Another new Brexit thread

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Gaudion M said:
I work in an investment Bank and have been working on the plans to restructure the business around brexit. It us true that most of the work is done or the switch ready to be flicked, not all but most. What is yet to filter through though is the tax implications. The Banks have had to transform branches in to standalone legal entities and that means they pay tax and get regulated where previously they operated as a branch under the Eu passporting regime. The big driver is the regulation, you only want to be regulated once and the passport regime does that at its core. Once we fall outside the BoE as regulator is not recongnised in the EU and you would duplicate the regulation on a UK Bank operating in the EU. So those 'branches" are are ready to convert in very short notice.

The implication of this are:-

A, More banking activity moving to the EU
B, Tax payable in the EU - not the UK
C, Less relevance of BoE and more for EU law (these will diverge over time)
D, More jobs moving to the EU as a result of C (firms will be EU firms subject to EU regulation and face to face regulator meetings will be in major EU cities, accounts filed locally, employment law locally etc etc).
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Interesting.
Backs up the point that the large FS companies will not unduly suffer from Brexit, but the UK certainly will due to less tax being received and because of the migration of high paying jobs abroad, with the consequent lower demand for the lower paid jobs that are there to support the big companies in the UK and also are there as a result of the high earners spending their money in this country.
So a lower tax take and fewer jobs but the very rich will not suffer unduly. That's ok then, no problem for BoJo and his mates!
 
west didsblue said:
Interesting.
Backs up the point that the large FS companies will not unduly suffer from Brexit, but the UK certainly will due to less tax being received and because of the migration of high paying jobs abroad, with the consequent lower demand for the lower paid jobs that are there to support the big companies in the UK and also are there as a result of the high earners spending their money in this country.
So a lower tax take and fewer jobs but the very rich will not suffer unduly. That's ok then, no problem for BoJo and his mates!
Click to expand...

It is what will happen over time that will be most significant, i have said this before but will say it again. The American firm I work for employs roughly 10k people in the UK and 2k in the EU but the activity is in reality 80% EU and 20% UK. London as a financial center competing with others is in a massively dominant position but that means it is very easy for alternatives to target that dominance. In Dublin as an example there are big incentives for firms to move operations / activity there. Over time brexit will push firms out of London where there is already a strong pull. The loss of operating costs (office rents and other costs which are income going into the UK economy), and knock on impact of loss of high paid jobs as well as the direct tax take on those jobs that is going to be the most significant issue but it will be a slow burn over many years.
 
west didsblue said:
Interesting.
Backs up the point that the large FS companies will not unduly suffer from Brexit, but the UK certainly will due to less tax being received and because of the migration of high paying jobs abroad, with the consequent lower demand for the lower paid jobs that are there to support the big companies in the UK and also are there as a result of the high earners spending their money in this country.
So a lower tax take and fewer jobs but the very rich will not suffer unduly. That's ok then, no problem for BoJo and his mates!
Click to expand...

I think it would be wrong to suggest that BoJo is driving this for personal gain. It may be true that he chose to back Brexit back in 2016 for personal political gain, but that's in the past. The political gain has now been achieved - he's the bloody PM!

So why is he so hell bent on driving something through which by all accounts he was undecided about in 2016 (before plumping for Leave)? I don't think it's for any personal gain, since I can't see what gain he would have. I think it's genuinely because he fears for an existential threat to the Tory party unless it delivers on the promise to implement Brexit. He's probably right.
 
Chippy_boy said:
I think it would be wrong to suggest that BoJo is driving this for personal gain. It may be true that he chose to back Brexit back in 2016 for personal political gain, but that's in the past. The political gain has now been achieved - he's the bloody PM!

So why is he so hell bent on driving something through which by all accounts he was undecided about in 2016 (before plumping for Leave)? I don't think it's for any personal gain, since I can't see what gain he would have. I think it's genuinely because he fears for an existential threat to the Tory party unless it delivers on the promise to implement Brexit. He's probably right.
Click to expand...

Yep he's prepared to fuck the country to save the Tory party.
 
Chippy_boy said:
I think it would be wrong to suggest that BoJo is driving this for personal gain. It may be true that he chose to back Brexit back in 2016 for personal political gain, but that's in the past. The political gain has now been achieved - he's the bloody PM!

So why is he so hell bent on driving something through which by all accounts he was undecided about in 2016 (before plumping for Leave)? I don't think it's for any personal gain, since I can't see what gain he would have. I think it's genuinely because he fears for an existential threat to the Tory party unless it delivers on the promise to implement Brexit. He's probably right.
Click to expand...
I agree with you. I don't think that's his primary motivation. It's always been about power and if he can secure an election victory in the middle of the chaos of a No Deal Brexit based on the message that only he can lead us out of the chaos like he led us out of the EU then that's job done as far as he's concerned. The fact that the country will be going to hell in a hand cart is only a passing concern if he's securely in place as PM for a few years.
It does help that the top 0.1% of the population won't lose out as much as the rest though.
 
Gaudion M said:
I work in an investment Bank and have been working on the plans to restructure the business around brexit. It us true that most of the work is done or the switch ready to be flicked, not all but most. What is yet to filter through though is the tax implications. The Banks have had to transform branches in to standalone legal entities and that means they pay tax and get regulated where previously they operated as a branch under the Eu passporting regime. The big driver is the regulation, you only want to be regulated once and the passport regime does that at its core. Once we fall outside the BoE as regulator is not recongnised in the EU and you would duplicate the regulation on a UK Bank operating in the EU. So those 'branches" are are ready to convert in very short notice.

The implication of this are:-

A, More banking activity moving to the EU
B, Tax payable in the EU - not the UK
C, Less relevance of BoE and more for EU law (these will diverge over time)
D, More jobs moving to the EU as a result of C (firms will be EU firms subject to EU regulation and face to face regulator meetings will be in major EU cities, accounts filed locally, employment law locally etc etc).
Click to expand...

Wait so a no deal Brexit will fuck the bankers and mean less reliance on London as an overwhelming centre for GDP due to the financial services industry migrating, meaning that any future Government will have to rebuild the UK's infrastructure and production industries taking advantage of the geographical uniqueness of the country rather than continuously milking the same cow that has led us to be the only major world economy that has a single and overwhelming source of its GDP in one city?

wtf i love brexit now
 
Damocles said:
Wait so a no deal Brexit will fuck the bankers and mean less reliance on London as an overwhelming centre for GDP due to the financial services industry migrating, meaning that any future Government will have to rebuild the UK's infrastructure and production industries taking advantage of the geographical uniqueness of the country rather than continuously milking the same cow?

wtf i love brexit now
Click to expand...
every cloud and all that. I wonder where they will get the investment money to rebuild if not from the financial services industry though? Its a teaser for sure.
 
Saddleworth2 said:
every cloud and all that. I wonder where they will get the investment money to rebuild if not from the financial services industry though? Its a teaser for sure.
Click to expand...

If only there was a system for this. Perhaps some sort of person or maybe a collection of them who could give us money that we would invest into infrastructure that would stimulate the economy, leading to greater tax revenues but much more importantly greater consumer spending and we could use some of the proceeds of that growth to give them their initial bit of funding back?

Man what a world that would be.
 
Damocles said:
If only there was a system for this. Perhaps some sort of person or maybe a collection of them who could give us money that we would invest into infrastructure that would stimulate the economy, leading to greater tax revenues but much more importantly greater consumer spending and we could use some of the proceeds of that growth to give them their initial bit of funding back
Man what a world that would be.
Click to expand...
Reintroduce war bonds!
Whenever I move through Europe I see far greater use of EU investment in infrastructure projects than I ever do here. Is that the fault of the EU or how our government applies and prioritises the target for those investments? What I do know is that the state of our transport infrastructure and how it is maintained and run is nothing short of a national disgrace.
 
Saddleworth2 said:
Reintroduce war bonds!
Whenever I move through Europe I see far greater use of EU investment in infrastructure projects than I ever do here. Is that the fault of the EU or how our government applies and prioritises the target for those investments? What I do know is that the state of our transport infrastructure and how it is maintained and run is nothing short of a national disgrace.
Click to expand...

I don't know this, but I seem to recall reading that we have quite a lot of EU investment in this country comparatively? I'm not sure, is probably the best answer.

However the overall point that you can't grow an economy without investing in it and that's going to require moving into more national debt is pretty much sound. This is why these international institutions exist to lend money out and get over the "not enough money to invest, too small to stand still" problem
 
Damocles said:
Wait so a no deal Brexit will fuck the bankers and mean less reliance on London as an overwhelming centre for GDP due to the financial services industry migrating, meaning that any future Government will have to rebuild the UK's infrastructure and production industries taking advantage of the geographical uniqueness of the country rather than continuously milking the same cow that has led us to be the only major world economy that has a single and overwhelming source of its GDP in one city?

wtf i love brexit now
Click to expand...
The Financial Services sector contributes 6.9% of the UK's total, half of which is in London. Not sure that the 3.5% can count as overwhelming.

What would be unfortunate is if the £44bn balance of trade surplus in this sector and the £29bn in tax paid to the exchequer was to be significantly reduced as a result of Brexit.
 
Damocles said:
Wait so a no deal Brexit will fuck the bankers and mean less reliance on London as an overwhelming centre for GDP due to the financial services industry migrating, meaning that any future Government will have to rebuild the UK's infrastructure and production industries taking advantage of the geographical uniqueness of the country rather than continuously milking the same cow that has led us to be the only major world economy that has a single and overwhelming source of its GDP in one city?

wtf i love brexit now
Click to expand...

Financial services are worth 6.5% of GDP, I wouldn't exactly call it overwhelming. Manufacturing is worth 18%...

The most important reason to have strong financial services is because it provides access to finance for every single business.

Without that access, you don't have any business or if it all goes to pot everyones money disappears. This is why the banks were bailed out.

Damocles said:
If only there was a system for this. Perhaps some sort of person or maybe a collection of them who could give us money that we would invest into infrastructure that would stimulate the economy, leading to greater tax revenues but much more importantly greater consumer spending and we could use some of the proceeds of that growth to give them their initial bit of funding back?
Click to expand...

What's your plan to deal with risk? What if I borrow say £50k and it all goes to pot?
Should the taxpayer just underwrite that loss multiplied by the thousands of businesses that it happens to every single year?
 
inbetween said:
Financial services are worth 6.5% of GDP, I wouldn't exactly call it overwhelming. Manufacturing is worth 18%...
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Don't worry, that 18% will be brought down as well thanks to a No deal Brexit. But the 0.12% of the economy that constitutes that UK fishing industry should be able to grow to fill the gap. That and charity shops.
 
west didsblue said:
The Financial Services sector contributes 6.9% of the UK's total, half of which is in London. Not sure that the 3.5% can count as overwhelming.
Click to expand...

When you break down GDP by industry sector, the "Business and Finance" sector in London which is admittedly bigger than just the Financial Services industry, contributes more to GDP than the next 4 cities combined (their total GDP, not broken into sector). Our economy is unbelievably slanted geographically in comparison to other comparable countries.

inbetween said:
What's your plan to deal with risk? What if I borrow say £50k and it all goes to pot?
Should the taxpayer just underwrite that loss multiplied by the thousands of businesses that it happens to every single year?
Click to expand...

Should the taxpayer underwrite losses on taxpayer funded projects managed by the Government they elected in order to stimulate the economy and financial wealth of the taxpayers?

Yes? I mean we could ask the Germans to do it but they might be a bit hesitant.
 
Damocles said:
When you break down GDP by industry sector, the "Business and Finance" sector in London which is admittedly bigger than just the Financial Services industry, contributes more to GDP than the next 4 cities combined (their total GDP, not broken into sector). Our economy is unbelievably slanted geographically in comparison to other comparable countries.
Click to expand...
The way to resolve that is surely not to throw away the bit that's doing well but to have a government that puts in place an environment that encourages the growth of the other areas of the economy.
 
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