Life After Brexit

[Mervyn and Trish]

Although I'm a leaver and will be glad to be gone I wish that in the extraordinary circumstances of 2020 the UK and the EU could have agreed a 12 month pause in proceedings. Clearly both parties have had a huge distraction from the important trade talks.

The Eu did offer a two year pause Merv but we declined.
The conditions were approx £25 billion in contributions and adherence to any new Eu laws passed during that period.
That would have meant a substantial contribution to the Eu recovery fund of, some say, about £100 billion .
The price of a pause is not acceptable for a third country.

Yes I suppose I meant a no conditions pause. Simply an extra 12 months with the status quo. The conditions you quote were never going to be acceptable. Just trying to profit while looking like the reasonable good guy and failing. Like me offering to keep an eye on my neighbours house while he's on holiday in return for access to his bank account!

[towny44]

Although I'm a leaver and will be glad to be gone I wish that in the extraordinary circumstances of 2020 the UK and the EU could have agreed a 12 month pause in proceedings. Clearly both parties have had a huge distraction from the important trade talks.

The Eu did offer a two year pause Merv but we declined.
The conditions were approx £25 billion in contributions and adherence to any new Eu laws passed during that period.
That would have meant a substantial contribution to the Eu recovery fund of, some say, about £100 billion .
The price of a pause is not acceptable for a third country.

Yes I suppose I meant a no conditions pause. Simply an extra 12 months with the status quo. The conditions you quote were never going to be acceptable. Just trying to profit while looking like the reasonable good guy and failing. Like me offering to keep an eye on my neighbours house while he's on holiday in return for access to his bank account!

Merv, the EU would be very happy for an extension, just like Barney said, but the terms were never going to be acceptable to the the hard line brexiteers.

[Kendhni]

The Eu did offer a two year pause Merv but we declined.
The conditions were approx £25 billion in contributions and adherence to any new Eu laws passed during that period.
That would have meant a substantial contribution to the Eu recovery fund of, some say, about £100 billion .
The price of a pause is not acceptable for a third country.

Yes I suppose I meant a no conditions pause. Simply an extra 12 months with the status quo. The conditions you quote were never going to be acceptable. Just trying to profit while looking like the reasonable good guy and failing. Like me offering to keep an eye on my neighbours house while he's on holiday in return for access to his bank account!

Merv, the EU would be very happy for an extension, just like Barney said, but the terms were never going to be acceptable to the the hard line brexiteers.

Especially if they believe made up numbers.

[oldbluefox]

Do you know what the true figures are Ken?

[Manoverboard]

Do you know what the true figures are Ken?

Of course he does

[Mervyn and Trish]

I wasn't intending to start a new leaver versus remainer how clever are you or how gullible or you row. Nor a new UK versus EU row. Merely commenting that it would have been sensible if we had been able to agree an extension without either side trying to use it for political or economic advantage.

[barney]

The Eu made it absolutely clear that we couldn’t have the ‘benefits’ without contribution.
And probably rightly so.
Had there been a pause without payment, other contributor countries would have said, now hang on.

[Kendhni]

Do you know what the true figures are Ken?

Nobody does because the situation has not arisen. Although in all likelihood the normal annual contribution (including rebates) would apply, so for 2 years that would be about £8-9bn per year (including rebates) - there is nothing to suggest otherwise.

I have seen some sites, and a drunk down the pub, bandy about a number of £100bn in relation to the UKs share, however that is pure sensationalism designed to appear to the fawning faithful. One calculation I saw based it on pro-rating each countries contribution to cover the the full amount of easing announced by the EU. That calculation however made an assumption that the UKs annual contribution to the EU is almost £19bn per year and even then, that would actually mean a total of £91bn (but hey why not round it up to £100bn to grab a headline or two).

However let's think about it more intelligently ... there are several factors in relation to this
- at the minute nobody knows how it would be calculated and whether or not rebates and other things would be included in the sum, assuming that it was based on net contribution then that means the UK governments contribution would be just over £50bn
- the full amount is probably based on a 5-10 year recovery, but the UK would leave after 2 years therefore it is logical to assume that it would be pro-rata'd down to that amount of time (so we would only pay between 20-40% of the amount had we remained a member for the full 5-10 years)
- the amount announced by the EU does not include the recovery costs related to the UK - that actually has to be added in (ranging somewhere between £75bn the government claims COVID has cost it so far and £300bn of QE issued by the government) .. alternatively it may be a pro-rata'd amount based on contribution. However based on a pro-rating system it would be logical to assume that we would then only pay a proportion of our own recovery, which again reduces the overall burden ... naturally the amount of recovery funding attributed to the UK would be be prorata'd for 2 years rather than the full recovery period (the UK would then pay the remaining full amount for its own recovery after the 2 year period)
- since it is a recovery program then one has to assume that some of that recovery spending would be made in the UK - again providing a net worth to the UK

However as I have already said the numbers are just made up and those with a vested interest will make them as large as they possibly can and then add a bit more. The above gives no direct numbers but tries to take a logical approach based on what we do know. There would be an amount to pay but nobody knows what it might be - it is nothing more than hypothetical.

[oldbluefox]

You present a more objective case around the cost to the UK had they taken up an extension to the EU but it does demonstrate as you rightly say "There would be an amount to pay but nobody knows what it might be - it is nothing more than hypothetical" as are all the projections.

[barney]

What is not hypocritical is the absolute fact that the Eu recovery fund is 390 billion in grants, non repayable and 360 billion in loans, these are repayable.
This is on top of what each individual country is spending.
This fund will be borrowed by the Eu and the debt will be collective.
Given that the vast majority of Eu countries are recipients, have a little guess who will be paying the debt?
Fortunately it won’t be us

[towny44]

I wasn't intending to start a new leaver versus remainer how clever are you or how gullible or you row. Nor a new UK versus EU row. Merely commenting that it would have been sensible if we had been able to agree an extension without either side trying to use it for political or economic advantage.

Let's just hope that the lack of any extension leads to some sort of deal being negotiated before the end of the year.

[barney]

Sorry, hypothetical not hypocritical although that may be a Freudian slip

[oldbluefox]

In the current pandemic climate I cannot see the German car export industry wanting to be hit any harder than necessary. It is in everybody's interest to strike a deal. It may ultimately end up as a compromise but I anticipate there will be a deal..........eventually.

[Mervyn and Trish]

They need to get Barnier out of the loop. He's just a career bureaucrat following a fixed brief and seems to have little if any room for initiative. If they told him to hack off his left arm he'd do it even if we said a little finger will do. Sense will come when national leaders come into play with their industrialists chewing at their ankles.

[barney]

In defence of Barnier, he is operating under a mandate of the Commission.
He doesn’t appear to have the dispensation to make decisions.
He is given the Eu stance on the ‘negotiation’
Things are about to change now they have realised that this hardball tactic is no longer working.
French fishermen are imploring Macron to change stance and negotiate according to Euronews yesterday.
Restricted access is better than no access, which is what they will have after December.
Eu car imports into the U.K. is worth about £84 billion a year.
A 10% tariff would definitely suppress sales although it would be welcome to the treasury.

[towny44]

In defence of Barnier, he is operating under a mandate of the Commission.
He doesn’t appear to have the dispensation to make decisions.
He is given the Eu stance on the ‘negotiation’
Things are about to change now they have realised that this hardball tactic is no longer working.
French fishermen are imploring Macron to change stance and negotiate according to Euronews yesterday.
Restricted access is better than no access, which is what they will have after December.
Eu car imports into the U.K. is worth about £84 billion a year.
A 10% tariff would definitely suppress sales although it would be welcome to the treasury.

It would certainly be a major boost to the Japanese and Korean car industries.

[Kendhni]

They need to get Barnier out of the loop. He's just a career bureaucrat following a fixed brief and seems to have little if any room for initiative. If they told him to hack off his left arm he'd do it even if we said a little finger will do.

So not much different to Johnson then.
Several of the EU countries have been trying to get Barnier replaced, they feel is he being far too soft.

Sense will come when national leaders come into play with their industrialists chewing at their ankles.

Sense and politicians generally do not go hand-in-hand, besides that Johnson has already shown his utter contempt of business ... but maybe now that he is in power and some civil servant has had a word in his shell-like he realises how much he and this country depends on it.

[Kendhni]

Eu car imports into the U.K. is worth about £84 billion a year.

Fact Check
https://www.acea.be/news/article/automo ... %20billion.

https://www.smmt.co.uk/industry-topics/ ... %20economy.

[barney]

I stand corrected.
£60 billion a year in vehicles and parts.
Loose change ?

[Kendhni]

I stand corrected.
£60 billion a year in vehicles and parts.
Loose change ?

Nope you still need to be fact checked.

EU exports
vehicles circa E38bn, parts circa E12bn is about E50bn which is about £45bn (+/- a bit since the article is a few years old)

On the other hand UK exports are
vehicles minimally E15bn, parts circa E4bn is about E19bn which is about £17bn (+/- a bit)

So differential is about £28bn, no small change, but the EU has to work out what to do with 11% of its production, whereas the UK has to work out what to do with 45% of its production (and 68% of its parts).

[towny44]

I stand corrected.
£60 billion a year in vehicles and parts.
Loose change ?

Nope you still need to be fact checked.

EU exports
vehicles circa E38bn, parts circa E12bn is about E50bn which is about £45bn (+/- a bit since the article is a few years old)

On the other hand UK exports are
vehicles minimally E15bn, parts circa E4bn is about E19bn which is about £17bn (+/- a bit)

So differential is about £28bn, no small change, but the EU has to work out what to do with 11% of its production, whereas the UK has to work out what to do with 45% of its production (and 68% of its parts).

Thanks to covid our car production has been hit far more than the EU, so the benefit to the UK is percentage wise probably even more than Barney's figures, so we will have to wait and see who blinks first.

[barney]

That article said that 27% of Eu car production was exported to the U.K..
Three in ten.
So nearly 30% to this country and the other 27 taking the 70% between them.
That’s less than 3% each.
That makes us a major customer.

[Kendhni]

That article said that 27% of Eu car production was exported to the U.K..
Three in ten.
So nearly 30% to this country and the other 27 taking the 70% between them.
That’s less than 3% each.
That makes us a major customer.

I think you are misreading. It says "less than 3 out of 10 cars made in the EU are exported (27.4%), with roughly one third of total exports heading to the UK (or 11.7% of total production)."

[Kendhni]

I stand corrected.
£60 billion a year in vehicles and parts.
Loose change ?

Nope you still need to be fact checked.

EU exports
vehicles circa E38bn, parts circa E12bn is about E50bn which is about £45bn (+/- a bit since the article is a few years old)

On the other hand UK exports are
vehicles minimally E15bn, parts circa E4bn is about E19bn which is about £17bn (+/- a bit)

So differential is about £28bn, no small change, but the EU has to work out what to do with 11% of its production, whereas the UK has to work out what to do with 45% of its production (and 68% of its parts).

Thanks to covid our car production has been hit far more than the EU, so the benefit to the UK is percentage wise probably even more than Barney's figures, so we will have to wait and see who blinks first.

I doubt if the slow down would have made that much of a difference to the differential (in percentage terms).
I have provided the facts behind the numbers, not some made up number, it is up to you to interpret those as you see fit.

[towny44]

Nope you still need to be fact checked.

EU exports
vehicles circa E38bn, parts circa E12bn is about E50bn which is about £45bn (+/- a bit since the article is a few years old)

On the other hand UK exports are
vehicles minimally E15bn, parts circa E4bn is about E19bn which is about £17bn (+/- a bit)

So differential is about £28bn, no small change, but the EU has to work out what to do with 11% of its production, whereas the UK has to work out what to do with 45% of its production (and 68% of its parts).

Thanks to covid our car production has been hit far more than the EU, so the benefit to the UK is percentage wise probably even more than Barney's figures, so we will have to wait and see who blinks first.

I doubt if the slow down would have made that much of a difference to the differential (in percentage terms).
I have provided the facts behind the numbers, not some made up number, it is up to you to interpret those as you see fit.

The data is out there Ken if you look. The UK production has been hit 35% more than the German car industry.