Brexit matters

[Enthusiast]

Or, they believed what they were being told.

“Absolutely nobody is talking about threatening our place in the Single Market” - Daniel Hannan
“Wouldn't it be terrible if we were really like Norway and Switzerland? Really? They're rich. They're happy. They're self-governing” - Nigel Farage
“The Norwegian option, the EEA option, I think that it might be initally attractive for some business people” - Matthew Elliot (Vote Leave chief executive)
“Increasingly, the Norway option looks the best for the UK” - Arron Banks (Leave.EU founder)

All of the above were pre-referendum.

I suppose it depends on who you believed. Did you believe the Prime Minister, or did you believe other people who had different reasons for asking you to vote the way they'd like you to? There were plenty of predictions from both sides, a large number of which failed to materialise. It made no difference to me as I took notice of nobody as I'd decided more than twenty years earlier which way I would vote if ever given the chance. In fact I don't know who the last two on your list are. I work on the assumption that all politicians tell lies, or at he very least do not tell the whole truth and I rarely, if ever rely on their musings. However, for those who do not share my cynicism there is no doubt that the "official" information provided to all households (which encouraged people to vote remain) made it quite clear what a vote to leave would mean as far as the Single Market and FoM went. Anybody who listened to spivs and chancers (and most politicians) ran the risk of being misled.

They did make it well known. But then Leave campaign replied that it was all part of "Project Fear".

Both sides ran their own version of "Project Fear". George Osborne told me that "A vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession”. I didn't. But I don't hold it against him because I don't believe what politicians (of any persuasion) tell me. It's my job to sort out the wheat from the chaff.

When I voted to leave, my definition of leaving was to withdraw entirely from the EU and all its institutions. Everybody who voted to leave had different reasons for doing so but it was optimistic in the extreme expecting the UK to retain any of the major benefits of EU membership if we left. Frankly, people who voted to leave with that expectation have only themselves to blame if they are now disappointed.

When I made my decision that I would vote to leave FoM was not a particular issue. There were only twelve members and the numbers from them settling in the UK were not particularly unmanageable. That all changed in 2004 with the eastern expansion. It was plainly obvious that people in countries where average incomes were as low as 10-20% of those in the West, would up sticks and that there would be mass migration from the East to the West. This was exacerbated in 2007 with the accession of Romania and Bulgaria. It may seem all fine and dandy that UK citizens could work, study and settle in any one of 27 European countries of their choice. However, it is plainly ridiculous that upwards of half a billion people had the absolute unfettered right (bar in the most exceptional circumstances) to settle in the UK. The decision I took in 1992 was never likely to change and it was not particularly influenced by FoM at that time. However, had I reconsidered in 2016, FoM most certainly would have been a major factor in my decision.

 

[najaB]

George Osborne told me that "A vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession”.

Instead we've had stagnation and a lost generation.

 

[renegademaster]

No, and I haven't claimed to. But nobody has presented any evidence to the contrary despite asserting it.

However, polls show a majority believing Brexit was the wrong decision, which implies that a majority would either favour FoM or be prepared to live with it as part of a package wtih the other benefits.

The text you quote makes clear that remaining in the SM was likely to involve FoM, but it doesn't say that the intention would be to leave the SM. It cites non-EU members who have chosen to join the SM, which demonstrates that is it possible to do so and was in fact the preferred choice for those countries.

Leaving the SM was perhaps obvious from the point of view of an ardent and involved Brexit supporter. But it wasn't really clear to the casual voter in 2016 and as @najaB has posted, prominent Brexit campaigners went out of their way to make sure it wasn't widely known. By 2019 when it was known that Brexit was going to involve leaving the CU and SM, the balance of opinion had swung against Brexit. So if there had been a second referendum in 2019 it's likely a majority would have voted to remain and accept continuing FoM.

FoM and immigration was a clear part of the campaign, most people didnt care about the boring economic aspects

 

[edwin_m]

FoM and immigration was a clear part of the campaign, most people didnt care about the boring economic aspects

But they do now...

 

[renegademaster]

But they do now...

And what evidence do you have that theirs a mandate to bring back EU FoM because of it?

 

[najaB]

And what evidence do you have that theirs a mandate to bring back EU FoM because of it?

That's a good question. Given that numerous polls have shown that that there is a significant desire for closer alignment with the EU and possibly even for re-joining the Single Market and Customs Union (which would bring some form of Freedom of Movement with them), there are good grounds for a plebiscite to find out if there is majority support.

 

[renegademaster]

That's a good question. Given that numerous polls have shown that that there is a significant desire for closer alignment with the EU and possibly even for re-joining the Single Market and Customs Union (which would bring some form of Freedom of Movement with them), there are good grounds for a plebiscite to find out if there is majority support.

You can have customs union without FoM , see Turkey

 

[Enthusiast]

You can have customs union without FoM , see Turkey

Yes you can. But a country cannot enjoy access to the Single Market without it. And it would not be "some form" of Freedom of Movement. It would be free movement of goods, capital and people.

 

[DynamicSpirit]

They did make it well known. But then Leave campaign replied that it was all part of "Project Fear".

I'm dubious about that. My memory is that 'Project Fear' was the label the Leave campaign applied to the repeated claims by Remain that leaving would cause an economic disaster. I don't recall it being applied to claims that we would simply leave the SM.

Since there manifestly hasn't been an economic disaster as a result of leaving (well, at least, not one that appears to have been caused by Brexit), merely a small decline in our GDP, it does seem that with hindsight, 'Project Fear' was an apt moniker.

 

[najaB]

Since there manifestly hasn't been an economic disaster as a result of leaving (well, at least, not one that appears to have been caused by Brexit), merely a small decline in our GDP, it does seem that with hindsight, 'Project Fear' was an apt moniker.

A "small decline" in our GDP that is a symptom of an economic disaster, just in one that's happening in slow motion. And things are only likely to get worse if/when we actually start doing the border checks that we should be doing.

 

[DynamicSpirit]

A "small decline" in our GDP that is a symptom of an economic disaster, just in one that's happening in slow motion. And things are only likely to get worse if/when we actually start doing the border checks that we should be doing.

Rubbish. A small decline in GDP is, by itself, exactly what it is: A small decline in GDP. Of course, if that decline continued indefinitely, so that say 20 or 30 years in the future, GDP growth was still lower in the UK compared to other countries, all because of that one single event 20-30 years in the past resulting in massively lower standards of living in the UK, then the people 20 or 30 years in the future might regard that event as causing a disaster, but there is roughly zero reason to believe that is what will happen with Brexit.

 

[najaB]

but there is roughly zero reason to believe that is what will happen with Brexit.

Except every economic prediction says that the impacts on the UK economy are "baked in" for at least the next decade. To quote the OBR:

• Both exports and imports will be around 15 per cent lower in the long run than if the UK had remained in the EU. The size of this adjustment is calibrated to match the average estimate of a number of external studies that considered the impact of leaving the EU on the volume of UK-EU trade (see our November 2016 EFO for more information).
• New trade deals with non-EU countries will not have a material impact, and any effect will be gradual (see our 2018 Discussion paper for more detail). This is because the deals concluded to date either replicate (or ‘roll over’) deals that the UK already benefited from as an EU member state, or do not have a material impact on our forecast.

Source: https://obr.uk/forecasts-in-depth/the-economy-forecast/brexit-analysis/#assumptions

 

[Dent]

Rubbish. A small decline in GDP is, by itself, exactly what it is: A small decline in GDP. Of course, if that decline continued indefinitely, so that say 20 or 30 years in the future, GDP growth was still lower in the UK compared to other countries, all because of that one single event 20-30 years in the past resulting in massively lower standards of living in the UK, then the people 20 or 30 years in the future might regard that event as causing a disaster, but there is roughly zero reason to believe that is what will happen with Brexit.

This is not just a single event, leaving the single market is a lasting change which makes trading more difficult, an therfore stifles growth, and will continue to do so until rejoining the single market.

 

[DynamicSpirit]

This is not just a single event, leaving the single market is a lasting change which makes trading more difficult, an therfore stifles growth, and will continue to do so until rejoining the single market.

With respect, that's a misunderstanding of how the maths work. The single event is our leaving the EU, which changes our trading arrangements and - as expected - has caused a reduction in GDP [*] variously estimated as somewhere in the 4% range. Taking that 4% figure for the sake of argument, that change is in effect permanent (at least until UK conditions substantially evolve). Therefore we can expect that that next year GDP will be 4% lower, and the year after and the year after that etc., so that - all other things being equal - in say 20 year's time GDP will still be 4% lower than if we had not Brexited (That's the 'baked in' thing @najaB refers to)

But that is the baseline GDP. You appear to be claiming something more: That the year-on-year growth in GDP will be lower stretching into the future. If that was the case, it would be a huge problem. For example, growth being - say - 1% a year lower would mean our actual GDP being 30% lower after 30 years[**]. But that is not plausible. GDP growth generally happens because of improvements in technology, productivity, or changes to the business environment and economic policies. But once Brexit is complete, it's complete. The UK has a new trading environment which is no longer dramatically changing. So future growth will be determined by the exact same things that would have determined it in the EU: Technology changes etc. Therefore future growth is going to be roughly the same with or without Brexit: Brexit simply means it's growing from a slightly lower base.

In fact it's even more favourable to Brexit than that, because the assumption of 'all other things being equal' is unlikely to hold. We have a market-based economy, and markets are, generally speaking, incredibly good at adapting over time. We've only just Brexited (with some stuff like border checks not fully changed over even today) so the market arguably hasn't yet had time to fully adapt. But UK businesses and markets will adapt to the new trading environment. That will take time, but it's reasonable to expect that as they do, that will cause some catching up of the estimated 4% of GDP that we've lost because of Brexit. And that's even before you consider things like that Brexit should over time allow the UK Government to bring regulation etc. closer to the needs of the UK rather than some kind of average of the needs of every country in the EU.

[*] For GDP, I mean GDP per capita. Please take that as read everywhere in this post.
[**] Simplified maths. I'm doing 30 * 1%; more correctly should be 1 - (0.99)^30 but I'm sure you get the point.

 

[Enthusiast]

This is not just a single event, leaving the single market is a lasting change which makes trading more difficult, with the EU an therfore stifles growth, and will continue to do so until rejoining the single market.

FTFY

 

[Dent]

With respect, that's a misunderstanding of how the maths work (and ditto @najaB's post which claims much the same thing). The single event is our leaving the EU, which changes our trading arrangements and - as expected - has caused a reduction in GDP [*] variously estimated as somewhere in the 4% range. Taking that 4% figure for the sake of argument, that change is in effect permanent (at least until UK conditions substantially evolve). Therefore we can expect that that next year GDP will be 4% lower, and the year after and the year after that etc., so that - all other things being equal - in say 20 year's time GDP will still be 4% lower than if we had not Brexited.

I am not misunderstandings anything about how maths works. If the rate of growth continues to be stifled by the ongoing difficulties in trading due to not having access to the single market, that will continue to have a cumulative effect of GDP.

But that is the baseline GDP. You appear to be claiming something more: That the year-on-year growth in GDP will be lower stretching into the future. If that was the case, it would be a huge problem. For example, growth being - say - 1% a year lower would mean our actual GDP being 30% lower after 30 years[**]. But that is not plausible.

How is it "not plausible" that making trading permanently more difficult will result in it being permanently more difficult to launch or expand businesses, which will result in fewer new businesses launching and businesses expanding less, which will result in a lower rate of growth?

If you think about it logically, it is not only plausible but an inevitable consequence of making trading permanent more difficult.

FTFY

Not sure what your point is there. Any reduction in trade with the EU is by definition a reduction to the total amount of trade. There is also the additional impact on trade with other countries due to losing trade deals we previously had by virtue of being in the EU.

 

[DynamicSpirit]

I am not misunderstandings anything about how maths works. If the rate of growth continues to be stifled by the ongoing difficulties in trading due to not having access to the single market, that will continue to have a cumulative effect of GDP.

I'm afraid that tells me that you have either not properly read my explanation, or you have not understood it. To repeat: The difficulties in trading will impact the actual level of GDP after Brexit. But they will not change future growth - because those difficulties in trading are already baked into the absolute 'baseline' GDP from which the growth occurs.

How is it "not plausible" that making trading permanently more difficult will result in it being permanently more difficult to launch or expand businesses, which will result in fewer new businesses launching and businesses expanding less, which will result in a lower rate of growth?

Because those difficulties in trading are already baked into GDP and into the way in which businesses operate. Your business sales might have contracted by (for the sake of argument) 4% because of Brexit and that gives you a lower base from which to expand, but it doesn't - on average - make expanding by X% from that lower base harder than it would've been to expand by X% from the slightly higher base that would've happened without Brexit.

If you think that having access to only a smaller market impacts growth, then how do you explain that isolated countries like Australia and New Zealand, with their much smaller markets, are able over time to maintain similar levels of growth as much less isolated countries like France and Germany? Answer: Because their isolation is already baked into existing GDP levels, and their businesses are, on the whole, already adapted to that isolation.

Not sure what your point is there. Any reduction in trade with the EU is by definition a reduction to the total amount of trade.

Yes, it's a reduction in the total amount of trade, which is a reduction in the base from which future expansion takes place. But that's not the same thing as a reduction in growth rates.

 

[Dent]

I'm afraid that tells me that you have either not properly read my explanation, or you have not understood it. To repeat: The difficulties in trading will impact the actual level of GDP after Brexit. But they will not change future growth - because those difficulties in trading are already baked into the absolute 'baseline' GDP from which the growth occurs.



Because those difficulties in trading are already baked into GDP and into the way in which businesses operate. Your business sales might have contracted by (for the sake of argument) 4% because of Brexit and that gives you a lower base from which to expand, but it doesn't - on average - make expanding by X% from that lower base harder than it would've been to expand by X% from the slightly higher base that would've happened without Brexit.

Whether "baked in" or not, the obstacles to trade due to not having access to the single market will continue to exist, and therefore continue to have the same consequence of stifling growth rate, for as long as we lack access to the single market.

Yes, it's a reduction in the total amount of trade, which is a reduction in the base from which future expansion takes place. But that's not the same thing as a reduction in growth rates.

A reduction of trading opportunities is not "the same thing as" a reduction in the growth rates, but it is a cause of a reduction the the growth rate.

 

[najaB]

If you think that having access to only a smaller market impacts growth, then how do you explain that isolated countries like Australia and New Zealand, with their much smaller markets, are able over time to maintain similar levels of growth as much less isolated countries like France and Germany? Answer: Because their isolation is already baked into existing GDP levels, and their businesses are, on the whole, already adapted to that isolation.

It's a shame then that the UK economy isn't similarly adapted to isolation. The problem isn't having a smaller market, it's suddenly having a much smaller market than you previously did.

 

[edwin_m]

And what evidence do you have that theirs a mandate to bring back EU FoM because of it?

I'm not saying there is a mandate now, I'm saying that most people now thing Brexit was a mistake and therefore, knowing then what they know now, would not have voted for it (with the complication that a few million mostly Leave voters have since left the electorate and a few million who would mostly have been Remain voters have joined it).

Wanting to pursue rejoining or the SM now is risking the sort of chaos we had in 2019 and many shy away from that. But if the trend continues it's likely to become more popular in time as memory fades, more of the older more Leave voters leave the electorate, and either the Tory party realises that its pro-Brexit position is heading it for insignificance, or it reaches that position of insignificance where it can't influence events.

 

[DynamicSpirit]

It's a shame then that the UK economy isn't similarly adapted to isolation. The problem isn't having a smaller market, it's suddenly having a much smaller market than you previously did.

Agreed. But suddenly finding you have a smaller market than you previously did is one-off thing. Once the market has shrunk because of post-Brexit trading rules etc., it should stay stable at the new size. It's not going to keep shrinking again year after year! The UK is after all not getting smaller!

(Also worth pointing out that the smaller market isn't all one way: It also means there are proportionately fewer competitors: So if the UK-EU trade barriers work the same both ways, then on average you'd still expect to end up with the same number of customers, just more of them within the UK and fewer from the rest of the EU).

 

[najaB]

Agreed. But suddenly finding you have a smaller market than you previously did is one-off thing. Once the market has shrunk because of post-Brexit trading rules etc., it should stay stable at the new size.

Well, a) that hasn't happened yet. We still haven't implemented any post-Brexit border checks, etc. So we're already feeling the pain and there's a lot more to come than we've already suffered; and b) the "adjustment to a smaller market" means businesses closing and people losing jobs.

The UK is after all not getting smaller!

There are people in both Scotland and Northern Ireland who want to have a word with you about that statement.

 

[E27007]

Europe live: Brussels proposes free movement deal for UK’s 18- to 30-year-olds

European commission floats opening negotiations with London to allow under 30s in UK and EU the same rights they enjoyed before Brexit

www.theguardian.com

What? Our young can’t go anywhere especially to the EU !!!

They may start thinking that leaving EU and ending Freedom of Movement was stupid idea …

Sarcasm .

"Under the envisaged agreement, both EU and UK citizens aged between 18 to 30 years would be able to stay for up to 4 years in the destination country, the European Commission said in a detailed statement"

In practical terms restoring the same FoM which swamped the UK with migration after the ascession of the Eastern Europe member states

 

[Enthusiast]

"Under the envisaged agreement, both EU and UK citizens aged between 18 to 30 years would be able to stay for up to 4 years in the destination country, the European Commission said in a detailed statement"

In practical terms restoring the same FoM which swamped the UK with migration after the ascession of the Eastern Europe member states

An idea which thankfully the government has rejected:

UK rejects mobility agreement with Europe to help young people travel and live abroad

Labour also rejected the possibility of an EU-wide scheme for young people

www.independent.co.uk

"But a UK government spokesperson said: “We are not introducing an EU-wide youth mobility scheme (YMS) – free movement within the EU was ended and there are no plans to introduce it."

 

[najaB]

An idea which thankfully the government has rejected

Yeah. It's a good thing that they didn't allow the people who are most economically active and least likely to make demands on public services to reside here for a limited period at a time where we're struggling to fill the exact kind of jobs vacancies that they'd be likely to fill.

 

[Enthusiast]

Yeah. It's a good thing that they didn't allow in the people who are most economically active and least likely to make demands on public services to reside here for a limited period at a time where we're struggling to fill the exact kind of jobs vacancies that they'd be likely to fill.

Where would they live?

 

[renegademaster]

Yeah. It's a good thing that they didn't allow in the people who are most economically active and least likely to make demands on public services to reside here for a limited period at a time where we're struggling to fill the exact kind of jobs vacancies that they'd be likely to fill.

The people that fill the exact kind of jobs that have seen historically high wage rises.

 

[najaB]

Where would they live?

For the most part, you'd be looking at single people who wouldn't be averse to high-density housing.

 

[E27007]

The people that fill the exact kind of jobs that have seen historically high wage rises.

So what is the motive behind the "largesse" of the EU is seeking FoM for the 18 to 30 age group, do they see the UK as a solution to the high rates of structural unemployment of young people in several member states, Portugal Spain Italy etc?

Youth Unemployment % the EU

 

[Snow1964]

Where would they live?

Unless I am mistaken, even people like Kevin McCloud (the TV architect) is suggesting live abroad from UK.

We have 18-25 year olds, that are having mental health issues due to Brexit (and loss of education due to COVID). they weren't allowed to vote, and we have alienated that age group. The NHS isn't resourced to help the lost generation due to lack of mental health provision either.

If you have 10-15% of your workforce age in the doldrums then that is a baked in drop in GDP which might take decades to sort. No wonder the econony is in almost continuous borderline recession rather than growing by taking the mythical growth Brexit was supposed to give.

It's not like 1950s-1980s for that age group, who could look in classified ads in local newspaper and find loads of rooms,bedsits, flat shares to rent for about quarter of their wages/salaries. We have killed off the cheap rental market by our silly sell off property housing policies, and recent attacks on all landlords discouraging renting out rooms or properties (rather that tackling the few bad landlords who rent seriously sub-standard properties and don't care about tenants).

There may be older generations who are in denial about damage Brexit caused to those 18-25 and upcoming school leavers. But we seriously need to wake up and accept it has caused more long term downsides than long term gains.