Should We Leave the EU?

[Mvann]

The statistic I read was 45% of the UK's exports are to the EU, whereas less than 10% of the rest of the EU's exports come to the UK. If it came to imposing tariffs, they could hurt us more than we could hurt them. And they would simply be acting in the interests of their members.

Then we get into how we can avoid this by signing a free trade agreement with the EU... but that goes against most of the arguments I've heard for leaving...

Don't entirely agree. It would depend on the product. For instance, if French wine prices went up to much, people could buy from another country. That wouldn't be in the French national interest.

On the Irish subject, I think that's a bi lateral agreement, not an EU one.

 

[miami]

For globally traded goods, wages will only rise if productivity rises - UK has one of the lowest levels of productivity in the developed world partly because of an almost endless supply of cheap labour. Low wages have led to limited automation - if there is pressure to raise wages than there will be moves towards greater automation.

That's a good argument. Of course it will lead to further job losses, and it's going to be a big challenge of the 21st century in how to keep capitalism going in the face of increasing automation.

 

[Gutfright]

Is it possible (note I'm not saying this with any great confidence) that Brexit could actually make British businesses more efficient and thus, perhaps surprisingly, more competitive?

The theory being that, without a near infinite supply of cheap labour from Eastern Europe, British companies will have to buck their ideas up and reform their practices to compete. I've worked at a good few companies who were appallingly inefficient (if I told you some of the things I've seen going on, you most likely wouldn't believe me!) but still managed to turn over a decent profit, simply because they paid their workforce next to nothing.

Perhaps employers in this country need some shock therapy? If you lack the acumen to be able to pay your employees a decent wage, then sorry but you have no God-given right to be running a company. Move aside and let someone more skilled fill the void. Life is tough etc and so on...

 

[DelayRepay]

Don't entirely agree. It would depend on the product. For instance, if French wine prices went up to much, people could buy from another country. That wouldn't be in the French national interest.

Assume French wine prices go up, so we buy Australian wine instead.

In France, British car prices go up so they buy German cars instead.
In Germany, British car prices go up so they buy French cars instead.
In Spain, British car prices go up so they buy Italian cars instead.
In Britain the car manufacturer realises something is wrong and moves his factory to Poland.
The former British car workers can now spend their days drinking cheap Australian wine.

I think the point is, what's left of the EU is much bigger and they can still all trade with each other. Why would they want us to be part of their club if we've voted out?

 

[Gutfright]

That's a good argument. Of course it will lead to further job losses, and it's going to be a big challenge of the 21st century in how to keep capitalism going in the face of increasing automation.

With fewer and fewer workers being required to produce more and more goods (and services), perhaps 'keeping capitalism going' is an untenable goal? I truly believe that there will come a 'tipping point', a time when capitalism is no longer the best way of meeting human needs. I'm certain that this time will come at some point in the 21st century.

^This is in no way relevant to the EU debate: Please do not read!^

 

[miami]

With fewer and fewer workers being required to produce more and more goods (and services), perhaps 'keeping capitalism going' is an untenable goal? I truly believe that there will come a 'tipping point', a time when capitalism is no longer the best way of meeting human needs. I'm certain that this time will come at some point in the 21st century.

^This is in no way relevant to the EU debate: Please do not read!^

I suspect it will indeed happen, and when that happens I think being part of the EU will be better for the average man on the street -- the EU tends to have a more socialist outlook on life.

 

[radamfi]

Concerns in what way? On the assumption you're talking about EU citizens, will you require them to have visas to visit the UK? Will you instigate passport controls on the Ireland/Northern Ireland border?

I'm concerned that we won't be able to live, work and retire in the EU as easily as we can now.

 

[deltic]

With fewer and fewer workers being required to produce more and more goods (and services), perhaps 'keeping capitalism going' is an untenable goal? I truly believe that there will come a 'tipping point', a time when capitalism is no longer the best way of meeting human needs. I'm certain that this time will come at some point in the 21st century.

^This is in no way relevant to the EU debate: Please do not read!^

And yet more people are in work in the UK than ever before - automation has been destroying jobs for 1000s of years and we keep inventing new jobs. What is different is that we have lost a lot of well paid jobs that required manual skills and have replaced them with well paid jobs that require more academic type skills. Unfortunately the two skill sets are not always interchangeable.

The issue is very valid to the EU debate becomes UK tends to take a view that we should not be afraid of the future and let industries die because they will be replaced by others while France and some other countries tend to believe they should support "strategic" industries regardless of cost. So we have a view that the EU should mainly be about free trade - other countries believe more in fortress Europe which is about protecting jobs within the EU. This requires more harmonisation of rules on working conditions and taxation which effectively could lead to a single United States of Europe.

 

[Trog]

Assume French wine prices go up, so we buy Australian wine instead.

In France, British car prices go up so they buy German cars instead.
In Germany, British car prices go up so they buy French cars instead.
In Spain, British car prices go up so they buy Italian cars instead.
In Britain the price of EU made cars goes up, but fortunately the UK car industry has spare capacity to capitalise on this.

British car workers celebrate by drinking lager, while their middle managers drink cheap Australian wine.

We can play these games all night but anything could happen.

 

[HMS Ark Royal]

We can play these games all night but anything could happen.

Read that, Trog, and I got the Stingray theme tune running through my mind

 

[Antman]

You said wages are going to go up. That means that
1) People are going to be laid off
Or
2) The wage bill will rise

If the wage bill rises then prices will have to increase (or taxes in the case of the NHS)

If people are laid off then taxes will increase to pay the dole.

No it doesn't mean that at all, what we've got at the moment is a race to the bottom.

 

[Mvann]

Assume French wine prices go up, so we buy Australian wine instead.

In France, British car prices go up so they buy German cars instead.
In Germany, British car prices go up so they buy French cars instead.
In Spain, British car prices go up so they buy Italian cars instead.
In Britain the car manufacturer realises something is wrong and moves his factory to Poland.
The former British car workers can now spend their days drinking cheap Australian wine.

I think the point is, what's left of the EU is much bigger and they can still all trade with each other. Why would they want us to be part of their club if we've voted out?

Then the poles, Lithuanians, etc will go to Poland because there wages will be better there. Hence we won't have as high immigration.

 

[miami]

No it doesn't mean that at all, what we've got at the moment is a race to the bottom.

Please help me. Who's going to pay these higher wage bills? Or how are the wage bills going to stay the same without a decrease in the number of employees?

 

[DynamicSpirit]

Yes I take your point but there certainly is quite a bit of scaremongering going on.

I certainly don't see anybody who is here legally being forcibly being removed in the foreseeable future, many migrant workers are only here short term anyway and will gradually leave of their own free will.

Then you are not seeing stuff that already happens. I've already pointed out that tens of thousands of people are forcibly removed from the UK each year. They are of course removed for all sorts of reasons (in many cases, quite justifiably), but the fact is that many of those people were at some point prior to their removal living in the UK completely legally. In other words, people who are at a certain time here legally subsequently being removed from the UK (typically due to a change in their visa status) is something that does happen (and on a very large scale).

I'm not sure by what logic you can take something that already routinely happens in the UK and say that you can't see it happening in the future if we leave the EU, but it seems a rather naïve and optimistic viewpoint to me.
--- old post above --- --- new post below ---

Wages will rise because their will no longer be an endless supply of cheap labour.

Not quite true. If we leave the EU and many of those people are therefore prevented from coming to the UK, then that (metaphorically) endless supply of cheap labour will still exist, it's just a case that less of it will be located in the UK. Each individual employer will then be faced with the decision of whether to remain in the UK and possibly pay higher wages or to move the entire business abroad to where costs are lower. Obviously different businesses will make different decisions - some businesses will be easier to relocate than others, but it would be astonishing if no businesses decided to move to where the cheaper labour was.

 

[Busaholic]

403 threads and nobody has posited which way David Bowie would have swung lol

 

[ExRes]

That is entirely speculation on your part. It could well be that people are required to leave.

Oh dear, you expect to be taken seriously when you come out with comments like that?, so others aren't allowed to speculate but you are?

 

[HMS Ark Royal]

403 threads and nobody has posited which way David Bowie would have swung lol

*sniggers*

I thought that was public knowledge

 

[Antman]

Please help me. Who's going to pay these higher wage bills? Or how are the wage bills going to stay the same without a decrease in the number of employees?

Tell you what, if I seriously suggested on here that all rail staff should have their wages drastically cut so that we can have cheaper train travel what sort of response do you think I'd get?

 

[Gutfright]

403 threads and nobody has posited which way David Bowie would have swung lol

This is definitely the toughest question to be raised in this thread!

Although 'The Man Who Fell to Earth' was a Martian, he was definitely proud of English culture, particulaly naming Jerusalem as his favourite hynm. That makes me think 'Brexit'!

On the other hand, who is 'The Man Who Sold the World'? Could it be Cameron selling London to the oligarchs with their prostitutes and their severed limbs of murdered business rivals? Or maybe the EU selling their principles to the corporate elites? Or maybe neither?

 

[RichmondCommu]

Tell you what, if I seriously suggested on here that all rail staff should have their wages drastically cut so that we can have cheaper train travel what sort of response do you think I'd get?

.
I think you're losing the plot. High wages equals high inflation which equals high interest rates. High wages plus export tariffs will ensure that we price ourselves out of EU markets. Oh well at least we can stop all the people that you don't like coming into this country so everything will be sweeeeeeeeeeet.

 

[anme]

Oh dear, you expect to be taken seriously when you come out with comments like that?, so others aren't allowed to speculate but you are?

Where did I say people can't speculate?! Absolutely people can speculate. But we must separate speculation from fact, and be aware that it is only speculation. Therefore, writing off my concerns as "scaremongering" with no evidence is horribly complacent. There are peoples' livelihoods, families and friends at stake here - things that dare I say are more important than money.

 

[Xenophon PCDGS]

It has been said before that this website is not one that accurately reflects how the electorate themselves actually vote but is normally more reflective, percentage wise, of a view of one particular political viewpoint.

However, as did so occur at the time of the last referendum held in 1975 (at that time I was 30 years of age) upon this subject matter, there will be coalitions of political figures of all hues making unlikely alliances in both the yes and no camps. in the political campaigning arena.

 

[DelayRepay]

Please help me. Who's going to pay these higher wage bills? Or how are the wage bills going to stay the same without a decrease in the number of employees?

Tell you what, if I seriously suggested on here that all rail staff should have their wages drastically cut so that we can have cheaper train travel what sort of response do you think I'd get?

I would tell you that rail workers are in a good position because:
- The service the provide is a necessity for many people (to get to work) and therefore is price inelastic.
- Their employers operate a virtual monopoly
- Their industry overall is subsidised
- In many cases they require a unique set of skills which take time to acquire and are not readily available on the labour market.

Therefore this is not a sensible response to the question asked by paulweaver. On this forum we like supermarket analogies so I will pose a question of my own:

If Sainsburys decided to increase their workers' pay by 10% and as a result increased their prices by 10%, would their total volume of sales stay the same? Of course not, people would start shopping at other supermarkets and Sainsburys overall sales would fall. People who do still shop at Sainsburys would either buy less (cut out treats and luxuries) or buy cheaper brands.

Think of Sainsburys as a post EU Britain. The other supermarkets are the rest of the EU, still enjoying cheap labour and therefore able to offer lower prices.

At a basic level yes reducing the labour supply does increase wages but macroeconomics is more complex than that. You need to consider the effect on overall consumer demand, imports/exports, inflation, unemployment, tax revenue...

The way to increase wages is to increase efficiency and move from a low skilled workforce to a highly skilled workforce (like your train driver example).

 

[Antman]

.
I think you're losing the plot. High wages equals high inflation which equals high interest rates. High wages plus export tariffs will ensure that we price ourselves out of EU markets. Oh well at least we can stop all the people that you don't like coming into this country so everything will be sweeeeeeeeeeet.

Clearly you're the one losing the plot!

What we have at the moment is a race to the bottom, higher wages means less profit for big business!

 

[deltic]

.
I think you're losing the plot. High wages equals high inflation which equals high interest rates. High wages plus export tariffs will ensure that we price ourselves out of EU markets. Oh well at least we can stop all the people that you don't like coming into this country so everything will be sweeeeeeeeeeet.

High wages do not equal high inflation - Norway has high wages and low inflation. Zimbabwe had hyperinflation and poverty wages.
--- old post above --- --- new post below ---

On this forum we like supermarket analogies so I will pose a question of my own:

If Sainsburys decided to increase their workers' pay by 10% and as a result increased their prices by 10%, would their total volume of sales stay the same? Of course not, people would start shopping at other supermarkets and Sainsburys overall sales would fall. People who do still shop at Sainsburys would either buy less (cut out treats and luxuries) or buy cheaper brands.

Think of Sainsburys as a post EU Britain. The other supermarkets are the rest of the EU, still enjoying cheap labour and therefore able to offer lower prices.

At a basic level yes reducing the labour supply does increase wages but macroeconomics is more complex than that. You need to consider the effect on overall consumer demand, imports/exports, inflation, unemployment, tax revenue...

The way to increase wages is to increase efficiency and move from a low skilled workforce to a highly skilled workforce (like your train driver example).

To take your analogy further - Sainsbury will first be faced by shortage of labour and will then have to decide what to do. If it increased wages without improving productivity it would lose market share as you state. Hence it is more likely to decide to either replace increasingly expensive labour with automation (self service tills and in due course robots restacking shelves) or change working practices to increase productivity or it will do what my company does and offshore more and more work to lower cost locations - in Sainsbury's example that would be back office functions.

 

[Antman]

I would tell you that rail workers are in a good position because:
- The service the provide is a necessity for many people (to get to work) and therefore is price inelastic.
- Their employers operate a virtual monopoly
- Their industry overall is subsidised
- In many cases they require a unique set of skills which take time to acquire and are not readily available on the labour market.

Therefore this is not a sensible response to the question asked by paulweaver. On this forum we like supermarket analogies so I will pose a question of my own:

If Sainsburys decided to increase their workers' pay by 10% and as a result increased their prices by 10%, would their total volume of sales stay the same? Of course not, people would start shopping at other supermarkets and Sainsburys overall sales would fall. People who do still shop at Sainsburys would either buy less (cut out treats and luxuries) or buy cheaper brands.

Think of Sainsburys as a post EU Britain. The other supermarkets are the rest of the EU, still enjoying cheap labour and therefore able to offer lower prices.

At a basic level yes reducing the labour supply does increase wages but macroeconomics is more complex than that. You need to consider the effect on overall consumer demand, imports/exports, inflation, unemployment, tax revenue...

The way to increase wages is to increase efficiency and move from a low skilled workforce to a highly skilled workforce (like your train driver example).

Or maybe Sainsburys would just have to accept a lower profit margin?

 

[deltic]

Or maybe Sainsburys would just have to accept a lower profit margin?

But if return to shareholders falls then people or more likely your pension fund would disinvest - share price falls making it more difficult for company to raise funds to invest in the business and more likely to be taken over by a company looking to strip out costs and get a better return on their investment

 

[Tetchytyke]

Are we talking of total exports or just exports within the present EU? Some of the EU Countries exports to the uk are quite high in just inter EU terms. I have seen a report in one of the financial papers saying which countries could be hit the worst on the export front.

I found this off google and thought it an interesting article (I referenced it further up the thread too):

http://www.niesr.ac.uk/blog/after-brexit-how-important-would-uk-trade-be-eu#.Vs2WCvmLTcs

Between 40% and 50% of our exports are to EU countries. Taking the whole EU as a bloc about 15-20% of their exports are to the UK. But there are only two countries- Ireland and Cyprus- where exports to the UK account for more than 10% of their exports. By comparison, some countries do 30% of their total trade with Germany.

If we left we would remain an important trading partner with the EU, but I think the idea that the EU are so reliant on us that they'd bend over backwards for us to be fanciful. I'd say we need them more than they need us.

 

[Iskra]

I found this off google and thought it an interesting article (I referenced it further up the thread too):

http://www.niesr.ac.uk/blog/after-brexit-how-important-would-uk-trade-be-eu#.Vs2WCvmLTcs

Between 40% and 50% of our exports are to EU countries. Taking the whole EU as a bloc about 15-20% of their exports are to the UK. But there are only two countries- Ireland and Cyprus- where exports to the UK account for more than 10% of their exports. By comparison, some countries do 30% of their total trade with Germany.

If we left we would remain an important trading partner with the EU, but I think the idea that the EU are so reliant on us that they'd bend over backwards for us to be fanciful. I'd say we need them more than they need us.

That would quickly change if we left the EU. Big business likes Britain because we're a borderline tax-haven, with a work force that is relatively easy to dispense with and is in an excellent position to export to Europe. If we make it harder to export to Europe by leaving the EU, we would essentially be committing economic suicide.

Unfortunately, I don't trust the British public to understand the economics of the situation and I'm deeply concerned that we will be dragged to our demise due to narrow-minded racism towards migrants.

 

[tony_mac]

Taking the whole EU as a bloc about 15-20% of their exports are to the UK.

That's wrong - it's excluding the exports to other EU countries; otherwise those figures make no sense.

It's also almost entirely irrelevant; the EU is much larger than the UK, so obviously the UK has a much smaller share.
That doesn't in any way rule out a bilateral trade agreement, or they would hardly exist.
(I'm sure Iceland, South Korea, etc. are also much smaller than the EU).

EU Exports for December 2015 are £10.4 billion.
EU Imports for December 2015 are £17.0 billion.
https://www.uktradeinfo.com/Statistics/OverseasTradeStatistics/Pages/EU_and_Non-EU_Data.aspx