British Politics Thread

Irish border impossibilities aside, the main long-term economic problem I could see coming out of Brexit is that the Tories might respond to an initial recession by doubling down on austerity. The British economy can support all the payments from the EU without inflation (obviously) so the British government could just decide to duplicate all of them for X years, but they will obviously not do anything approaching that. Sure, border kerfuffle, import/cost of living increase etcetera, but at least economically things will probably stabilize reasonably quickly at a slightly worse level as long as a No Deal is avoided.

"Less money in its pocket" is an entirely meaningless phrase when all government spending is conjured out of nowhere by typing numbers into a spreadsheet. I don't know the exact mechanics of how the pound-euro payments are actually conducted, but as I've said before the EU does not need to give us our own currency in order for the British government to spend pounds. If the UK contributes less than it gets back in EU spending then we get some benefit from steady demand for pounds in the forex markets or increased foreign reserves of euros. If it's the other way around then we face an immediate cost from the divorce bill but maybe a slight benefit later. Either way it's not a big deal.

In terms of actual ability to spend then a country with their own currency has infinite money, obviously. The only limiting factors on domestic-currency govt spending are inflation or forex depreciation, usually the former unless there's a supply crisis. Hence as the EU spending is not currently causing inflation we could just copy all of it and move on as before if the various politicians would stop squawking about the deficit. We're not a Eurozone country nor do we have fixed exchange rates or a gold standard anymore, we can't go bankrupt.

Edited by DeathorCake on Aug 13th 2018 at 1:53:26 PM

The British Government will have less money in its pocket after Brexit because what it saves on membership fees it will have to pay (and then some) to cover all the services the EU is currently providing them with.

That is, constrained only by inflationary concerns? Can we please not fall into the trap of thinking there's anything but a self-imposed spending limit here?

Also, I don't see why a border through Ireland is particularly far fetched. It's not like there didn't used to be one.

Even when there was a border, it was mostly a target for terror attacks. And since then, a lot has changed. There are people commuting over the border to work every day, there is a street on which you are crossing the border multiple times just by driving over it and there are properties which would be cut in half by the border.

You know, there is a reason why borders usually go along natural barriers like rivers and mountains….

Pretty sure it is like there didn’t used to be one. We’ve had a free movement agreement with Ireland since Irish independence, and before that Ireland was under British control. Shit the one time the CTA was suspended was during the Irish war for independence and even then the border was at the Irish Sea.[1]

X4 What on earth makes you think the economy will stabilise? We’ll see increased austerity doing damage, capital flight doing damage, labour shortages doing damage and a lack of confidence in British services doing damage.

Edited by Silasw on Aug 13th 2018 at 2:53:59 PM

Ah, found the BBC analysis on it. During the 70's unapproved roads were made impassable by the army to force people to utilise checkpoints.

Sure but there’s a difference between a legal free travel area with internal military checkpoints right at the crossing points, and a legal border with customs and immigration checks.

There’s never been a legal border with customs and immigration controls.

x3

Because we aren't going to Brexit twice and cost increases from sudden extra bureaucracy aren't continuous and can be adjusted to to some extent? Increased austerity is entirely a political choice to screw the poor and slash the state, that's the biggest threat there.

Capital flight from the financial sector I'm not worried about unless the loss of tax revenue provides an excuse for more austerity. Markets barely have a memory, a one-time adjustment will probably not do long-term damage on that front. Loss of passporting probably will, but I won't weep for too long if a few thousand bankers have to leap the English Channel and give us a respite from the severe case of Dutch Disease that afflicts the UK at present.

Labour shortages could conceivably be capitalized on to raise wages and productivity, although that depends on whether we get a sane government or not. The current British growth model is dependent on an army of low wage, low productivity workers that provide low unemployment figures at the cost of standard of living, that needs to change regardless of what happens with Brexit.

There will almost certainly be a one-off rise in the cost of living, but it's not the end of the economic world.

Edited by DeathorCake on Aug 13th 2018 at 4:19:58 PM

A rise in the cost of living will send thousands into economic poverty, many people are barely scraping though as is.

As for capital flight not leading to austerity, or a labour shortage leading to wage improvements instead of businesses failing as they refuse to pay fairly and can’t understand where all their cheap labour went, both would only turn out non-negative if we had a sane government, which we don’t and won’t have a chance of having for several years.

Look a self contained collapse of The City is something I’d love, it’s The City, but it won’t be self contained, I’d also love it if the London properly market tanked, but it won’t, it will just dry up what will construction fo affordable houses we have.

Edited by Silasw on Aug 13th 2018 at 6:11:11 PM

Full Fact has an interesting article on how the payment works.

Edited by Wyldchyld on Aug 13th 2018 at 7:51:04 PM

Much obliged. I think the currency exchange is just using the normal forex markets given I found a government thing that says that the post-referendum drop in the pound reduced the EU budget somewhat as it's a fixed number of pounds.

The data there suggests that leaving the EU will remove a slight downward pressure on the pound from the government selling them to get euros, but that's a comparatively small slice of the trade deficit so not a major gain in any respect.

On another note, we're at 4% unemployment now if you believe the government figures. [1] I imagine that including longer-term unemployed and significant underemployment makes that nine or ten percent, which explains every other indicator suggesting that the labour market is only just starting to tighten up rather than being 2% away from full employment.

Does that include the two million people on zero hours contracts?

Their measure counts those as employed, my wild guess includes them as "significantly underemployed". According to the BBC 780000 people have those contracts as their main job and a quarter of those want more hours.

The ONS data [1] shows economic inactivity (not employed or officially unemployed) increasing by 0.2% as unemployment drops by 0.3%, so it's a good headline number for the Tories to wave about but not significant in the real world unless for some reason a disproportionate number of people suddenly became disabled or retired early rather than just dropping off the official unemployment definition.

Edited by DeathorCake on Aug 14th 2018 at 7:34:46 PM

So, Jeremy Hunt is still whining that the EU should change its position.

Honestly, when does this sorry display end? What is so difficult to understand about the concept that the EU will not risk the single market to appease the UK?

The fact that it means acknowledging the UK isn't important enough to be worth such a risk?

To reiterate, we're left with the most useless members of the Tory party in charge.

To reiterate, Hard Brexit supporters don't want the EU to change its position, they just want a scapegoat.

Edited by Wyldchyld on Aug 14th 2018 at 11:39:15 AM

Yeah, this is about being able to go "see, it wasn't our fault!" when everything inevitably goes to shit.

Isn't the problem with Teresa May the fact that she's actually a cut above the rest of the Tory crowd?

If she is, that's very faint praise.

Morally, she seems to at least be aware of something other than self interest, which is a step above the rest of the pond scum. But she's hardly any more competent (just look at her stint as home secretary) and just there to fail for everyone else.

Point being, there aren't any more competent Tories around right now. The party is a clown car.

Take that back! It takes skill, training and organisation to pull off a proper clown car, let alone a fully safe and "chaotic" skit to use it in.

The Tories... Well... No. Their chaos ain't orchestrated. And, forget safety.

But people vote for them... in a slightly milder version of the Dem vs Republican method of "I'll vote for these people just to stop YOUR people."

My local tories are actually vaguely competent and have managed regeneration, employment schemes and so on rather well. It's just at national level they go a bit mental. And we get Reese-Mogg types.

I had a near stand up argument with my family about Bo Jo as well - people still think he's a funny, "telling it like it is" buffoon. They do NOT question his motivation at all.

I'm not surprised that councillors are far more reasonable. They don't seem to be selected based on their apparently living 100 years ago in their minds, actual inability to do anything, or total misunderstanding of economics. People like bins being collected on time.

Can't see many of the Eton/Oxbridge lot happily working on such a low level.