General Election June 2017

^

Trade realities expose the absurdity of a Brexit ‘no deal’
The UK has imposed a diversion of effort upon its partners at a testing time

No deal is better than a bad deal. That, as almost everybody must now know, is the position of the woman who is and would be UK prime minister. But this proposition is either empty or nonsensical.

Why empty? The deal the UK will have with the EU has to be worse than the one it has now: that is what Brexit means. Why, after all, would the EU offer better terms to a non-member? So, it will be bad. Theresa May’s proposition only has meaning if she indicates what sort of bad deal, in the range of bad deals, would be worse than no deal at all. But this the prime minister has not deigned to indicate.

Why nonsensical? For trade to continue after Brexit, there must be deals. Brexiters find it difficult to understand that the UK must co-operate with the EU, even after Brexit. Co-operation means deals. The question is not whether the UK needs deals, but rather which deals it must have.

Many seem to think that “no deal” would mean trading with the EU on “World Trade Organization terms”. The UK could in theory trade with the EU in the same way as the latter trades with the US. A series of posts on Conservative Home, a website for Tory activists, discusses what this might mean. But that analysis is done in terms of policy, not the likely effects on trade. The latter is far more relevant.

The UK would be leaving the world’s most integrated trading arrangement. We know that the deeper such arrangements are, the bigger their impact on trade. This is why trade within countries, the most integrated arrangements of all, is far greater than geography alone would suggest. A recent World Bank study argues that if the UK shifted from EU to WTO terms, trade in goods with the EU would halve and trade in services would fall 60 per cent.

Yet a shift to trading on WTO terms is not what “no deal” might mean. Trading after Brexit requires a great many deals on new administrative procedures governing certification of regulatory standards, customs processes and so forth. Trade requires not only such deals, but changes in procedures that would make them work, post-Brexit. So deals will not only have to be reached, but they must be done well before March 2019. In fact, it is hard to see how trade would continue to flow if these deals were not done by the summer of 2018.

Malcolm Barr of JPMorgan has outlined these issues. When the UK leaves the EU, its goods would cease to be “EU goods”. A new set of procedures would be needed to keep trade between the UK and EU running smoothly. Otherwise, the administrative burdens would become impossibly cumbersome. Such facilitation agreements exist between the EU and all its main trading partners.

One difficulty, notes Mr Barr, is that 25 per cent of UK exports to the EU by value go via Calais, which has limited capacity to process non-EU goods. Another is that, without a deal (or deals), UK drivers of heavy-goods vehicles would not be licensed to drive inside the EU. A well-known difficulty is the arrangements to handle the border inside Ireland. Particular difficulties will arise with trade in food and food products, chemicals and pharmaceuticals. Quite simply, continuing trade at anything like current levels will require a host of technical deals.

“No deal” is an absurd notion. To this, optimists will declare: yes, but it will be easy to reach agreement with the EU on such technical deals, because it is in the economic interests of the latter’s members to do so. To this glib optimism, I offer two answers.

First, the two sides will have little time to agree and then set up the new procedures. Above all, they cannot start until they know what to prepare for. The framework for post-Brexit trade will first need to be known. They need, for example, to decide soon that there will be no transitional arrangement if they are to shift early enough to WTO terms.

Second, it is ludicrous to presume that the rest of the EU will co-operate enthusiastically in creating the new trading procedures that are needed. Do Brexiters find it so hard to believe EU members would accept some costs in order to satisfy political objectives? Do they ever look in the mirror?

The UK has imposed a diversion of effort upon its partners at an exceptionally testing time. It has undermined the credibility of a project viewed as existential by many of its members, including its most powerful ones. Brexiters have poured ridicule and scorn on the whole venture. Now they imagine the UK can refuse the EU’s terms for an amicable divorce and yet still count upon active and enthusiastic co-operation in ensuring the smooth flow of trade.

The idea of “no deal” is just ridiculous.

And yet the FT is backing the Tories

Looks like the Daily Mail, Sun etc are stepping up their hatchet campaign.
http://www.bbc.co.uk/news/blogs-the-papers-40127957

Hah, they don't just have those idiots in Northern Ireland then ;)

Taking one for the team?

Craig Mackinlay (Con, South Thanet) has been charged with election
offences for the 2015 election campaign in the South Thanet
constituency.

https://twitter.com/britainelects/status/870573291630710785

Yes, many have added comments of that sort below the article (and the comments to the earlier article in which the FT backed the Tories were mostly critical).

Ha, good!

Was his a separate investigation?

A bit more info

http://www.cps.gov.uk/news/latest_news/cps-statement-election-expenses/

It looks like he is standing for South Thanet again in these elections. I would guess this news is unlikely to boost his chances! That could gift the seat to a Kipper.

Ah good good, only read the article pasted above, not the comments.

Tiered levels of praying with donations getting access to more of god's attention. Also multifaith.

Not so sure about the multi faith. The Tory party stands for good British values as advanced by certain sections of the Church of England. We don't want those forruns with their funny ways coming here and gaining the benefit of good British prayers. They need to integrate. Religious tolerance is not a traditional British virtue.

http://www.bbc.co.uk/news/uk-england-kent-40129826

But could that mean UKIP winning a South Thanet seat next week then?

Assuming people don't want to elect a crook (is he still eligible? Can they change the candidate this late?), I think Labour may be in with a shout. Especially if there is a Ukip-Tory vote split. Ukip (2nd) was only 8 points up on Labour (3rd) in 2015 with Farage as their candidate.

A very good post but it ignores a further issue.

At present we trade with a significant number of non EU countries based upon trade deals negotiated by the EU. These will go. The problem we have is not just with the 27 countries of the EU, but, in relation to various goods and services a far greater range of countries.

Of course these are the countries which the invisable Dr Fox is in charge of negotiating deals with. He cannot start until 2019. He has about 60 countries to do deals with just to get us into the position that were are in now.

Whatever happens will mean a great interregnum lasting many years if not decades. It will be destructive. Our economy will shrink.

Of course, the racists out there will like this situation as a failed economy will mean that no immmigrants in their right mind will want to come here and many others will leave for better opportunities elsewhere. We will also see the departure of home grown and educated talent, ridding the country of much of the despised liberal elite.

May may yet achieve in this country what Pol Pot failed to in his without the need for plastic bags.

Too late for a new candidate or else Nuttall would be down there like a shot. Probably ruing missing that opportunity while scaling Everest and winning the Giro.

lol

Seriously though, it's just more evidence of Tory hubris. Why would you put up a candidate being investigated by the police for fiddling election expenses?

Did anyone listen to Woman's Hour? I see Greening isn't the top story on the BBC, so presumably she had all of the numbers in the Tory manifesto memorized.

You can imagine some of the Kippers that have shifted to the Tories being quite impressed by his potential prosecution. In a "go on my son" way.

I wonder what Craig Mackinlay has done so different from all those other Tory candidates that weren't charged ? Has there been any suggest that this is something other than Battle Bus expenses ?

The page numbers ?

Here is a relatively small issue that affcts the work that I do in the insurance and reinsurance industry.

There are 500 insurers authorised by the Prudential Regulation Authority (PRA) and another 700 passported into the UK from the EU/EEA.

When the UK leaves the EU in February 2019, those 700 EU insurers will have to have taken action. They cannot just sit in the EU and ignore the situation. If they continue "to carry on insurance business" in the UK they will be acting illegally and subject to criminal sanctions.

They must either pull out or become regulated. Pulling out is not an option. Even if they ceased to underwrite today, very few classes of insurance business have no "tail" of claims. Some liability classes have claims tails that can last decades. They need to manage the run off of their business in a regulated manner.

To do this they must become authorised by the PRA. Before taking this step they will need to establish a subsidiary here. A branch office, although simpler, would entail a severe regulatory punishment in that it would require the company to carry twice the solvency margin that it would otherwise need thus making the operation a grossly inefficient use of capital.

Once a subsidiary is established, the PRA must approve it. This usually takes between two and a half and three years. Success is not guaranteed. The PRA has authorised three new insurers in the past four years. It would be looking to authorise 700 in the next 18 months. The government has said that the PRA must reduce its budget by 6% over the next four years. No new staff.

Once one has established a new authorised subsidiary, the next stage is to transfer the UK business from the parent to the subsidiary through a statutory portfolio transfer (Part VII Transfer). These can only be done within the EU/EEA. They will not be possible if not completed by the end of February 2019.

The new Solvency II regulatory regime came in in January 2016. This gave rise to a high demand for corporate restructuring to maximise solvency efficiency. The PRA informed the market that if applications were not made by January 2015, they would not be entertained before January 2016. The PRA is facing cuts. The Solvency II issue applied only to a proprtion fo the 500 UK authorised companies. The current issue affects 700 compamies.

Of course UK companies are also reorganising and establishing EU hubs. This has been simpler in that they are dealing with less pressed regimes in a variety of different companies. The Irish FSA has added 150 staff to thier team. Malta is gearing up. They will however need PRA consent for Part VII transfers out of their UK regulated companies.

In other words. In one relatively small area of one industry we have a clusterfuck. There are many other industries equally affected.

Tory candidate in Hove believes she cured a deaf man through prayer.

That's all very well, but really rather small beer compared to the evident fact that gay marriage causes floods.

https://www.theguardian.com/science/brain-flapping/2014/jan/21/how-same-sex-marriage-causes-floods

Perhaps his lack of connections :)

But don't forget that others (or was it the party itself?) got fined. A key factor in the overall outcome was that crap-ness of electoral law that made it difficult to take meaningful action. In other words, had the law been clearer/better, there could have been more prosecutions.

Watch C4 News tonight and I imagine you will get chapter and verse (as it was their investigation that started it all).

Actualy healng deafness is a better use of one's whackiness than causing floods; all things considered.