EU Referendum: The result and aftermath...

[AM9]

Moodys have dropped the UK's credit rating again, this time from Aa1 to Aa2, aligning their assement with the S&P and Fitch assessments last year. The downgrade has been made over concerns about the UK's public finances and fears that leaving the EU could damage the country's economic growth.

 

[najaB]

Bah, what do credit ratings companies know anyway? Brexit is going to be fine, the EU needs us more than we need them, the tooth fairy left that 50p...

 

[AM9]

Bah, what do credit ratings companies know anyway? Brexit is going to be fine, the EU needs us more than we need them, the tooth fairy left that 50p...

50p! I was lucky to get 6d when I was losing my milk teeth. Still with inflation on the rise again, it will be £5 soon, for those whose parents can afford that much.

 

[dosxuk]

Moodys have dropped the UK's credit rating again, this time from Aa1 to Aa2, aligning their assement with the S&P and Fitch assessments last year. The downgrade has been made over concerns about the UK's public finances and fears that leaving the EU could damage the country's economic growth.

Downing Street said the firm's Brexit assessments were "outdated".

Does that mean they should have dropped it further?

 

[Dave1987]

Moodys have dropped the UK's credit rating again, this time from Aa1 to Aa2, aligning their assement with the S&P and Fitch assessments last year. The downgrade has been made over concerns about the UK's public finances and fears that leaving the EU could damage the country's economic growth.

Means the yield demand of Government bonds and debt will be higher so Government borrowing costs are likely to increase. That on top of the fact inflation is very high with nothing the BoE can do about it without damaging the economy even further!

On the brighter side at least May's and BoJo's political careers are on the line

 

[northwichcat]

50p! I was lucky to get 6d when I was losing my milk teeth. Still with inflation on the rise again, it will be £5 soon, for those whose parents can afford that much.

What's the cheapest individual sweet in a sweet shop? In the 90s 50p could have got you 50 x 1p sweets! It could also have got you 2 x First Class stamps with change left over and you could have used those stamps on an A4 envelope if you wanted to. Now it's 98p for a First Class stamp for an A4 envelope - more than quadruple.

 

[najaB]

What's the cheapest individual sweet in a sweet shop? In the 90s 50p could have got you 50 x 1p sweets!

Don't worry, 1p sweets will be back after Brexit. We'll be able to afford 35 billion of them a week.

 

[DynamicSpirit]

Bah, what do credit ratings companies know anyway? Brexit is going to be fine, the EU needs us more than we need them, the tooth fairy left that 50p...

Only 50p? Shouldn't she have left £350M for the week?

 

[Groningen]

Theresa May must clearly why the EU should give her (a) preferential treatment. After leaving the EU she wants 2 years extra for access to the internal market with extra financial payment from the UK.

 

[Senex]

Theresa May must clearly why the EU should give her (a) preferential treatment. After leaving the EU she wants 2 years extra for access to the internal market with extra financial payment from the UK.

Because she still thinks (a) that the EU needs Britain far more than Britain needs the EU, (b) that "special" Britain has a God-given right to preferential treatment, and (c) that the 27 are willing to devote all their energies and all their time to talking about what is for them just one issue amongst many, not the all-dominant question it is for British politics.

 

[D60]

Corbyn has today re-affirmed and re-asserted that Labour's position under his leadership is to Leave the EU-Single Market after a transitional period... citing as a reason (alongside that of honouring the referendum result..) that the Single Market obligation that public services are 'opened up to competition', puts restrictions and limitations on how domestic govts can run their public services... (it has been observed that the Labour Party manifesto that secured a 40% vote share for Labour in the last election, and has secured Corbyn in his position as Labour leader, would not actually be deliverable under Single Market rules..)..

 

[najaB]

...citing as a reason (alongside that of honouring the referendum result..) that the Single Market obligation that public services are 'opened up to competition'...

And that is why I can't, in good conscience, support Labour under Corbyn. While I'm not a fan of how public service privatisation has been delivered in the UK, shielding public services from competition just encourages inefficiency.

 

[HSTEd]

The Electricity Directive for one thing prevents any meaningful public ownership of energy supply with its attendant efficiencies from being implemented.

Theres no point owning the cables and generators if we all still have to pretend a meaningful market for electricity can exist.

And I am unclear on how "competition" in public services actually introduces net efficiencies, once the titanic costs associated with operating the giant bidding bureaucracy is established.
And the enormously high cost of capital repayment demanded by private sector operators for actual capital investment, or the losses in experienced staff and in staff morale thanks to the likely reduction in pay and conditions, or the use of the Tarkin doctrine to manage staff in such enterprises.

You gain efficiencies in the public sector by maintaining staff morale, and liasing with them.
If they believe that improved efficiencies will benefit them through improved pay and conditions, and believe that natural wastage is the only method to be used to reduce staff numbers, they will help you improve efficiency.

 

[najaB]

And I am unclear on how "competition" in public services actually introduces net efficiencies, once the titanic costs associated with operating the giant bidding bureaucracy is established.

There isn't a guarantee of increased efficiency or lower costs, however an organisation operating in an artificially shielded environment has zero incentive to innovate.

Open up the market, if someone can figure out a way to make money providing the same service then good on them.

 

[HSTEd]

There isn't a guarantee of increased efficiency or lower costs, however an organisation operating in an artificially shielded environment has zero incentive to innovate.

Open up the market, if someone can figure out a way to make money providing the same service then good on them.

Until they take the profitable (cheap to deliver and well renumerated) cases and the leave the rest on the state.

So the state/society ends up paying more overall.
And public sector employees are not in an artificially shielded environment, they are subjected to public oversight in the press, online and in government.

EDIT:

An obvious example is the CEGB, which despite being an "artificially shielded monopoly" that would have no reason to innovate, innovated.
Innovated rather drastically and managed to achieve a real terms reduction in costs over its lifetime, and in teh course of thirty years cut its workforce per kilowatt of peak demand by nearly half.
Whilst effectively constructing the modern electricity system.

 

[najaB]

Until they take the profitable (cheap to deliver and well renumerated) cases and the leave the rest on the state.

Which is why, as with the Telecommunications Act 1984, you place universal service obligations on entrants to the market.

An obvious example is the CEGB, which despite being an "artificially shielded monopoly" that would have no reason to innovate, innovated.

Yeah, but let's not play around here. Civilian nuclear power in the UK started life as, and largely continued, as a cover for production of weapons-grade fissile material.

 

[HSTEd]

Which is why, as with the Telecommunications Act 1984, you place universal service obligations on entrants to the market.

The Telecommunications Act did not mandate unbundling - and without forced unbundling of the electricity system there would be no challenge to the existing monopoly.
There would also be no challenge to the railway monopoly since there would be no forced sharing of track access.

I would prefer a unitary electricity operator, owned by the public, with access to Treasury financing at the cost the government can obtain, and with a clearly published schedule outlining all costs it will ever levy on consumers, like this document from Hydro Quebec. It is 166 pages but a lot of that is fluff, and the condensed down information fits on about ten pages.

Yeah, but let's not play around here. Civilian nuclear power in the UK started life as, and largely continued, as a cover for production of weapons-grade fissile material.

I was actually referring to the CEGB as a whole - which in this case was primarily related to the drastically improved economics of coal units over the period
But it is worth noting that the CEGB was never actually paid the plutonium credit, so that cost includes the full economic costs of operating the reactor fleet.

 

[najaB]

The Telecommunications Act did not mandate unbundling...

Indeed it didn't. But baby steps. It allowed other operators to create public access networks where previously it had been a function of the GPO. It also provided guarantees of interconnectivity between the existing PSTN and new-entrant's networks at regulated rates.

 

[HSTEd]

Indeed it didn't. But baby steps. It allowed other operators to create public access networks where previously it had been a function of the GPO. It also provided guarantees of interconnectivity between the existing PSTN and new-entrant's networks at regulated rates.

Leaving aside that the GPO was never technically an actual national monopoly in telephone service, I have grave doubts that this deregulation actually improved services at a cheaper cost than using public control of the monopoly to improve service directly.

Especially since we ended up with multiple parallel networks in some areas and only the original network in others, and increase coverage of high quality connections in rural areas only with huge public subsidies to the privately held telecomms cartel created by privatisation.
I am not sure how it would be practical to force a universal service obligation on a new telecomm operator who's entire network is in a high density area.... Force it to build a line to Jura for a customer?

 

[najaB]

I am not sure how it would be practical to force a universal service obligation on a new telecomm operator who's entire network is in a high density area.... Force it to build a line to Jura for a customer?

The same way it works now - require them to provide service unless they can show that it's beyond economic reason to do so, but at the same time limit their cherry picking the easy/profitable services. If you build a network you need to make it open and interconnected.

And I worked in telecoms for a decade and I assure you, the market is significantly healthier and prices are a lot lower than they would have been without deregulation and privatisation.

 

[HSTEd]

The same way it works now - require them to provide service unless they can show that it's beyond economic reason to do so, but at the same time limit their cherry picking the easy/profitable services. If you build a network you need to make it open and interconnected.

Which then requires a huge and expensive bureaucracy of regulators, ombudsman and tribunals to arbitrate these quasi judicial decisions.
And encourages perverse behaviour by operators who deliberately make serving non choice areas more expensive so they can avoid doing so without triggering regulatory action.

And I worked in telecoms for a decade and I assure you, the market is significantly healthier and prices are a lot lower than they would have been without deregulation and privatisation.

How much of the reduction in costs has been as a result of privatisation (and could not have been implemented by the public sector if they had been told to do so) and how much is down to the drastic improvements in technology since then that has made backhaul far cheaper to provide and has permitted the local loop infrastructure to be squeezed in ways that were previously unimaginable?
The idea that public sector workers are inherently unwilling to innovate is corrosive and nonsensical and really annoys me. The GPO is responsible in large part for many of the innovations a seen in the field during its existence.
EDIT:
I am only referring to infrastructure upstream of the master telephone socket rather than the monopoly on comms equipment in a house, etc the telephone itself.
In other words the actual network itself

 

[najaB]

The idea that public sector workers are inherently unwilling to innovate is corrosive and nonsensical and really annoys me. The GPO is responsible in large part for many of the innovations a seen in the field during its existence.

I haven't said anything about the employees. It's the organisation as a whole. There will be many people who seek to innovate, but absent competition the organisation as a whole has little reason to change.

 

[HSTEd]

I haven't said anything about the employees. It's the organisation as a whole. There will be many people who seek to innovate, but absent competition the organisation as a whole has little reason to change.

The organisation however is made up of its employees, if it you can inculcate [word of the day!] and maintain a spirit of innovation into the work force, this will be reflected in the structures of the organisation.

Competition is one method of applying pressure on the organisation to develop such a spirit, but it is by no means the only method of doing so.
Innovation is seen in numerous organisations that do not experience direct competition, the NHS innovates through new and improved surgical procedures regularly, for example.

With proper workforce culture and proper public scrutiny and demands for better service, advances could be encouraged and achieved.

 

[D60]

"Ending of PFI Announcement - And EU Rules over Govt debt levels"..

Another possible instance of UK domestic govts being freer in future to implement their own policies outside of the EU? With the announcement today by the Shadow Chancellor, of the intention of a future Labour Govt to end PFI funding for the public sector, and to bring PFI contracts back in-house..?
(Labour PFI - Private Finance Initiative - of the 2000s, emerging from Tory PPP - Public/Private Partnerships - of the 1990s, were devised as a mechanism to shift Govt debt from public sector investment onto the private sector, in accordance with EU rules then in place over Govt debt levels... I gather those rules have been relaxed somewhat in more recent years... this allowing the Coalition Govt to transfer Network Rail's debts fully onto the Treasury's books in 2014..)

Comments please..!

 

[Kite159]

So how much would that cost (by buying out any existing PFI agreements to bring them in house)?

 

[jon0844]

Corbyn has today re-affirmed and re-asserted that Labour's position under his leadership is to Leave the EU-Single Market after a transitional period... citing as a reason (alongside that of honouring the referendum result..) that the Single Market obligation that public services are 'opened up to competition', puts restrictions and limitations on how domestic govts can run their public services... (it has been observed that the Labour Party manifesto that secured a 40% vote share for Labour in the last election, and has secured Corbyn in his position as Labour leader, would not actually be deliverable under Single Market rules..)..

I still think Corbyn quite likely voted leave, and he certainly doesn't seem to be doing or saying anything to suggest he might actually take advantage of growing concerns about Brexit and the assumption that if we somehow could have a second referendum, the outcome would quite likely be a lot different (in favour of remain).

Don't worry, 1p sweets will be back after Brexit. We'll be able to afford 35 billion of them a week.

Might have got more young people voting leave if the bus had said 'Let's spend it on Haribo instead'.

 

[northwichcat]

Might have got more young people voting leave if the bus had said 'Let's spend it on Haribo instead'.

Free university tuition for all would have attracted young people and parents of teenagers. Although, as the Conservatives led the Leave campaign and they only want those from privileged backgrounds to go to university, that's never going to happen.

 

[najaB]

Although, as the Conservatives led the Leave campaign...

To be fair, while many of the leaders of Leave were Conservatives, 'The Conservatives' (as in the party position as espoused by its leader) were pro-Remain.

 

[D60]

To be fair, while many of the leaders of Leave were Conservatives, 'The Conservatives' (as in the party position as espoused by its leader) were pro-Remain.

Indeed... The Tory Party hierarchy has been determinedly pro-EEC/EU since the time of Macmillan... thru the 60s/70s/80s/90s/2000s thru to post-referendum...
Thus Heath (EEC Accession 1972/3), Thatcher (Single European Act 1986), Major (Maastricht 1992, and preparations for signing up to the Single European Currency), Cameron (Referendum on 'renegotiated terms' 2016, in which the official Tory Govt position was strongly for Remain.. to the extent that they never even planned for the outcome they were given... Govts do not offer referendums they expect to lose..!)..

 

[D60]

I still think Corbyn quite likely voted leave,

..... Whereas.. for a major part of that time (see post #7079) the Labour position has been far more 'sceptical'... Indeed, the Labour manifesto of 1983 was to Leave the EEC, after a 'transitional period' (!).. And this was the manifesto under which Tony Blair entered Parliament (his personal campaign literature in 1983 endorsed that position, sorry can't share links on this phone)..
And yes, Corbyn (he of "Oh Jeremy Corbyn"!) has for his whole political career, spoken out against, campaigned against, and voted against at every opportunity, EEC/EU membership, over a political lifetime (see post #7023)..