Leave voters, how much would you pay to leave the EU?

[fakenamefornow]

I have sensed a change of mood. In that lots of leave voters seem to have accepted that leaving the EU will make us poorer, and that that's ok, money isn't everything and it's a price worth paying. I never heard this view before the ref.

So, my question is , if you knew Brexit would result in the UK being poorer would you still vote for it?
If Brexit resulted in the break up of the UK would you vote for it?
If it restarted the troubles in NI would you vote for it?

This isn't to have a go btw. I have spoken to some who believe almost any price is worth it to leave the EU.

I'm a remain voter. Being in the EU and having free movement across the other 27 states is very valuable to me, I would vote to remain even if I knew it would make us poorer. If staying in the EU caused the break up of the UK or endangered the NI peace , that would be too high a price and I'd vote out.

Can I just say thank you to those brexiters who gave genuine answer to a good question - I can see it takes some bravery.

I think those of us on the other side should leave space for more answers

"The EU is also shrinking as a share of world trade, so is becoming less important"

This again is misuse of statistics.

The EU has grown in terms of world trade both nominally and in real terms over the last 20 years.

Its % share of world trade has gone down, but that is because the level of world trade has increased dramatically.

To put it simply, comparing percentages of things is only an accurate comparison if the thing you are comparing is the same size.

This:

" see no reason why the current deals the EU has with other countries cannot be simply mirrored by the UK - no change for either party from the current UK trading relationship."

Shows a real lack of understanding, other countries may not be willing to sign the same deal with the UK alone and ask for different terms.

The distance is important too Carol, because not only could any cost savings in purchasing be offset by expensive transport costs, but also we must consider the negative externalities of such.

honeysucklejasmine
Sorry to hear that your friends and families are affected. Today US Priv Equity are talking about buying up the suspended CRealEst funds so they obviously expect things to turn around.

smallfox2002
You can compare things by percentage or by absolute terms - nothing wrong with that. EU is now bigger than ever (28) vs 18 in yr 2000 and so that also needs to be adjusted for.

However, if the single market is such a powerful construct, one would expect it to grow at about the same rate as the rest of the world?

Topsy,

Not really.

As it has increased in both nominal and real terms we can see that as the EU has got bigger then output has also got bigger, and that even then it has grown at a very fast rate.

However the amount of world output has increased dramtically from the exponentially BRICS countries especially who have grown from being very agriculturally based economies to highly sophisticated industrialised nations in about 30 years.

The simple way of putting it is, the pie has got bigger, and while we now have a smaller % of the pie, we have a lot more pie than we did before.

I think we are talking about GDP as % of world GDP here rather than trade volumes.

" the pie has got bigger, and while we now have a smaller % of the pie"
I agree with this, but the share of the pie is getting even smaller (especially ex-UK which account for 1/6 of the EU28 GDP). The importances of the EU is diminishing fast. Since 2008 EU GDP(real) grew by about 2% vs around China's 100%, so that is about 50x differential. The 'magic' single market really isn't magically enough even if we take into account the 'agriculture to industrial' factors.

Even worse, the EU28 GDP per capita (real, not PPP adjusted) has not grown since 2008 when it reached a peak of $30519 in 2008 and is probably about the same (or perhaps less at c$29000 after Brexit EUR devaluation) in 2016 (2014 : $30240, data=worldbank/trading economics). So, the absolute pie per head is not growing bigger either nowadays.
(Not to say UK is doing any better of course, 2008 : $41569, 2014:$40967, 2016: c$36000 after recent devaluation).

Chinese growth has been artificial though, the spending since 2008 on investment has been almost entirely government based, this accounts for it being a massive chunk of their GDP.

All in all, as a share of world trade, the EU % has inreased in real terms and in nominal terms since then 1980 point given by Daniel Hannan. However because other economies have grown so much since then, its % has reduced.

What were China producing in 1980? India? Brazil? You also have to note that as these countries were developing their increases in GDP have been rapid as they have expanded into sectors already established in developed economies, this growth can't be replicated again.

In all, the narrative that the EU is in decline is not true and a misuse of the data.

I did not say the EU was in decline, just reducing importance. Distance is relevant to goods, not services, and we are net exporters of services, importers of goods.
This is our strength in the negotiations, any goods based duties would hurt the EU more than the UK. They want free movement of goods, us of services. So the same as present without the automatic right of EU citizens to UK jobs (and vice versa) and without UK companies selling solely in the UK to follow EU rules (EU companies selling into the UK can follow UK rules).

IF we get full access to the single market for services it is a very interesting proposition, but the question is, apart from a few countries, how many are going to buy financial services etc from us, unless we retain the EU platform status.

I love how simple people make trade deals sound! And I wished I live in such an ignorance is bliss world too - I'd have gone to bed already!

It's not just being able to make a trade deal that counts (btw the average time for one of these is about 5-10 years - for 1, not 30+ at the same time) it's the quality of them. Eg Swiss & China deal gives China access to the Swiss market without tariffs immediately. Switzerland needs to wait 15 years. And this deal doesn't include cars or services. Sound like a good deal for us? Think we'd get a much better deal along the lines of having a cake and eating it?

I know we all want to put the Great back into Great Britain the same way we wanted to put Opium into China (history most Brits don't get but most Chinese will never forget) but we are a substantially weaker partner at the negotiating table as 1 country versus being in a block.

This is just 1 example.

" narrative that the EU is in decline is not true"

That is correct. However, it is in relative decline.

EU did all right from 1980 - 2008. Since then it is one crisis after another and now Italian (mainly) and German (DB/B.Landesbank) crisis is now playing out right in front of our eyes.

I think Hannan was talking about EU GDP as a % of world GDP. This is of course correlated to the trade volume but the data about the trade volume was not discussed.
fullfact.org/europe/eu-has-shrunk-percentage-world-economy/

The question is not where EU was from 1980 - 2008, the question is where it would be in 2026.

caroldecker

Distance is also less relevant to goods nowadays (compared to 1973 or even 2000). There are massive shipping capacities out there nowadays and the Baltic Dry (mainly commodities related, but is correlated to general shipping capacities/demand/prices) is near all time low.

What were China producing in 1980? India? Brazil? You also have to note that as these countries were developing their increases in GDP have been rapid as they have expanded into sectors already established in developed economies, this growth can't be replicated again.

This is where a lack of knowlege about the historical top 10 comes into it. Most people in the UK had little knowledge that Britain was number 5 until Brexit. Britain, France and Brazil are constantly moving around position 5,6 and 7 and have done so for years. India has been in the top 10, since the dawn of time (ok not that much) but certainly way before the 60's. It is one of the major reasons the UK got so rich. Brazil and China have certainly has been in the top 10 since the 70's. Neither of these countries are newly emerging ecomomies.

China wasn't in the top 10 in 1980. Brazil was no 9.

They are not newly emerging economies but their industrialisation and development have been exponential.

In terms of size, China's economy was nearly 5 times smaller than that of the UK in number 5, and Brazil's around a bout half as small.

Considering that they had much larger populations than the UK at the time (China 981 million, Brazil 121 million, UK 56 Million) this indicates a significant under development doesn't it?

I'm afraid I don't have a "lack of knowledge".

List of countries by historical nominal GDP and PPP GDP and IMF data. It doesn't say which year constant USD it uses, but it is probably 2010 constant USD.

en.wikipedia.org/wiki/List_of_countries_by_largest_historical_GDP

Yes - China has a lot of catch up to do still but the old rabbit is now moving at sleeping speed and the old tortoise has now got a rocket skate board.

In 1975 they were position 9 and 10. China certainly was number 9 in 1980. I don't know what sources you have. Brazil was 11 so just off the top 10 and back on by the 1990.

*In terms of size, China's economy was nearly 5 times smaller than that of the UK in number 5, and Brazil's around a bout half as small.

Considering that they had much larger populations than the UK at the time (China 981 million, Brazil 121 million, UK 56 Million) this indicates a significant under development doesn't it?

Does it? The UK economy was nearly half that of West Germany in the 1980's and with a similar size population. Does that also indicate under development?

The idea that other countries cannot develop because other countries are already in those positions or that development is rapid and unsustainable is inaccurate. Former colonies that were pillaged and plundered are now in control of their own resources, populations and are gradually eradicting the legacies of inequality that the Europeans left behind. They are also developing in different ways. Brazil for example is nearly 80% reliable of renewable energy with a goal of increasing this 2020 compared with only 20% in the UK, which is still heavily reliant of fossil fuels and one of the worst contributers to global warming. Brazil contributes less co2 than the UK despite, as you have already pointed out, having 4 times the population size.

Looking at the 1980's and saying but look we were more developed is another twist on the whole idea that Britain was great and therefore Britain can continue to be or will be great again. Britain was great because it oppressed and stole from other countries. It is over populated and heavily reliant on exports of one type, it also no longer owns large ecomomies like India. As the population increases Britain will become more reliant on imports. It simply does not have the land and resources of countries like the USA, India, Brazil, Russia and China. These are some the largest countries in the world. That's no coincidence.

The data I used was from the IMF.

Don't trust Wikipedia, , mind you the data I used is from the same source of the World Bank.

In 1980, Brazil no 9, China no 11.

Both with far larger populations than the majority of the rest of the top 20.

Like I said, their development has been massive and their increase in GDP has been caused by the development of industries and markets that already existed in the other developed economies.

Sorry, I used IMF and WB data.

Whoops just noticed, the data I used was Real GDP, the ones listed in Wiki are nominal :) , my mistake

So by both of those only one of the two countries mentioned were in the top ten.

"The UK economy was nearly half that of West Germany in the 1980's and with a similar size population. Does that also indicate under development? "

The UK was certainly a far weaker industrial power in the 1980s, German industry was far more advanced whilst UK industry, especially manufacturing had been in decline.

"The idea that other countries cannot develop because other countries are already in those positions or that development is rapid and unsustainable is inaccurate"

I never suggested it was, the point I was making was that with significantly larger populations both Brazil and China had far lower GDP than the UK, which suggests that those economies were under developed in comparison at the time.

This was to counter the point, used by Daniel Hannan, that the EU was of declining importance in the world economy. I was attempting to illustrate why the world economy had increased so much, you know countries with large populations had developed at a rapid rate and therefore contributed far more to world GDP than before, thus reducing the EU's % of the total, but increasing the total at the same time.

Therefore comparing % changes is slightly irrelevant, we should look at both nominal and real GDP/GNI to see growth.

development of industries and markets that already existed in the other developed economies.

So the services that Britain heavily relies on can be provided at a lower cost from other countries ? That makes for an even worse outlook.

Hmm, not just that, I think eventually this might be the case but we have significant compartive advantage in this area for now.

What I meant was that growth of these countries economies had been stimulated by for example the growth of sectors that hadn't existed to the same extent as they had done in more developed countries.

Look at Chinese manufacturing and services sectors back in 1980 for example, far smaller and far less diversified than they are now, this contributes to their increased GDP and thus world GDP. It also means that although they are growing, this growth cannot be replicated again in future, because those sectors have gone beyond the stage of exponential development and will naturally slow down.

Brexit to make the country richer - so hopefully all leave voters will be paid, not have to pay! and with the FTSE 100 at a record high today, it looks as though that could happen...

The problem is that the FTSE jump is down to foreign investors taking advantage of the weak pound, they get more bang for their buck.

However just as all leave voters urged caution when the rock bottoms were happening, I'd urge caution here too.

I'd also urge you to take a look at the sector reports from last week and the consumer confidence one, these are not good indicators.

I doubt China's position will change, what they currently boom from will eventually slow down true, which means they will only move into a new market. Britain will have to follow suit too. Change at some point is inevitable. I just think that China is in a better position to shift. Britain's size makes it more limited with what it can provide or build on.

Chinese growth is challenged by the fact that the growth since 2008 has been mainly down to government spending on infrastructure and other investment, this has been curtailed and is responsible for the economy slowing.

Interestingly the ageing population in China presents it with some major challenges, as those born before 1979 get older and retire their labour force will shrink and reduce their productive capacity.

I