Confused about Brexit Budget Cuts

[TattyCat]

Someone help me out here please and apologies if this has already been covered elsewhere.

George Osborne has said that in the event of Brexit, he will have to raise taxes and slash public spending. Now, given that we give £350m per week (ok, I know this figure is disputed but either way, it's large) to the EU albeit getting some of this figure back, how on earth can this mean that we have less money as a country?

I know we need to repay the national debt and a percentage would be paid towards that, but surely it means we would have more money to distribute as we see fit?

Am I being thick and missing something fundamental? I realise it's a very simplistic view but I really do fail to see how it would mean cutting spending and raising taxes.

We have lots of bankers sitting at computer screens - few fishermen left ( Eu fisheries policy put paid to that - talk to Cornish/Scottish fishermen), few farmers being properly paid ( although getting eu subsidies (our money) to not grow stuff - come and look at the fields around me), a lot of manufacturing moved to Eastern Europe with eu financing to incentivise ( inc Dyson, Land Rover, Cadburys). We're rich. The EU wants to redistribute this to poorer nations.

There's a lot to be said, environmentally, for growing food closer to home and cutting air miles - I grow my own veg - but we haven't been self-sufficient since Elizabethan times, because tastes have changed, and leaving the EU won't change that.

People aren't suddenly going to stop wearing trainers, using computers, catching planes, driving cars (even if they're made here the metal has to be mined elsewhere as we do not have it in the ground).

We only produce 60% of our food needs. If we cut imports, not only do prices go up a lot here, we hurt producers in the developing world who rely on being able to sell us coffee, bananas, etc - which cannot grow here - to put food on the own tables.

As someone above has said, 100 billion has been wiped off our largest companies in the last few days just on the polls changing. The pound is taking a nose dive. It is difficult to imagine how bad it will get next week if there is an actual Brexit. Government will have to bail out potentially= loss of public finances.

Too cheap pound= imports for our companies too expensive and for every day consumers. Less profits = less taxes paid= job losses= our government getting significantly poorer. Our poor suffering the most as benefits slashes further. Also increased deficit of the government. The reason that every economist is worried is because we all should be! This isn't just scaremongering, it is the reality. The stock market influences our finances and the stock market HATES uncertainty. Not knowing what is going to happen with potential future trade and the time it takes to negotiate new trade agreements (years potentially) is a nightmare for the stock market. It will put so many investors off our country - except maybe some international cash buyers who will pick up central London property cheaply once the pound falls even further and the housing market suffers too.

Try this article medium.com/@williamgadsbypeet/project-fear-is-a-fitting-name-you-should-be-fucking-terrified-5c93f1b5ef2f#.ywrcedn6g

Tatty I work in a manufacturing company. Most of the suppliers we buy from are located in the UK, but only in general as a distribution arm or partner of a European or global manufacturing company. The materials are manufactured elsewhere - US, mainland Europe or Asia. The few things we buy that are manufactured in the UK will have an identical supply chain for their raw materials, they are just a tier down in the supply chain.

My job and my company's presence in the UK would simply not exist without trade deals. The home market is effectively non-existent because our products are sold to global manufacturing companies (not located in the UK) who do something else with them, to create an end product.

I hope that helps explain a bit!

Btw we don't manufacture consumer goods but the supply chain for those, and for food products (not things you can grow, but things that are made) is similar.

^At the end of the day, the FTSE 100 was UP 43.27 points at 5,966.80.

The benchmark share index fell below 6,000 on Tuesday for the first time since February on worries over rising support for the UK leaving the EU.^

Thanks threepineapples. But the trade agreements won't disappear overnight - they will be renegotiated where necessary, surely? Those negotiations may take time but I can't believe that there isn't a clause somewhere that covers the agreements in the event of a UK EU exit. If there isn't, then the referendum just wouldn't be taking place, because the effect would be disastrous and plunge us into being a 3rd world country with immediate effect. And DC wouldn't have ever agreed to hold a referendum. No-one would.

£1 = $1.42 - hardly a nosedive - but then I would not see it that way not being a remain supporter

The EU is the largest trading block in the world and Britain's largest trading partner. There are zero tariffs on EU goods as we are a member of the single market. Gove has stated that he does not want to be part of the single market. by definition this means that our terms of trade with the EU will worsen, making imports more expensive and penalising our exports to the EU. Jobs will reduce and so tax revenues and growth.

There are claims that we will make better terms of trade with the rest of the world to make up for this. However, no country has stated that they would give the UK better trading terms than they give the EU.

There is also a question of geography. Where did you go on your last holiday? Did you go to the Carribean, Mauritius or to the UK or Europe? If the latter, I am sure the cost of flights and time taken was part of the decision. It is the same with trade. It makes no sense to fall out with your neighbours when sending the same goods halfway round the world costs a lot more and takes time.

And that is before we consider that there are several multinationals which use the UK as their EU headquarters. For some financial services, the operations have to be in the EU, not the single market which is why banks are drawing up plans to cut jobs.

making imports more expensive well then surely a good opportunity for those in the UK to build a profitable business? Will take time but it's not impossible.

There is also a question of geography. Where did you go on your last holiday? Did you go to the Carribean, Mauritius or to the UK or Europe? If the latter, I am sure the cost of flights and time taken was part of the decision. Spain, actually, 2 weeks ago. Cost wasn't a consideration, time taken was. The time taken won't change and I doubt very much that the cost will. Why would it? What has the EU done to keep the cost of flights down for the UK? Fuel?

And actually, the cost of a holiday is irrelevant to me. If the cost of going abroad goes up as a result then it's a good thing for the UK as more people will holiday within the UK and therefore support business here. So, a good thing.

I can smell the fear but I'm still not convinced that staying is the right thing to do. Fewer reasons for staying than going, at the moment. And GO has seriously swayed my view - his 'threat' to raise taxes etc is an effort to hold the Brexit voters to ransom and that's just nasty.

I can't believe that there isn't a clause somewhere that covers the agreements in the event of a UK EU exit. If there isn't, then the referendum just wouldn't be taking place, because the effect would be disastrous

Yes, there is a clause, and it says "the EU and the exiting country have two years to negotiate a new deal. This can only be extended if all 27 countries agree unanimously. If no agreement is reached within 2 years, the exiting country will revert back to standard WTO trading rules."

Now, this may not sound so bad, but there are a few problems with it:

• 2 years is an incredibly short time. For example it took the EU and Canada 5 years to negotiate a much, much simpler deal.
• the UK will be in a weak negotiating position because it is the smaller party (always a disadvantage in trade deals), and because it will be the party pressed for time - for example, Poland could say at the last minute, "nope we're not granting an extension unless you give us everything we want", and the whole deal would be on hold.
• the WTO standard rules are terrible and no one in Britain wants to revert to them

Basically the problem is that the "get out" clause was specifically designed by the EU to favour itself over the country wanting to exit. Precisely to discourage anyone from wanting to leave.

My point is that it's easier and costs less to travel somewhere close. While transport costs won't change, being outside the single market means that there will be tariffs to access the single market. This will mean reduced trade. It will be hard to replace this with trade to far-flung lands as we face transport costs and time to send our goods there. That's why more Brits holiday in Spain than Bali.

Also, if we leave the UK will become a worse investment opportunity as lots of companies will shift some or all of their operations to the continent to have better access to the EU single market. So the pound will fall and imported goods (like out of season fruit and vegetables, consumer electronics, almost all clothes, etc) will become more expensive.

Am thinking I'm going to retrain as a WTO negotiator. YEARS OF WORK. literally decades. Do not underestimate how fucking long that job will take.

YY FreeButtonBee. If we leave they will have to expand the civil service significantly to cope.

Chalalala - For example it took the EU and Canada 5 years to negotiate a much, much simpler deal.

But who's to say that the UK and (e.g.) Canada wouldn't take 6 months to negotiate without the interference of the EU, and the EU needing to refer to 3 foot thick documents before it can agree? No reason for it to take so long except inertia and 'slowness' within the EU. I suspect (I don't know) that the machinations of the EU don't happen overnight, or even over-year! If we think working in the public sector these days is slow paced then imagine how slowly things move within the EU 'organisation'!

Justchanged - That's why more Brits holiday in Spain than Bali.

Maybe. Or maybe travel abroad will become as exclusive as it used to be. There's good and bad in that. Many, many people go abroad and yet know very little about their own country - haven't visited most cities or explored on their own doorstep. I'm being optimistic but I don't think holidays abroad should be a massive consideration in this referendum.

It's not just Canada we have to negotiate with but Australia, New Zealand, India, Thailand, South Africa, Russia (FUN!!!!), etc etc etc. They all have other shit to do. Every country in the world. At the same time. Which country get priority? Will it be the ones we do most trade with? Or are they going to play hard ball and make us wait? And we still have to do a deal with the EU. Who are going to try to fuck us over a barrel in order to 'encourage les autres'.

Like I say, I'm a lawyer. I'll lose my current job (80% chance I'd say). But I'll find anther because this shit is so complex that we are not going to let farage rock up and shake hands on it.

Tatty, sure, maybe. But you asked about a future UK/EU trade deal, so that's what I talked about.

Or are they going to play hard ball and make us wait?

Or... will they think that the UK has guts and faith in their own ability to 'stand alone' and therefore be more helpful? More than one way of looking at it. I'm trying to find a reason to stay in - I know it doesn't sound like it but there's another side to every argument to stay in, and not very many for leaving...

I want to believe in 'stronger together', but I'm struggling.

George Osborne has said that in the event of Brexit, he will have to raise taxes and slash public spending. Now, given that we give £350m per week (ok, I know this figure is disputed but either way, it's large) to the EU albeit getting some of this figure back, how on earth can this mean that we have less money as a country?

Because, according to George and all the EU-funded and Government funded economic propaganda the whole sky will fall in if we leave.It won't, as the Remain campaign leader admitted, just before he resigned/was sacked.

I know we need to repay the national debt and a percentage would be paid towards that, but surely it means we would have more money to distribute as we see fit?

We would save huge amounts:
OurEU membership fees - £350 million or whatever a week
The MEP salaries and expenses
Our army of EU civil servants and their expenses
The cost of implementing all these EU laws and Directives
That's just for a start

Am I being thick and missing something fundamental? I realise it's a very simplistic view but I really do fail to see how it would mean cutting spending and raising taxes

You make make economics prove anything you want to prove. If you want to make a bad case for doing something you put in peesimistic fugures and generate a pessimistic outcome. Same if you felt stroby that you wanted something to happen - plug in generous figure and get an optimistic outcome.
Osborne has picked very gloomy and unrealistic figures that even his own Treasury say are nonsense, He's backed these up with EU-funded pro-EU propaganda saying there will be a new Ice Age. And then he's trying to tell you that 85% of all economists agree with him - when it was actually 85% of the 17% who bothered replying.

Plenty of other ecomot disagree - but you rarely hear about those as Osborne isn't going to mention the positive news. Plus a Nobel prize winning economist has said that we should LEAVE if theEU proceeds with TTIP - which is is still doing.

So, Osborne is trying to generate project Fear which proved so successful for him during the Scottish referendum. It's not working. So Osborne mow tries project Terror -saying there will have to be an Energency Budget to raise taxes.
Osborne is such a fool that he forgot the Tories only have a dozen majority and already 65 Tories have said they would vote against Osborne's emergency budget and so has Corbyn. So it isn't going to happen.

If there was a really good reason for staying int he EY then we would all happily stay in the EU without all this project fear nonsense But there is no good reason for staying in the EU and he knows it. He just doesn't want to be the Chancellor that took the Uk out.

OK, so another question. Forgive me - I'm asking these as I read and learn more and things occur to me.

How would we feel if, say, Germany or France were going through this? Would we not care, care very much, be fearful for the impact on us or what? And then how would we feel if Greece was leaving? Or Belgium?

Are other countries fearful of us leaving? And if so, why?

God, I feel like a 5 year old asking simple questions. But I genuinely don't know and want to make sure I make the right decision, if that's possible.

Other countries may look sympathetically at the UK and give us preferential terms, or more likely they'd see a UK desperate for a deal and give us unequal terms.

Let's take China. China has no interest in allowing tariff -free access to its market. It wants to protect it's industry. And who is China's largest trading partner? Not the U.S. but the EU. Why would China give better terms to the UK than the EU?

On economics, I am an economist and need to stand up for my profession. Whilst there are areas of disagreement, there's a clear consensus that free trade is good, leaving the EU will lead to reduced growth for the next few years, though the long-term is uncertain. However, as Keynes said, in the long-run we are all dead.

Just reading up about TTIP - never heard of it before. Not happy with what I read so far but trying to find a positive.

"MEP salaries and expenses"

I have to admit that depriving UKIP MEPs of the considerable income they have earned from the EU (while doing no work at all to fight for British people at EU level) will be one of the minor compensations if we leave.

Actually if we leave there will be no role left for UKIP. Will be interesting to see what happens to Farage and co if that happens. I guess some will rejoin the Tory party, but a lot of UKIP voters still hate the Tories and might go back to Labour...?

Why would China give better terms to the UK than the EU?

Isn't it about time that the Chinese imports we are forced into buying are somewhat strangled though? I'm heartily sick of looking at labels telling me something's 'made in China'. Generally means it's cheaply made and put together and yet... yet I'm paying quite a lot of money for it regardless. I want to see things that are made in the UK - why wouldn't I? I've been shocked at some things I've paid a lot for and not bothered looking at the label first. My fault. I should care more, but it's hard to find things made in this country and yet we have thousands and thousands of small businesses trying to make a decent living but can't because of cheap imports. Again, tell me why this is wrong!

TTIP

Lord Owen who has spent his life promoting the EU says it's time to leave becasue of TTIP

www.theguardian.com/society/2016/apr/06/brexit-is-necessary-to-protect-nhs-from-ttip-says-david-owen

Nobel prize winning economist says we should leave if we are to avoid TTIP

www.independent.co.uk/news/business/news/eu-referendum-joseph-stiglitz-ttip-labour-transatlantic-trade-investment-partnership-a6907806.html

How would we feel if, say, Germany or France were going through this?

I would say that is for them to decide.

Would we not care, care very much, be fearful for the impact on us or what? And then how would we feel if Greece was leaving? Or Belgium?

Again - if they chose to leave why should e want to stop them? Stopping countries doing what they want to do is dictatorship.

Are other countries fearful of us leaving? And if so, why?
Because they want or money and they want to be able to come and live in our economy that pays £7,25 an hour, instead of working in their home countries for as little as £8.47 a day! Their migrant labour sends remittances home that supports their economies. They like the status that being in a club with the wealthy gives them - it gives them access to the edit card that they wouldn't otherwise qualify for (and blew it like Greece).