. Pointing it out doesn't really demonstrate negative follow-on consequences of Brexit, it just points out that Brexit is happening. And of course the UK will have to establish replacement, domestic agencies, so in pure employment terms, not all of those jobs are "lost". The real loss is in terms of influence, not jobs.

    Wage growth: more recent article: https://www.ft.com/content/122b2c84-17fc-11e8-9e9c-25c814761640 (and again, misunderstanding of scale - the claim is not that wage growth has hit some spectacular rate, but that it is much better than it has been for the last decade)

    Productivity increase: https://www.ft.com/content/edcb9224-f1ff-11e7-b220-857e26d1aca4

    Government finances: https://www.ft.com/content/3f7db634-1cac-11e8-aaca-4574d7dabfb6

    As for the idea that Brexit won't have any effect for 3-5 years - this is not how business works. They don't sit around for years. They act in advance to maintain operations. All businesses are assuming hard Brexit and have been acting accordingly for quite some time now.
     
    Last edited: Mar 8, 2018
  6. Invictus

    Invictus Fourth Champion

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    No they're not. Read the own articles you link.
    The opposite of what you just said.

    Oh. Explain to me then how 10,000 European nurses and doctors leaving the UK while their registration fell in 90% after the vote has nothing to do with Brexit.

    Yes, something that more or less been happening for a few years is very unlikely. I have no idea how a lack of growth can relate to Brexit. Huh. Meanwhile the EU economies are doing great. Unrelated things, it's not like these economies should be tied up together closely but the UK has a much bleaker future and markets are reacting accordingly.

    Yes. NAFTA is irrelevant. That's why Mexico and Canada and the smart parts of the US are doing everything to keep it. As far as I'm aware what's impossible is to actually negotiate them, not, you know, do what would be the smart thing and arrange for promising agreements... Like May has desperately being trying to do with China, India, Australia and the US.

    0,5% of a city real estate value falling when the economy is supposed to be very healthy isn't good. "Oh, where people live this fall doesn't matter" duh? No one cares about those regions. London real estate value has always been in those high price properties. You have a billionaire industry there, and a lot of high paying jobs and taxes and the like that depend on it. It's not public housing that keeps up companies like Sotheby's Real Estate afloat.

    Amazing. You're claiming that the UK regulatory agencies will be as big, high paying and influential as the European ones, and that the whole industry of lobbying and dispute settling around them will be the same size. People actually think that a thousand high paying jobs and thousands of related ones is no big loss. Okay.

    ... Again?
    Read your own link.
    So all you have are some anedoctal comments and incidental signs of rise, and even that just peaked above inflation. No concrete pattern, just like the beginning of 2017 in my link.

    Not my point and not my point. But I'm curious, though, did the government budget already accounted for the 60b it's going to pay you the EU, plus the hundreds or thousands of new civil servants that, in your own words, will come in to replace the European agencies the UK will create that will pay just as well as the EU?

    You're basing your claims on a false premise. Business can't act in advance to regulation that doesn't exist yet. They don't predict the future. They can't guess what kind of regulation the EU and Britain will diverge in future, they don't know what government will be after May or even if May will stay her full term. For all they know Corbyin can be the PM. But they're not acting like he is, are they? Because they're going to adapt and chance their plans if that happens.
     
    Last edited: Mar 8, 2018
  7. Darth_Revan

    Darth_Revan Secret Squirrel Prestige DLP Supporter

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    I think you're rather too blasé on this point. Economics is, as much as anything, an attempt to predict conditions that are only evidenced by lagging indicators. Any policy takes 2-5 years to shake out and be fully evaluated for its effects, and while under normal conditions, businesses will begin to act proactively to adapt to the predicted policy, Brexit is in the position of being unhelpful on that front because no one has a firm idea of what the policy will be. As such, they're making vague plans for a regulatory realignment, but otherwise, they're in a holding pattern, and the cumulative Brexit effects to date aren't the full picture of what Brexit will mean.

    (Also, if trade deals aren't that important, that is news to the Tory government.)
     
  8. Mordecai

    Mordecai Drunken Scotsman Prestige DLP Supporter

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    So the DExEU internal briefing slides have now appeared on twitter.

    Interesting, if slightly depressing reading.
     
  9. Arthellion

    Arthellion Death Eater

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    I don’t have fancy statistics so obviously this is less “factual.” But the majority of my British friends aren’t too concerned about brexit.

    While several of them are leavers and that does color their opinion, the vibe I get from most of them is that the effects of Brexit are nowhere near as apocalyptic as most media agencies would have you believe.

    Are there negatives? Certainly. That’s not in debate, but the negatives are mostly mild in their minds.
     
  10. DerHesse

    DerHesse High Inquisitor

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    Maybe you should remind them, that the Brexit will be in March 2019.
     
  11. Taure

    Taure Magical Core Enthusiast Prestige DLP Supporter

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    @Invictus Your post is characterised by

    a) mischaracterisation of the linked materials and,

    b) mischaracterisation of your opponent's position.

    This is not the first time I have observed this trend (indeed, it has come to define the Trump thread). It is an inappropriate level of belligerence - this is not a court room, where you have a duty to your client to win at all costs, nor is there anything materially at stake. The politics subforum should be characterised by good faith discussions aimed at the truth, not winning arguments.

    Let us take an example of each of the above.

    Mischaracterisation of linked materials

    I linked an article about job movement out of London's financial services sector. The overwhelming message of this article is that job losses are much less than anticipated, and well short of disastrous levels.

    See:

    Message: a small proportion of London's workforce is moving. It is considerably less than predictions of doom.

    Example of a large bank where actual job losses are 8.75% of the predicted figure.

    Message: the lower job losses are not a coincidence, nor a delay, but rather result from the banks' detailed internal reviews showing that fewer job moves are necessary, in the event of UK loss of single market access, than at first thought.

    Example of a large bank where actual job losses are 17.5% of the predicted figure.

    Example of a large bank where actual job losses are 8% (no predicted figure).

    The rest of the article is largely about what time is the "point of no return" and most of it agrees with what I said above about it already being too late.

    Now, what did you do? To use the EU's favoured phrasing, you cherry picked the few parts that went against the grain of the article, which were provided for the sake of contrast and balance, and pretended that those quotes in fact defined the article.

    Mischaracterisation of your opponent's position

    Let's look at the issue of EU agencies.

    I wrote that:

    To break this up into this component parts:

    1. The drawing of a distinction between the intended elements of Brexit which are actually desired by the UK government and the consequences of Brexit which the government would prefer to avoid but can't.

    2. The positioning of loss of EU agencies and replacement of them with domestic agencies as the former, not the latter.

    3. The claim that "not all of those jobs" at EU agencies will be lost, as some will be replaced by the UK agencies. To be noted that "not all will be lost" is well short of a claim that "everything will be replaced". They are in fact almost at opposite ends of the spectrum.

    4. The claim that the loss of influence is more significant than the loss of jobs.

    Now let's look at what you wrote and break it down.

    1. You claim that my position was that the UK agency would be as big as the EU one. This deliberately mischaracterises my point above (3), pretending that I said almost the opposite of what I actually said.

    2. You claim that my position was that the UK agency would be as influential as the EU one. This deliberately mischaracterises my point above (4), pretending that I said the complete opposite of what I did.

    Meanwhile, you also completely ignore the substantive point I raised at 1 and 2.

    Conclusion

    Put simply, I do not have the kind of spare time to engage in a discussion with someone who utilises such a disingenuous and aggressive mode of communication. It's little more than trolling (basically trolling only with more hyperlinks) and does nothing to enhance the discussion in the thread. This type of discourse has already ruined the Trump thread, and it would be unfortunate if it now did the same to the Brexit thread.
     
  12. Invictus

    Invictus Fourth Champion

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    Sophistry a point won't make Taure. Instead of trying to argue over what I meant, use your own source material to prove your points by showing the parts prove them.

    You didn't actually engage with any of your or mine sources, instead it's a point made fully trying to argue dialectics and interpretation and of course, after several posts of mine here, you trying to attack me personally. Pretty interesting how you do a huge post attacking me and blatant accusing me of being both a liar and engaging bad faith debating and THEN saying you don't have the time to argue. Without, you know, engaging your own points.
     
  13. CareOtters

    CareOtters Minister of Magic DLP Supporter

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  14. Invictus

    Invictus Fourth Champion

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  15. Darth_Revan

    Darth_Revan Secret Squirrel Prestige DLP Supporter

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  16. Taure

    Taure Magical Core Enthusiast Prestige DLP Supporter

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    Constitutionally, no. The UK constitution is actually fairly simple, when you get down to it: if Parliament passes an Act, that's the last word on the matter. And Brexit will be achieved with an Act. Of course Gibraltar isn't part of the UK proper but rather a British Overseas Territory, with their own constitution. Nonetheless, all British possessions have the UK Parliament as the ultimate authority. The Gibraltan constitution was given legal effect by an Order in Council, which is primary legislation when exercised by virtue of the Royal Prerogative (which it is in matters of British Overseas Territories), but is nonetheless beneath an Act of Parliament in the order of legislative precedence.

    Politically... maybe? Depends how much the UK government cares about keeping Gibraltar. Gibraltar's ultimate recourse is to declare that they wish to join the Spanish state, which would turn the UK's self-determination arguments against it.

    However, a) I doubt Gibraltar would do that b) even if they did I can't see the UK government caring more about sovereignty over Gibraltar than Brexit.
     
  17. Chengar Qordath

    Chengar Qordath The Final Pony Prestige

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    Yeah, judging by the way the 2002 referendum on any sort of joint sovereignty with Spain went (Almost 99% opposed) I doubt Gibraltar would have an interest in leaving the UK unless things got extreme.
     
  18. Hopper

    Hopper Second Year

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    https://uk.reuters.com/article/uk-b...tion-uk-renews-irish-border-vow-idUKKBN1GV16B

    More or less complete capitulation. Just like everybody outside Britain expected. They're like Norway now.
     
  19. Taure

    Taure Magical Core Enthusiast Prestige DLP Supporter

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    I wish. Norway model is actually my ideal, even better than full membership. But alas this is just for 21 months.

    Also, there's one thing we didn't cave on, which was the ability to negotiate non-EU trade deals during the transition, so long as they don't come into effect until after the transition ends. Which realistically wouldn't happen anyway as they take a while to negotiate.

    And Ireland continues to be kicked down the road. The agreement continues to have a "backstop" of an intra-UK border down the Irish sea, but that only has effect if the final deal is signed. I think there's a real possibility that the UK government refuses to sign the final, consolidated deal on Brexit day, if that backstop is still in there. Ireland may still manage to sink the ship and result in "cliff-edge Brexit".
     
  20. Invictus

    Invictus Fourth Champion

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    Norway deal seems like lose lose. FT ran a pretty good article about it.
    Being on it, even on good cases, this will be the daily problems:
    Then of course, I think it's a 70/30% bet that the UK Financial services won't be included in the package, which will turn out likes this, probably for worse:
     
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