Blog : Brexit – will it happen?

Carole Nash Classic Insurance Specialists

Ian Nicholls considers the UK’s future within, and outside of, the European Union, following the General Election result…

Now that the dust has settled on the 2017 General Election, what does the result mean for Britain’s motor industry. Does it really face exile from the EU Single Market, or is everything up in the air?

Now I am no highly-paid political analyst, but here is my take on what has happened in the past seven years. The 2010 General Election exposed Britain as a divided country, resulting in a hung parliament. This in turn resulted in a Conservative-Liberal Democrat coalition government.

In the 2015 General Election, the Conservatives offered a referendum on EU membership as part of their manifesto. This was enough to break the political stalemate and gained the Conservatives a small working majority.

Nissan’s Leave-vote paradox

The 2016 EU referendum resulted in a 52 per cent vote to leave. Among the areas voting for leave was Sunderland, home of the Nissan plant and a solid Labour voting part of the country. Paradoxically, Nissan is a major exporter to the EU.

The 2017 General Election seems to have reverted to the status quo of 2010, a divided nation and a hung parliament. The Conservatives got 42 per cent of the popular vote and Labour 40 per cent.

The alternative view of the result is that 58 per cent of voters despise the Conservative Party and 60 per cent loathe the Labour Party. Jeremy Corbyn’s Labour Party is perceived as anti-business and the man himself has many dubious past associations while the Conservative Party is tainted with austerity amid a booming economy and endured seven weeks of criticism for its management of the National Health Service.

The political impasse

These factors and others have contributed to create a political stalemate. Theresa May called the 2017 General Election in the hope of increasing the Conservative Party’s majority in order to push through a Brexit deal without interference from the opposition parties.

It backfired spectacularly with the Conservative Party losing its majority. The Conservatives were forced to make a deal with the Democratic Unionist Party in order to cling on to power.

This means that Parliament will be able to veto whatever deal the Government comes up with, and maybe they will. This could lead to a lack of inertia and indecision as the politicians argue over soft or hard Brexit, and whether Britain should pay £90 billion or some pie-in-the-sky figure as part of an EU divorce bill.

Delays mean frustration

Whether a Brexit deal acceptable to all is agreed is up in the air, and any delay could lead to further frustration with the political process, even though the current state has been arrived at through democratic means.

For the British motor industry, the failure of the Labour Party to come anywhere near a majority probably came as a relief for two reasons. The party planned to embolden the Trade Unions, which probably caused nightmares about a return to the dark days of the 1970s.

Also Labour planned to raise Corporation Tax to fund its spending programme. A fair enough policy one might think, unless one takes an alternative slant on things.

And where does that leave us?

Low Corporation Tax could be looked on as a bribe to persuade major international companies to remain in a post-Brexit Britain instead of relocating to within the EU Single Market. All those shiny big Japanese-owned car factories were not built here just to sell to the UK market, they were put here to sell to Europe.

So the nation has decided. It does not want to be part of the EU, but does not want any one political party to have the mandate to push it through. From my point of view, it looks like a total shambles, and all of it self-inflicted through democratic means.

So, where does that leave our carmakers now?

Ian Nicholls

Born in Bedfordshire but now residing in Norfolk, Ian Nicholls is an ardent BL enthusiast. Currently he owns a Jaguar and two classic Minis. A stalwart of the Norfolk Mini Owners Club for nearly a decade he is an enthusiast for all things Issigonis. A stickler for historical accuracy he has recently performed the marathon task of mining the online newspaper articles for all BMC>MG related stories. Ian is unable to help with technical queries – he pays other people to fix his cars!

63 Comments

  1. Well, it’s an uncertain area. I reckon there are three types of car maker in the UK now: major manufacturers; small nice manufacturers; and JLR.

    JLR is different because it trades partly on British heritage, and because its R&D is done in the UK. Unless they are taken over by a company with an overseas R&D base, they will want to maintain and build on the massive R&D investment they have put in at Gaydon and Whitley. But they could take some manufacturing off-shore, starting with the new plant under development in Slovakia. They will do this if its cheaper to do so, which probably means that there need to be low or no trade barriers.

    Vauxhall, Toyota, Nissan and Honda and Ford (engine plants) are all vulnerable. They don’t rely on British heritage for sales, so there’s no reputational benefit to staying here of trade barriers come in when we leave the EU. They will seek compensation from the Government in return for staying here, and Nissan appear to have achieved that last autumn. A Government with a small majority (and the prospect of having to ask the electorate for another mandate if that majority disappears) will feel under pressure to help them out, or risk losing votes in constituencies close to the plants in question. So it’s a political decision that will persuade them to stay or go; without Government help, and trade barriers coming in I suspect that at least some of these will go in the fullness of time.

    Then there are the small companies – Lotus, Morgan and the like. I suspect they’ll stay because moving anything abroad would be such a major operation; and because, like JLR, they trade on British heritage. And they probably have some price elasticity – they could probably charge a bit more for product to compensate for trade costs without losing too many sales.

    There is a further factor, though – the value of the pound is falling against the dollar and euro. That makes UK products cheaper in export markets. That could compensate for trade costs and make it more likely for the investment in the UK to be maintained.

    So we’ll have to see. Don’t rule out another election; more uncertainty, and the decisions of Government to make Nissan-style aid to the bigger companies will be significant.

  2. My Opinion.
    Brexiteers will be disappointed. England will go a Norway route. End result? England will be in the EU in ALL but name.

    Brilliant idea to use the Quashqai as the photo, because this explains everything. Firstly, England’s biggest exports are cars, followed by banking – cars made by foreign companies – and the Quasqai is the biggest single model exported.

    What do you know about the motor industry? Well, the engine is the most expensive component. Second most expensive? The floorpan. So, The Quashqai is the biggest seller. It’s floorpan is the Renault Megane’s. The Renault Megane is made in France. Sharing the floorpan means there are OTHER factories in Europe which do NOT require expensive re-tooling to build this vehicle. Ergo… Nissan can EASILY build this product in the EU. That’s too risky for the politicians.

    Game over Brexit.

    Other things to consider:-
    A ) If you buy a MINI in Europe, the crankshaft will have crossed the English Channel seven times (x7). Imagine doing that – will a Customs and Excise Stamp required?

    B) 75% of the components used in English-made cars are from the EU. There is very little English supply industry.

    And then there’s the banks…

    I am truly amazed things have gotten this far, but rest assured a fudge will be made.

    Norway it is then. Or bankruptcy brought about by loss of car exports and relocation of banking sector. It’s really that simple.

    • Interesting, please explain:

      A ) If you buy a MINI in Europe, the crankshaft will have crossed the English Channel seven times (x7). Imagine doing that – will a Customs and Excise Stamp required?

  3. “Corbyn’s Labour Party is perceived as anti-business and the man himself has many dubious past associations while the Conservative Party…”
    ============================

    Well, The Tories are doing a deal with the DUP. A member of the DUP’s MP father was arrested in Paris trying to sell anti-aircraft missiles to White apartheid South Africa.

    They have links to British Terrorists in the form of Ulster Resistance. Ulster Resistance imported hundreds of guns from South Africa. Those guns were divided up between other terror groups and were used in the murder of over 230 people in massacres such as the Greysteel and Loughinisland massacres. Ulster Resistance shared its guns with the UFF and UVF groups:

    https://en.wikipedia.org/wiki/Ulster_Resistance
    https://en.wikipedia.org/wiki/Loughinisland_massacre
    https://en.wikipedia.org/wiki/Greysteel_massacre

    Strangely, The Daily Mail and the Sun do NOT report this:

    https://www.youtube.com/watch?v=ZSAWLo9OJXg

  4. Don’t know about Sunderland, but at the moment Swindon sends most of its export cars to Russia, not the EU!

  5. One thing the various naysayers say when banging the “Brexit, you’ll be sorry drum” is that XX% of UK product production goes to the EU. The quoted figures could be very true.

    However, I have yet to see a single naysayer mention the fact that those figures are very heavily “remainer” loaded to present a fake and distorted impression. How come? Simply because the UK is still part of the EU so… Hence if, say, 60% of product goes to the UK, it still is included in the trading totals for the rest of the EU as a whole. Forked tongue statistics.

    As the writer clearly states and I know from my own observations over recent decades, when those manufacturers here which are foreign-owned and controlled have previously intimated, when it suits them, they will be gone. Most if not all have done that over the years.

    The thing is though, they will still want to sell their built-elsewhere stuff here to take advantage of usually fatter profit margins. On past form, this Nation will no doubt still allow that.

    I still believe that, despite some dilution in recent decades, the people of the UK still have sufficient quantities of the right stuff to not only survive outside the parasitical womb of the EU, but to actually thrive too. The impatient will have to understand that this cannot happen overnight. It will take much time. For numerous reasons, the mythical “soft Brexit” was never a remote possibility. I still believe, human nature being what it is, most if not all the twenty seven other EU members will make it as difficult as possible for the UK to at long last sever that parasitical one-way umbilical cord to the EU.

    This nation has faced and survived huge problems and troubles in the past. We can succeed again but, it means every single individual in Team UK will have to do their bit and some will have to go that extra mile.

    Every time I park one of my MGs or Rovers in the supermarket car parks, I am saddened to see that my one is invariably the only one there in the sea of cars not manufactured in the UK.

    It’s what we do .. maybe did since June 23rd last. The times they are a changin’… of necessity and so will the mindsets of a large number of Brits.

    Interesting and worrying times ahead for us all, apparently…

  6. It’s 1974 again, the last time we had political deadlock and a minority Government determined to battle on. ( 2010 was different, the Tories could rely on a coalition with 57 Lib Dems that could easily beat the other parties).

    Now with the support of 10 not very reliable DUP MPs, it’s a case of not how, but when will Theresa May’s Government collapse and already angry MPs are muttering about leadership challenges. I can foresee another General Election later this year and either a May Government with a tiny majority or Labour scraping in.

    • I suppose there’s one good thing over `74, we don’t have a verified child abuser in charge..

      Oh wait…

      And you can expect food to get a lot more expensive – the Umbridge has put Gove in charge of agriculture..!

  7. I think you will find that all the areas with major motor manufacturing plants voted to leave the EU, even if employment depended on it.

  8. For me, all bets are off. Like him or loathe him, Corbyn has woken a whole new generation to politics. We’re in for interesting times.

    • Corbyn did awaken a new generation of voters but only out of self interest.
      Just as some people vote Tory because they want low taxes, the youth voted Labour because they wanted zero tuition fees so they can get degrees to enable them to get well paid jobs with the big corporations that the Corbynistas so despise. They couldn’t be bothered to get out of bed to vote in the EU referendum, and it was their future that was at stake.

      • I haven’t seen anywhere Corbyn saying earning a decent wage is a bad thing.

        Neither that an educated majority that is able to compete in the global market is a bad thing either.

        Not sure which “big corporations” you’re alluding to. All of them? There’s a fair few out there.

        Most people just don’t want debt hanging over their heads the rest of their lives. After all everyone is saying you need a degree to compete these days, regardless of the truth, that’s what students believe.

        Corbyn is interested in taxing them because it funds the social programs like the NHS and Police. Not because he generally hates people working for a living. That’s a contradiction in terms.

        A poll by YouthSight found student turnout to be 87% with a 6 to 1 vote in favour of remain. That’s pretty much as good as you could hope for in the circumstances.

    • Ten years ago, young people were more likely to vote to evict people from reality shows than in elections. Now it seems the snowflake generation are the most politicised since the Eighties.

      My niece would rather vomit than sit in front of something like Big Brother, which she regards as braindead drivel dreamt up by the Tory media, regards clubbing as so last decade, football as a game for racists and homophobes, and drugs and binge drinking as for losers.

      It’s like the whole politically apathetic, hedonistic youth culture of the Nineties and Noughties has been turned on its head and many of her friends feel the same.

      • You didn’t read the Discworld books did you? “May you live in interesting times” is an Agatean(Chinese) curse. Interesting times in classical China included a punishment called the “ninth degree”. Basically find a criminal, find all the links to him up to 9 levels and kill all of them, their kids, families and possibly the family dog, to drop the hint that just possibly the emperor is unamused. A punishment that I suspect would be useful against home grown terrorists (you’d only have to do it once I suspect).

        I’d happily support the thing with the razor wire undies in relation to May… And is anyone else uncomfortable with giving right-wing former terrorist homophobes and misogynistic godbothers control in the English Parliament? Irish in power in Westminster – talk about irony, there’s so much sloshing about we could bottle it…

  9. Just at present we seem to have an ultra right-wing minority in the Consevative Party wagging the dog – hence the “hard” Brexit bit. I suspect that Brexit has more to do with keeping the Conservative Party together, rather than the national interest.

    I just wonder if the Labour Party will now publish a poster of Arlene Foster (the DUP leader) with a diminutive Tersa May in her top pocket. Just as the Consevative Party did in 2015 with Alec Salmond and Ed Milliband.

    What goes round, comes round!

  10. Now that Morgan is the largest actually British-OWNED car company, the foreign owners of all the others are probably hoping the pound continues to slide. This will make British-made products cheaper and/or more profitable to sell overseas. However, so many of their components come from Europe and that might mitigate the effect as the imported components increase in price. (Are there any transmissions still being made in the UK?)

    Provided that reasonable access is retained to the Eurozone, other foreign car companies might be willing to invest in UK manufacturing as its cost basis falls. Maybe JLR’s new plant in Eastern Europe won’t have as much of an advantage cost-wise after all?

    And don’t be too worried about strong unions. Someone has to try and increase wages for ordinary people, not just bankers and property speculators. Strong unions don’t seem to be hindering BMW, Mercedes-Benz or Volkswagen much.

  11. This was the strangest of the 15 General Elections in which I have voted. In the first place, it was unnecessary. Secondly, the catastrophe which befell the SNP was unforeseen. Thirdly, many seats which changed hands appeared to do so on local issues. The overall result is that we have uncertain political times.

    I doubt, however, that the Labour Party, fragmented as it is, will have much enthusiasm for another early election because its funding must now be in a very parlous state and, more to the point, many of the seats it gained were gained with wafer thin margins, and whether those could be repeated successfully in an early re-run is very doubtful.

    In any event, I’m not sure that a weak Government is a bad thing. The whole Brexit argument turned on too much state interference, and the weaker the Government’s hold on power, the less interference there is likely to be.

    • Excuse me, but I foresaw the SNP’s fall from grace; largely because most Scots realize that the EC would not accept a newly-independent Scotland as a member until they had, say, five years’ audited national accounts. Meanwhile, said national accounts would be depressed by the necessity to start every national institution they would need or desire, from an Army to a Patent Office. The latter would, of course, need a body of staff who were fluent in Gaelic to accept applications in that language, just as the current office in Newport accepts applications in Welsh.

      • SNP still have a majority of Scottish MPs. Tactical voting reigned supreme in Scotland, Tories gained 64,000 new voters that delivered 12 new seats, 54,000 of those votes were LibDems ‘lending’ their vote. It was a Union Jack surge. Like all tactical voting ploys it only works once, expect the Tories to lose some of those seats at next election. The SNP’s 56 seats was an exceptional one-time result but I can see them gaining and holding 40 seats in the future.

        Remember, Scotland still voted to Remain in ALL constituences.

  12. Now I am going to throw in my own manifesto to stir things up!

    In my view the current impasse was arrived at because the British people want better public services, but don’t actually want to pay for them.
    To some people the solution is to raise Corporation Tax, but that risks upsetting the golden goose that is driving a booming economy. Perhaps the real solution is to change the attitude of the British people.

    The British Government is bankrupt, but the British economy is the fourth largest in the world. The politicians have lacked the courage to tell voters the truth, to busy pandering to the middle class vote to address reality. If you want a better country, we are going to have to start paying for it.

    In my view Britain needs a separate National Health Service Tax in addition to the existing taxes. Britons need to be re-educated into the need to provide adequate healthcare for its citizens, particularly as the post-war baby boomers are now reaching old age. Some of the generation who wanted to change the world in the 1960s now can’t even change their underwear. Such a tax should be seen as a moral obligation, an honourable thing to pay, not a burden.

    There will be those reading this who say we pay enough tax already. Do we really?

    We live in a country where we can find the resources to buy millions of Chinese-made smart devices, often one for each family member, regardless of youth. We live in a country where subscription TV proliferates, where the launch of a new computer game or gaming platform is a major event. We knowingly enrich tax-avoiding corporations because they use the capital they don’t pay in tax to reduce retail prices.

    We knowingly buy goods made in Third World sweat shops because they are cheap. Low wages and zero hours contracts exist because we want something for nothing and we don’t care who suffers as long as it is at a bargain basement price – a something for nothing culture that values personal gratification over healthcare for all. Yes, I think we can afford to pay more tax.

    So, shoot me down in flames!

    • Spot on, I say! You only have to watch an episode of Benefits Britain to see the reality of our skewed priorities. The latest smartphone or food on the table? Immaculate, professionally-painted nails or pay the gas bill to keep the children warm? It should be a no-brainer. If we paid into the NHS a fraction of what we spend on material goods for our own gratification, we’d solve the financial strain on our crippled health service overnight…

      • If a company faces increased costs, it passes them on to the customer. If the Government faces increased costs, it imposes austerity.

    • No intention to shoot you down in flames because I agree with much of what you say. And whilst this might seem like I am arguing with you, that is not my intention. More like a different viewpoint that leads to more or less the same position.

      So…

      Raising a fair Corporation Tax is sensible and appropriate because business operates within society and benefits from that position. If it doesn’t pay a fair share of the cost of running a society, then the infrastructure, education system and other public services that employees need are not there. Business needs happy, healthy and educated employees – all qualities that cost. If CEOs can’t see that, they are vampires sucking the life out of society.

      And business is not a golden goose driving a booming economy (see; https://www.theguardian.com/business/2017/jun/08/uk-economy-falls-to-bottom-of-eu-growth-league). No booming economy. The UK is the bottom of the EU growth table in early 2017 with growth of just 0.2%. Even Greece – yes Greece! – had better growth at 0.4%. As you know, figures are often reviewed later so these might not be definitive, but they aren’t encouraging.

      The British Government is not bankrupt. A more enlightened person could give you a better explanation of bankruptcy, but I believe the term applies when debts cannot be met as they fall due. The UK has no problem paying its debts and the Government continues to borrow additional money. In fact, the total public debt has increased consistently and greatly since 2010 and will continue to do so. It now stands at 86% of GDP (see; https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/apr2017) which is not unmanageable and not as high as some other wealthy countries (see USA and Japan).

      I think what causes confusion here is that Cameron and Osborne went on so long about the deficit (the difference between revenue and spending) and the need to get it down, that people believed them without recognising that total debt has grown enormously. Mostly, I suggest, because although the economy was growing when Cameron came to power in 2010, Osborne promptly caused a recession and set us back. Thus we got austerity and the complete disaster that has caused and that probably encouraged people to mistakenly vote for Brexit.

      It all looks like disagreement so far, doesn’t it? But I really agree with you that we need to pay enough taxes to have the sort of country we want to live in and the sort of NHS we desire. For the past 40 years we have been told a complete load of *******s that led people to think that taxes were evil and less tax would mean a better personal situation. Well, that was only for the wealthy, not ordinary folks who are almost always dependent upon public services – such as the NHS – in some way. And I also agree that paying taxes is morally correct and honourable. I loathe wasted public spending (like so many failed Govt. IT systems) but do not accept that all public services are wasteful. But yes, I know that some are.

      However, I don’t agree with a specified tax for the NHS. Although I think that would be palatable to the nation, I fear that it would still leave people to think that other taxes are unnecessary and should be cut. Just as there is no such thing as a free lunch, the same applies to necessary public services. Unfortunately, we often think services aren’t necessary until we need them personally, and at some point we all rely upon them. Tax is tax – we have to pay our fair share of as much as is needed. No need to dress it up.

      I also agree with your final paragraph which I would roughly sum up as being that individuals often act selfishly, but expect everyone else to act selflessly. Although, if you are on minimum wage with a family, I suspect it is difficult to be selfless and pay the child in a sweatshop, that you will never see, more. If everybody was paid what they are worth in secure employment they would probably be more willing to pay the Third World a fair price to a better effect.

      But my last point is to disagree that corporations use unpaid tax to reduce retail prices. Like hell they do – they charge every penny you will pay, and then avoid as much tax as they can.

      So, hope I haven’t caused offence by disagreeing because debates are better than arguments and I think we’re on the same side.

      • Thanks for your thoughtful reply.

        I argue that a separate NHS tax would be more transparent, that it would be harder for the Government to cut. At the moment NHS spending is buried in the mass of government expenditure, and what HMG spends is open for dispute.
        Perhaps we need the NHS itself to tell Parliament what it needs and a tax set accordingly.

        As for Corporation Tax, we have to remember that many big employers do not have to operate in Britain but choose to. We cannot afford to antagonise organisations that can up sticks and relocate elsewhere, particularly after the Brexit vote. We have had to bribe these big corporations through grants and incentives to set up here and we can’t afford to treat them like a permanent fixture to be bullied and bludgeoned into funding a new Jerusalem for the rest of us. I for one do not want to return to the mass unemployment of the 1980s.

        There is no such thing as a right to work, but there is a right to unemployment benefit.

        • I don’t think I’m suggesting that corporations should be bullied, but neither do I think they should be so powerful that they can bully nations and demand ever more favourable terms. If there is money to be made in this country, whatever the conditions, corporations will come. If X doesn’t, then Y will.

          But we want respectable firms with good governance that pay good wages and pay their appropriate taxes, so we need to create fair conditions. Ultimately, I think it has to be clear to all organisations that elected governments and the rule of law run the country for the benefit of the whole populace. If corporations want to be a part of our society they are welcome if they play fair. For too long the bias has been in favour of capital at the cost of the population and that isn’t fair.

          But I suggest we are both heading to the same place, just quibbling about the route.

      • On the other hand Ireland has a CT rate of 12% and their economy is booming, attracting international businesses. Is it not better to attract new business paying 12%, rather than drive the existing ones away (to Ireland for instance) if the UK charged 26% per Labour?

        • Well, Ireland was desperate to bring business in so they set a very low rate, but if every country bids lower, then nations lose and corporations prosper unfairly. Yes, it does seem to have worked for Ireland but I suggest it also supports my point above that some corporations avoid, usually legitimately, as much tax as they can.

          I suggested a fair rate. What that is, I don’t know. But when individuals who are liable for tax pay 20% and upwards, is it fair that corporations pay a lot less? Some say that low CT rates encourage business to invest, but that doesn’t always happen. They often just bank the cash in favourable locations to avoid tax.

          When it comes to attracting business I suggest tax rates aren’t the only factor. The rule of law, educated populations and good infrastructure are probably just as important. All dependent upon public provision that has to be paid for through taxation. As Ian Nicholls said above, paying tax is a moral and honourable commitment. Ordinary working people have no option but to pay their income taxes as set by government, so it seems unfair if powerful corporations think it is optional. Remember Starbucks and others from a few years ago. If they make profits in a country, they should pay the correct taxes in that country.

          And when things go wrong, who do corporations – like the banks – turn to? Even pensioners and unemployed people on benefits, who pay tax through VAT, helped the banks. Those same ordinary people who have carried the greatest burden under the austere regime of the past few years.

        • Yes, Gordon shot himself in the foot with that expression. It has haunted him ever since.

          But he didn’t cause the recession in 2009 (that was the sub-prime crash in the USA) and it was over by the time he was ousted in 2010. Whether that recovery would have lasted, I don’t know.

          Osborne inherited a growing economy in 2010 and then promptly put us back into recession in 2011/12 because of his budgets. He didn’t slow the recovery, he killed it dead. See: https://www.theguardian.com/business/2012/apr/25/uk-recession-recovery-timeline

          And since then, the recovery has been very slow. Since 2010 they have made a right mess of things.

    • I think what people would also like is a little less inequality. For various reasons, I have never managed to advance beyond low-paid work for small employers and have spent my working life living like a student. When I was young, the well-off had bigger houses and drove foreign cars, but that seemed to be about it. Now, the difference between my lifestyle and that of someone in a ‘good’ job is mind-boggling. I do have a smartphone, but it’s over 3 years old and secondhand.

      • There are very many in your position. It has become very obvious that the current klepto-corporate capitalist system is unsustainable due to its unfairness to the vast majority of participants.

        The only trickle down from the wealthy that we were promised that would be ‘a tide that raises all ships’, appears to be suspiciously yellow and not gold unless you are one who likes your gold in a shower. The Anglo economies went further along to the neoliberal extreme than many other economies and, after 50 years, we can all see it hasn’t worked.

        Much of history shows that a vastly privileged minority lording it over a huge number of dispossessed leads to the elite having their privileges revoked and their properties taken, by force, if deemed necessary.

    • No arguments here, but there’s a simpler way. MAKE corporations pay tax, no loopholes, no mucking about. Pay in the UK, in good time and good order or don’t trade here. Stop the tax havens garbage and if you leave the UK to avoid paying your part (usually millionaires and the like) don’t bother coming back, because we know about compound interest and we like 35% on monies owed, how about you? Payable up front, of course…

      And as for the submarines running Windows for Warheads… What could possibly go wrong?

      I feel sorry for the NHS, it was monumentally shafted from day one, but it doesn’t help itself employing cretins whose IT experience amounts to “can’t code, can’t think, can handle a mouse a little” – or let employees wander off with lock down passwords to work in UAE… And then employ 5 contractors at £100/day for MONTHS doing nothing because they lost the password, lost the guy,s phone number and, as a result, *every single machine* can’t be updated because it’s locked up tighter than a Texan preachers rectum.. £2500 a week combined to do nothing, for weeks, and the NHS complain about money?

      Dr. Pot, meet Mr Kettle…

  13. I have always thought that Brexit is an easy and lazy, possibly even cowardly, solution – if part of a group where the rules are unfair or corrupt, you should do your best to expose what is wrong and work very hard with fellow-minded members to get it put right, not just petulantly throw all your toys out of the pram and run away to an uncertain future. Not that we have ever fully been in the EU, eg in the Euro. I bet de Gaulle would have been laughing at this whole business…

    I suspect that, if rerun today, the vote would not be 52:48, given what we now know, and that leaving the EU seems to be putting us into bed with increasingly politically extreme and unpleasant trade fellows such as the US and Turkey while the Government again ignores our more traditional Commonwealth partners such as Canada, Australasia, India, South Africa, etc.

  14. This is so much like 1974, although mercifully without the Energy Crisis, and things feel similar in many ways, wages not keeping up with prices, a polarised political culture, a paralysed Government and a them and us culture (this time more extreme as the super rich seem to be doing vastly better than everyone else). It’s interesting that I see more young men with long hair and one 20 year old I know liking progressive rock, a music genre that was very popular 43 years ago.

    I wonder if we’ll see another election and, as in 1974, Labour scrape in to power on a promise to solve all the country’s economic ills. No doubt this Government will manage to hold itself together for 5 years as the 1974-79 one did, possibly Corbyn stepping down due to old age and some discontent over policy failures and being replaced by a centrist like Keir Starmer, until a crisis like a Winter of Discontent or a badly thought out Brexit brings them crashing down in 2022.

    • I think Labour have peaked. If Corbyn was going to win power, he would have done so on Thursday. The Tories ran an inept campaign, they won’t make the same mistake.

      • It depends if the Tories turn into a lot of bickering factions like they did in the 1990s, over having to jump into bed with the DUP.

        If all of Labour get behind Corbyn or a more mainstream leader comes in things could get very interesting.

      • I voted Labour, mostly due to wanting to have a change than being a socialist and a Corbyn enthusiast, but think a more centrist leader like Dan Jarvis could win it for Labour next time. Also Labour were let down by the incompetence of Diane Abbott, who will probably be demoted.

        It’s probable Labour’s surge in support was due to two things: the youth vote, which can be very fickle, and the collapse of UKIP. Also Theresa May’s embarassing campaign didn’t help and Labour’s more moderate than expected manifesto could have won some voters over.

        • The problem with the Labour Party (apart from the fact that the front bench at the moment behaves like a bunch of proto-communist commissars) is that every single Labour Government has ended with the country on the rocks financially.

          Whilst the long post by Biggles is interesting, deficit financing cannot be indulged in long term without very, very unpleasant consequences, usually of an inflationary or in its worst form a hyperinflationary nature. The most recent and catastrophic example of this is Greece. Whilst this lot of Conservatives are hardly the most inspiring, at least they have recognised this.

          • 1951 – we had half the country in darkness half the time – it was called “load shedding” ; we could not afford food from abroad because essentially the nation was bankrupt, hence rationing even of staples was still in full force

            1970 – strike after strike after strike, and worse still the start of the enormous inflation in house prices. It is fair to say that this certainly was not tackled, and may even have been added to, by Heath’s administration, but it was the Wilson Government which started the rot.

          • I don’t think it is really fair to say that every Labour Government has ended with the country on the financial rocks. If you look at the chart here: http://www.economicshelp.org/blog/7568/debt/government-debt-under-labour-1997-2010/, you can see that debt as a % of GDP actually fell under Tony Blair and Gordon Brown between 1997 and 2002 before beginning to rise again.

            But even then, it didn’t reach the level that had been left by the previous Conservative Government that ended in 1997 until 2007/08, when the consequences of the financial crash kicked in. By the end of Gordon Brown’s premiership in 2010 that same chart does show a huge increase in debt, but if you see here: http://www.ukpublicspending.co.uk/uk_nationl_debt.php

            You will note that it was even higher at the end of David Cameron’s first Government in 2015 and I expect yet higher when Theresa May’s term was renewed last week.

            As I said above, the economy was growing – although not at a rapid rate – when Alastair Darling left No 11 in 2010. And that after the most serious recession since the 1930s. But Osborne’s cure has given us another recession, 7 years of austerity, fallen living standards for many and a vastly greater public debt – but that remedy has still not eliminated the deficit. It is true that the deficit has to be remedied sooner or later, but after 7 years of a supposedly competent economic party’s rule, we are at risk of stagflation that would make things worse.

            And, of course, the crash in 2007/08 was not the consequence of the Labour Government’s policies. The cause was in the USA and the sub-prime mortgage market that led to the bankruptcy of Lehman Bros.

            If the deficit was the only measure of success you could say that that things have improved since 2010. But if you look at the total national debt, debt as a % of GDP, rate of inflation, living standards and economic growth at this point, then things are worse. Although it is true to say that employment is up and unemployment is down.

            Public services are in a poor state and the interest payments on Government debt are now more than twice as much as they were in 2010. See: http://www.economicshelp.org/blog/3028/economics/interest-payments-on-uk-debt/

            On the whole, I think the rocks we are on now are worse than 2010 and we are just beginning to see some adverse consequences of our impending Brexit.

            What the future holds, I don’t know. But if you could choose where to start, would it be from the end of the last Labour Government in 2010, or where we are now?

        • A bit unfair on “dribbling Diane” since it turns out she’s just been diagnosed with fairly serious diabetes and untreated the hypos and hypers can turn even a fairly sane politician into a Bobbie Mugabe (although, in his case, it’s suspected neurosyphilis).

          I’ve always wondered what would happen if Vince Cable was PM, I’ve always had a soft spot for him, on the basis he’s the only sane person in the whole mess…

          As for May, I’m tempted to channel Cromwell: “You have tarried far too long for any good you’ve been doing, in the name of God, go!”

          • I think “dribbling Diane” is a fair and just description of Diane Abbott. You seem to forget Theresa May has Type 1 diabetes, much more serious and difficult to control than Type 2.

            Diane Abbott’s performance was a joke and demonstrated how incompetent her and the rest of the Labour Party were with their policies which depended on growing money on trees.

            I was waiting for Diane Abbott to make a victim plea for her performance and was not disappointed.

          • Well, I don’t think it is fair to denigrate Diane Abbott if she was poorly, and the comparison with Theresa May seems unreasonable to me.

            I am not a fan of Diane Abbott and have been critical of her performance. But if she has been suffering from an illness, then those poor interviews might be more understandable. Having said that, I’m still not convinced that she could be front bench material even when well. But I wish her no harm and hope she gets her diabetes under control.

            Comparing her to Theresa May is interesting, though. Theresa May’s performance during the election campaign was dire. She wouldn’t or couldn’t give a straight answer to questions, but offered only some meaningless word salad (I apologise for that term – couldn’t think of anything better offhand) that was deliberately uninformative and, frankly, implicitly insulting to the electorate.

            But also, in her own words she set out her own pass or fail mark: “The cold hard fact is that if I lose just six seats I will lose this election, and Jeremy Corbyn will be sitting down to negotiate with the presidents, prime ministers and chancellors of Europe.”

            Obviously JC isn’t the PM, but, in seven weeks of campaigning, she managed to turn a 20 point lead and anticipated landslide into losing 13 seats. A 12 seat majority to a minority Government that is now scrabbling to create a coalition with the DUP. And remember, she was opposed by probably the most reviled Labour leader since Michael Foot.

            She is now a diminished Prime Minister and lacks the credibility she asked for to negotiate with the EU.

            So, it was Theresa May’s decision to hold a snap election, she did so because she thought the conditions could not be much better and she was the main focus of her campaign. Aside from her own assessment of her own failure as described above and her later admission of that failure when she told the 1922 Committee that she got them into the mess and she will get them out of it, I suggest that by any objective standard that is a greater display of incompetence than Diane Abbott’s public embarrassments.

            Although in fairness, I don’t know whether Theresa May’s diabetes was troubling her – if it was then she deserves some understanding, too.

            (Incidentally, my apologies for this wordiness. A bad habit.)

  15. Modern manufacturing is highly international, with factories all over Europe and indeed the world. If you go to a Fiat showroom for example, the 500L is made in Serbia with the new Tipo comes from Turkey. Ford Transits now come from Turkey, while the horrible EcoSport comes from India. All these vehicles will incorporate parts from all over the globe.

    I assume Serbia and Turkey have custom/tariff free deals with the EU? There’s certainly no free movement between Turkey and the EU…

    • The trend towards internationalising car production started in the Seventies when Ford and General Motors homogenised their European products to cut costs, and also strikes in Britain saw production moved to Belgium and Germany.

      Nowadays, Vauxhall only produces the Astra in Britain, with most of the components being imported, and its other cars are made in South Korea, Germany, Spain and Poland. On the other hand, the supposedly German Volkswagen AG sources the A1 and some Golfs from Belgium, the Polo from Spain, the Touareg from Slovakia and the TT from Hungary.

      • Yes, built cars and components are sourced from across the globe these days so it’s impossible to identify a truely British/German/French etc. car. Perhaps JLR, though?

        I understand that Ford build the Focus saloon in St. Petersburg – probably why I saw so many Russian Police Focuses when I was there 3 years ago.

    • The Turkish plant built facelifted Cortinas locally until the mid 90s.

      From what I’ve been told from a Transit driver, the new model doesn’t feel as well built as the previous model. He’s had it in for silly things such as the door latch breaking, causing the rear door to smash against the bodywork, front bumper sagging, interior trim issues.

      They also now export the Transit and Connect to the US. However due to an old “Chicken tax” law which ironically was implemented to protect Ford’s domestic commercial vehicle output from the likes of VW and Japanese manufacturers, they have to be shipped with seats as passenger vehicles, then converted in a plant in the states by destroying the extra seating.

  16. Well, having spent a while re-reading Ian Nicholls’ article and the interesting discussion that has prompted, here are a couple of additional points:-

    1) The real question here should, perhaps, be not “will Brexit happen?” but “can the UK actually afford Brexit?” That, by the way, needs to be asked both in the economic context and in the light of the reputational damage which has arguably already be done to the country’s diplomatic standing.

    2) Interestingly, the General Election result has prompted a renewed debate within the legal community about whether there is a legal flaw in the European Union (Notification of Withdrawal) Act 2017 which might mean that no legally-binding decision to leave the EU has been made. See this article:

    On whether and why the Article 50 Bill is flawed, Jolyon Maugham QC, Waiting for Godot, 14th June 2017

    Maybe, just maybe, someone somewhere in Government or, more likely the Civil Service, left legal “wriggle-room” for an “exit from Brexit” strategy…

    • Ooh… That’s a thought! Diana Trent (Waiting for God) as a Brexit negotiator…

      I’d PAY to see that, even better Jeffrey’s deranged wife. Depressing that they’d fit in perfectly…

  17. The trend towards internationalising car production started here in Britain, which had a thriving car industry until the end of the Sixties. The foreign-owned firms started to move production to their factories in continental Europe and even British Leyland started to import some Allegros (made from kits in Britain) in the late Seventies.

    By then, if there was a strike in Dagenham, Ford could make an identical-looking Granada in Germany as people would think they were still buying a British car and, even now, some older people think Ford is as British as Jaguar.

  18. Britain seems to be snatching defeat from the jaws of victory.

    It has voted to leave the EU, which could well mean the loss of valuable European sales and attendent job losses. I believe the root cause of this was our latent xenophobia. Then, in the General Election, 40% of us were duped into voting Labour because we were taken in by the facade of a prospect of a fairer Britain.

    Corbyn’s Labour Party has an anti-business agenda in which all employers are tarred with the same brush as the Philip Greens and Fred Goodwins of this world. Nationalisation is not for the benefit of the public but for the trade unions who see it as a tool to hold the country to ransom – and consumers would pay for it.

    Those Southern Rail commuters who voted Labour because they think a nationalised network would not suffer from industrial relations issues are sorely deluded. When he was BR boss the late Sir Peter Parker had several running battles with the rail unions over manning issues, and Sir Peter was a card-carrying member of the Labour Party!

    I fear profit and aspiration are soon going to become dirty words, equating with inequality. There seems to be an atmosphere of rebellion in the country that could lead to our mutual self destruction.

    OK, rant over.

  19. It might well happen, but only by name. I suspect that it will be too politically toxic to fully back track, so something will be done.

    We are now starting to see the truly catastrophic effects that will happen. And there is a limit to the amount of these that any politician can be associated with.

    Plus, there are the unexpected things, such as removing EU building regulations on tower blocks.

    It may be that we enter a transition arrangement for five years. During which time the old who voted for Brexit will die, and the young will decide they want to change the country’s mind. After all, as David Davis himself said “nations [are] ‘not democracies’ if they can’t change their mind.”

    • Please, can you list “the truly catastrophic effects” that are starting to happen?

      Your comments re. “EU building regulations on tower blocks” are simply utter bollocks – there aren’t any. What EU regulation there is deals with energy use and materials approval marking to enable sales across the EU – the ‘CE’ mark.

  20. One question the ‘Outers’ have never answered satisfactorily for me is this:-

    If the main argument for the UK leaving the EU is to regain control of our laws etc, then why were most of our elected MPs in favour of staying in the EU? These elected MPs are the people who have ‘control’ of our laws so why are they content to hand this power to another authority? Surely they would want to regain as much legislative power for themselves as they could.

    Come on ‘Outers’ explain that one!

  21. I wonder whether, now election fatigue has set in, as we’ve had two elections and a referendum in two years and, where I live, a long by-election campaign at the start of the year, the Maybot will hope her agreement with the DUP will see her hang on until Brexit is finalised in the spring of 2019.

    The Callaghan Labour Government had the same problem 40 years ago, its tiny minority was wiped out in three by-elections and, by early 1977, had to rely on the Ulster Unionists and Liberals to survive. This shaky Government managed to hang on until 1979, when the Winter of Discontent and a vote of no confidence, where the Liberals and the Unionists sided with the Tories, finally saw it collapse. I reckon this is what will happen to Maybot if a similar crisis occurs.

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