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FT Complains That the Economy is Doing Too Well

The Financial Times has truly outdone itself with this unintentionally hilarious article from Economics Editor Chris Giles complaining that the British economy has actually been doing too well since the referendum. Which is an interesting position for supposedly the world’s leading financial newspaper to take…

Not content with just being mystified by the fact that people failed to do as they were told in the referendum, the FT is now bemused as to why the markets haven’t done as the FT wants either. Giles bemoans the fact that “relatively benign economics has emboldened politicians to harden their Brexit demands and refuse to compromise” and declares that “it is now too late for markets or the UK economy to exercise much discipline on Britain’s politics before the scheduled exit date of March 29”. Translation: it’s too late for a financial or economic crash to scare people into doing what the FT says they they should do…

Giles says that since the referendum “economic performance has been tolerable while the employment rate has reached record levels.” Which is a bit of an understatement given the UK is currently the fastest-growing European country in the G7 while Italy and Germany slide towards recession. Rather than complaining that Project Fear hasn’t come true – despite the FT’s best attempts to talk it up – maybe they should have a little quiet reflection on why they got their predictions so wrong instead…

FT Learns How Imports and Exports Work

Must-read letter in the FT today:

We are a 95 per cent export manufacturer of high tech instrumentation, so we have a lot of experience in overseas trade. On May 24 the head of HM Revenue & Customs estimated that post-Brexit, import-export may cost industry £20bn extra at UK borders. With £10m of exports, 75 per cent outside the EU, and £1.5m of imports, 85% non-EU, we are in a good position to give a realistic figure for these costs.

All imports enter under Inward Processing Relief, and no taxes are paid at the border. Goods may remain in the UK for up to nine months free of duty and value added tax. Duty and VAT become payable if the goods are sold within the EU, but not if they are exported outside. When we sell our equipment to a Japanese company, we invoice free of VAT as an export. It collects ex-works and delivers worldwide, sometimes direct to a customer within the EU. It will invoice without VAT as, being based in Japan, it is not VAT registered. It is that company’s customer who must record and pay VAT, on the basis that it is an import even though the goods may have crossed no frontiers.

Our VAT and tax returns are made on a monthly and quarterly basis, with payment by direct debit. Every two to three years, HMRC audits our record-keeping. Maintaining this system requires a skilled person for one or two days a week — at a £50 hourly rate for 500 hours per year, the annual cost is £25,000. We also employ shipping agents at a £70,000 annual cost, of which over 90 per cent is transport charges. Our cost for import-export paperwork is about £32,000.

Our largest tax is the 20 per cent VAT charged on importing goods from the EU, just as from the US or Japan. This will not change after Brexit, although there may be a 3-5 per cent duty if no deal is done. The cost in additional paperwork will therefore be no more than 10 per cent of the present £32,000. We will incur an average 4 per cent duty on our £225,000 of EU imports, but will recover 95 per cent of this on exporting, so duties will cost the company about £500. Assuming we do business with the EU on terms no worse than the rest of the world, the cost will be around £3,700, or 0.04 per cent of our £10m turnover. Compared to currency exposure where rates can change by 1 per cent daily, this is a negligible figure, so Brexit on any terms will not change our business.

Jeremy Good
Director, Cryogenic Ltd, London W3, UK

Number 10 and half the can should learn from this…

May Considers Asking to Stay in Single Market For Goods

The extremely well-connected Brexit wonk Charles Grant writes in the FT today that the government is considering asking to stay in the single market for goods. Guido also understands this is under active consideration in Number 10. Grant writes that this means de facto accepting ECJ rulings and EU rules and regulations, and potentially a compromise on free movement:

“The challenge, however, is that the EU would never agree to Britain being in the single market for goods unless it adopted all relevant rules, submitted to a punishment mechanism for any deviation, and accepted some oversight by the European Court of Justice… If the UK does request membership of the single market in goods, the EU’s initial reaction will be no. Michel Barnier, the European Commission’s chief negotiator, says the single market is “ binary” — you are either in all or none of it — and must involve free movement of labour.”

If we agree to become a rule-taker on goods and accept ECJ rulings, we are clearly not taking back control of laws. If we have full alignment with Brussels regulations on goods, that severely hampers our ability to strike trade deals with other countries – that is not taking back control of trade policy. If there is a compromise on free movement, that is not taking back control of borders. And it is unfathomable the EU would agree to all this without the UK making significant ongoing payments of vast sums to Brussels. That is not taking back control of money. Staying in the single market for goods crosses May’s own red lines, and goes miles beyond the red lines of Brexiters. 

Number 10 may have wagered that they can buy off Brexiters like Boris and Gove by agreeing to spend the Brexit dividend on the NHS (even though this is disingenuous and the NHS money is mostly tax rises). But surely there is no way Boris, Gove, Fox and Davis – or any Brexiter for that matter – could stay in the government if their red lines were rubbed out like this. This would be the softest of Brexits – Cabinet Leavers must stand up to Number 10 on this…

Remainers Finally Realising They Can’t Stop Brexit

Are Remainers finally starting to get it? Guido has spotted three in the last week coming out and saying Brexit won’t be stopped. First Wolfgang Munchau wrote in the FT:

“The probability of a reversal is not technically zero, but close enough to be discarded. The probability of a Brexit without a deal is also not large, but much higher than the probability of a successful revocation. The best strategy for smart Remainers is stop the second referendum fantasies and to focus on the period after Brexit. This is when the debate on the future relationship will get truly interesting.”

Then his colleague at the pink ‘un David Allen Green yesterday conceded: The three legal paths to stop Brexit are blocked”

“there seems no serious possibility of such a dramatic reversal. The “mandate” of the referendum will remain, and those who still dispute that there is a mandate are akin to the generals who keep fighting the battles of a previous war.”

The Centre for European Reform’s Charles Grant agrees:

It’s only the cranks still saying Brexit can be reversed…

Sunday Times’ Shippers v FT’s Spiegel

A classic Media Twitter Bitch Fight over the weekend, as the Sunday Times’ Tim Shipman and the FT’s Peter Spiegel argued about who scooped whom. Particular highlights are Shippers on the “classic FT self-satisfied and patronising tone” and Spiegel’s catty remark about a departing Sunday Times hack.

After some even early jousting, Guido reckons the more experienced Twitter streetfighter Shippers took it with the final zinger.

FT Editor: My Job Is to Pour Scorn on Brexit

Just in case it was in any doubt what FT editor Lionel Barber thinks his job is… he has endorsed this letter from swivel-eyed ultra-Remainer and former Economist editor Bill Emmott to his paper highlighting “the FT’s solemn duty to pour scorn” on Brexit:

“In accord with its slogan “Without fear and without favour”, the FT could not have done otherwise, for there is no good case for leaving the world’s largest and deepest free trade area, whose regulations have been shown by the OECD to do far less economic harm than domestic rules, which is not protectionist towards the rest of the world, and which gives Britain a louder voice and greater heft in global affairs than it can have on its own… So to pour scorn on a terrible strategic mistake is nothing less than the FT’s solemn duty.”

Earning that Legion Dis’Honneur

Harding Linked to Pink ‘Un

The Financial Times newsroom has been speculating that outgoing BBC head of news James Harding is on the list of runners and riders for the Pink ‘Un editorship. In his resignation statement last week, Harding mysteriously revealed he was planning to “start a new media company with a distinct approach to the news”. This line is being treated with scepticism in media circles – why would Harding abandon one of the biggest jobs in journalism and one of the largest audiences to start all over from nothing? Sensible FT types suspect the “new media company” could be a front and that Harding has his eyes on another prize…

It is an open secret that 62 year-old Lionel Barber is on the way out. Last week Buzzfeed reported half a dozen senior FT journalists had travelled to Japan as part of a “beauty contest” showcasing potential next editors to their Nikkei owners. Gillian Tett, Robert Shrimsley, James Lamont, Roula Khalaf, Peter Spiegel and Alec Russell are among those in the running. Male candidates are said to have an advantage in a Japanese-owned firm. The most likely outcome at the moment is Barber stays until next year and then recommends an internal candidate to the bosses. Though there has been speculation in the newsroom about Harding, a former FTer who was at the paper for 12 years, throwing his hat in. Industry sources note Harding has yet to register any new venture with Companies House. Is he sniffing around one last real job?

Remain Media Coverage Criticised By Experts

Some pro-Remain pundits and publications are single-minded in their desire to blindly attack the government, even if it means getting the story wrong. Take today’s Guardian article claiming HMG’s proposal for a system of civil judicial cooperation is a “climbdown from its promise of judicial independence”. This is rubbish – child custody, divorce and small business disputes are a separate issue to the ECJ and judicial independence. It’s pretty basic stuff, the Guardian is misleading its readers because of its desperation to create something out of nothing and criticise the government. Here are Matt Holehouse from MLex and Allie Renison from the IoD, who actually know what they are talking about:

Then there is the FT’s David Allen Green, who this morning praised Michel Barnier and dismissed the UK’s positioning papers as “noisiness“, “bluster and the spin“. Get a grip. As the Sunday Times EU correspondent Bojan Pancevski says in response:

“‘Bluster & spin’ is UK attempting to extract a best possible deal, also for taxpayer. It’s a negotiation. Disagreeing with Brexit is one thing, but believing that the EU is “right” in the talks and spin, bluster free is bizarre. Should HMG simply accept terms as they are given? DD already accepted the “Brexit bill,” transition period, some role for ECJ & paying into EU budget post divorce. So this is far from the alleged intransigence that gets reported… If you think you can reverse Brexit, find a political way to do it, don’t bash own government, civil service for doing what they have to.”

Of course some pundits would rather Britain had voted to Remain. We get it. But there comes a point where they are just supporting the other side, getting it factually wrong and acting against the interests of their own readers. Embarrassing stuff…

Remainers Divided, Can’t Agree Positions, View Each Other With “Suspicion”

An interesting story in the FT today reports that continuity Remainers are riven by splits, cannot agree on how to oppose Brexit and view each other with “suspicion“. The paper says “working out which MPs will vote together, and on which issues, has proved to be a political Rubik’s Cube, with suspicion on all sides“. There are apparently no less than three Remainer camps:

  • Pro-EU Labour moderates seeking to change Shadow Cabinet policy so Labour as a party can try to block Brexit.
  • Tory Europhiles who oppose their pro-EU Labour colleagues using Labour as the vehicle to reverse Brexit. Instead they want to change Tory policy from within because they don’t want Labour to score a win.
  • Anti-Brexit SNP and Plaid MPs who also don’t want Labour to take the credit for fighting Brexit because Labour is their main rival .

The FT’s analysis of these Remainer splits and suspicion is: “while Mrs May claims a narrow majority of just 12 in the House of Commons, defeating her in the autumn may prove more difficult than the numbers would make it seem”. A slightly different narrative to the usual ‘Cabinet splits’ stuff…

A Classic of the Genre

Yesterday’s hat-trick of Brexit good news is covered the only way the FT knows how…

FT Endorses Tories

Quite a few FT readers will be horrified to see their paper backing Brexit and endorsing the Tories:

“This publication stands for a liberal agenda: a small state, free trade, free markets and social justice. Neither Mrs May nor Mr Corbyn stands four-square behind these principles. Neither has offered tax and spending plans that are credible, given the short-term risks facing the economy…

The alternative to Mrs May is worse. Mr Corbyn is a fringe figure who has spent his entire political career in opposition — to his own Labour leadership. Despite his recent media makeover, he is a pacifist relic of the 1970s, in hock to the trade unions, with no grip on economic issues. It is no accident that the arrival of Mr Corbyn and his hard-left supporters in mainstream politics has coincided with a revival of anti-Semitism and misogyny. Labour’s team are unfit for government, let alone the delicate Brexit talks. The Liberal Democrats have failed to make an impact with their pledge of a second EU referendum…

Faced with such uncertainty at home and abroad, Mrs May is the safer bet.”

Read the full, less than ringing endorsement here for the withering takedown of the Tory campaign and May’s opposition to free markets. Bet there are some newsroom Remoaners who are less than pleased too…

Portillo: FT the “Daily Remainer”

FT editor Lionel Barber unimpressed with these truth bullets from Michael Portillo on This Week…

FT’s David Allen Green Triggered By Article 50

Spare a thought for the FT’s columnists – they are really having a tough time of it at the moment. Take David Allen Green, the paper’s legal commentator who has been imparting his Article 50 wisdom to readers of the pink ‘un.[…] Read the rest

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FT Carney Exclusive Stays Exclusive

ft

Contrary to the front page of this morning’s FT, Mark Carney will not serve a full 8 year term at the Bank of England, he will step down two years short of that in June 2019. Oops…[…] Read the rest

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Post-Brexit Growth “Much Better Than Expected”, Economy “Holding Up Since Brexit Vote”

Before the referendum the Treasury told us growth would be between -0.1% and -1% in 2016 Q3.

screen-shot-2016-10-27-at-09-44-58

Today the results are in: the UK economy grew by 0.5%. The FT grudgingly admits:

the UK economy has held up far better than many were expecting following the Brexit referendum on June 23 and economists who had predicted a lurch into recession have since revised their forecasts”

Final nail in the Project Fear coffin.[…] Read the rest

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No, Commons Vote on EU Trade Deal Does Not Threaten Brexit

ft

A strange FT splash this morning claims that MPs getting a vote on the government’s eventual EU trade deal means a real Brexit is less likely. This is just wrong. MPs will be given a choice between the government’s deal or no deal which would mean trading with the EU under WTO rules.[…] Read the rest

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Mark Wallace on Only Connect

ConservativeHome’s Mark Wallace, a secret quiz buff, and his team are through to the next round on the BBC show Only Connect after a comfortable victory last night. Plaudits must also go to FT brainbox Josh Spero.[…] Read the rest

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Le FT: Plus ça change, plus c’est la même chose

pmi-frontpagesThe financial pages seem full of good news for Brexit Britain, City AM splashes with Bounceback“, the Wall Street Journal contemplates a Brexit boom for manufacturers and the pound recovering. Over at the FT they have managed to acknowledge the possibilty that things might not be quite as terrible as they predicted with a sceptical bottom of the front page headline “busy factories fuel pro-Brexit MPs claims of Treasury scaremongering”.[…] Read the rest

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Missing From the FT Letters Page…

Upon hearing the news that Lionel Barber had been awarded the Legion d’Honneur, one reader wrote to the FT’s letters page to congratulate the editor on his gong. For some reason the letter hasn’t appeared in the pages of the Pink ‘Un, so Guido reproduces it here:

Sir,

May I, without fear or favour, be the first to congratulate you through the pages of your newspaper on your nomination for Chevalier, Legion d’Honneur.

[…] Read the rest

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