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mdi-timer 12th November 2019 @ 10:02 am 12th Nov 2019 @ 10:02 am mdi-comment Comments
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…

mdi-timer 1st February 2019 @ 11:30 am 1st Feb 2019 @ 11:30 am mdi-comment Comments
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…

mdi-timer 29th June 2018 @ 5:36 pm 29th Jun 2018 @ 5:36 pm mdi-comment Comments
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…

mdi-timer 20th June 2018 @ 9:01 am 20th Jun 2018 @ 9:01 am mdi-comment Comments
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…

mdi-timer 5th April 2018 @ 11:29 am 5th Apr 2018 @ 11:29 am mdi-comment Comments
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.

mdi-timer 12th February 2018 @ 10:03 am 12th Feb 2018 @ 10:03 am mdi-comment Comments
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