Timmy has more fun elsewhere

PAYING FOR CONTINUED SINGLE MARKET ACCESS ISN’T WORTH IT

UK exports to the EU are some £133 billion a year. Average WTO tariff rates, which is what we would be stuck at sans Single Market membership, are around 3%. We would thus save £4 billion. This is less than the £8 billion cost. This is not worth it.

Now relax our conditions a little. The £4 billion is being saved by EU consumers. Or, if you want to consider elasticities of demand and all that, anything up to £4 billion is saved by UK exporters. At a cost of £8 billion to UK taxpayers. This is still not worth it.

20 thoughts on “Timmy has more fun elsewhere”

  1. But is this even remotely likely, given our current lords and masters?

    I have a Remain family member raging that Leave has no coherent plan for “what next”. Given that brexiteers weren’t uniformly ‘Right-wing’ that is probably to be expected, but I feel that it’s a fair complaint at present. From the perspective of a frustrated (and fearful) remainer, it looks very much like the Leave leadership have left the UK up shit creek and they don’t even know what a paddle is.

    Most of the economic and trade ideas I’ve read have been in places like this: i.e. not very likely to get implemented by politicians.

  2. Are the figures you quote just tariffs, or do they include additional cost of admin & paperwork?

    My guess is you’ll need to add on costs of additional paperwork and delays for import licences etc to that cost, in addition to the lost exports due to potentially high barriers to entry (e.g. one man band may easily export into the single market, but doesn’t have the resources to jump over the hurdles on his own so doesn’t export at all). No idea how you would get a sensible estimate of that though

  3. – “Leave has no coherent plan for “what next”.. From the perspective of a frustrated (and fearful) remainer, it looks very much like the Leave leadership have left the UK up shit creek and they don’t even know what a paddle is.”

    Like battery hens when the cage door is flung open.

  4. And that is called asking for Dane-geld,
    And the people who ask it explain
    That you’ve only to pay ’em the Dane-geld
    And then you’ll get rid of the Dane!

  5. What about tax relief for exporters equivalent to the tariff rate – net potentially no price change to our foreign customers? (Probably banned as state aid by EU?)

  6. Richards North’s Flexit is a plan, ignored by the great and good of course but there isa plan and right now it’s the only worth while thing on the table.

  7. @wat

    With the foxes? 🙂

    My question remains though: is there anyone remotely near to ‘power’ who has a coherent and publicly available plan for what happens next?

  8. Question: We have semi-autonomous regions nearby which are part of the EU customs union but are not member states of the EU: The isle of Mann and the channel islands.

    If I make cheese in the UK, but sell it to the French via an Isle of Mann company, and then ship it to France from the UK, would tariffs still apply?

  9. Ben S & Wat Dabney

    I think you might be being a tad unfair on the Leavers and their ‘lack’ of a plan. The referendum was a binary question: In or Out. That’s all. They were not standing for office and they would not be implementing the result; the people would be issuing an instruction. An instruction which the government had pledged to implement, as only they could, because they are the government.

    If there are to be criticisms for lacking a plan, they should be directed at the government. They knew they would be the ones in charge of implementing the result, whatever the outcome. They knew it was a question with only two possible answers. They knew it was not beyond the realms of possibility that Leave would win and yet they made no contingency plans. That, frankly, is disgraceful. For goodness sakes, the government has contingency plans for asteroid strikes.

    Anyway, as you say, we are where we are and it would help if our political class could get a grip. And our media could stop their hysterical hissy fit. Yes, they didn’t want the answer given, but it has been given and they could at least make an attempt to respect it.

  10. Meanwhile, all the value added by the workers at Nissan in Sunderland has magically become 12% cheaper. But no doubt Nissan will move it to Belarus just to teach us a damn good lesson.

  11. Bloke in Cornwall

    Trying to explain this to a few friends and they want me to prove it… have found info on 2015 exports to EU but can’t find WTO tariff rates… Does anyone know where i can find them?

  12. Bloke in North Dorset

    “Can the EU ban the UK government from dishing out state aid, when we’re not in the EU?”

    They could try WTO anti-dumping regulations to block or raise tariffs on our exports.

    Anyway, State aid for industry is generally a bad thing, as opposed to transition relief, so we shouldn’t be encouraging it.

  13. Anyway, State aid for industry is generally a bad thing, as opposed to transition relief, so we shouldn’t be encouraging it.

    Absolutely agree. I just wonder why we would care what the EU has to say on the matter.

    Local paper headline the yesterday was along the lines of “Brexit may put off Tata Steel rescue deals.” Seeing as the government was saying “sorry, can’t do anything boyos, the EU won’t let us”, I bet (I didn’t bother to read any further) the content of the story didn’t suggest that maybe now the government could reconsider.

  14. Saw a report on the BBC that civil service were told not to prepare contingency plans for a leave win, if that’s true then it’s gross negligence

  15. A point I’ve not seen mentioned so far is that it’s the Conservative party (advised by representatives from big business) that’s going to be negotiating the deal, the Conservatives are the party of big business, in large part funded by them. What are the odds they’re going to suddenly think “Hey! We could get rid of all that protectionism that benefits big business and go for free trade instead! What a great idea! Our supporters will be so grateful…”?

    Still, it’s a step in the right direction.

  16. ‘Remain’ didn’t have *a* plan either. Hard-left Remainers had a plan – subsume the UK within a single EU superstate. Hard-right Remainers had a plan – fight for increased flexibility to import increased numbers of cheap labour. ‘Remain’ and ‘Leave’ were movements, not political parties competing for office.

  17. @Paulthemanc

    ‘What about tax relief for exporters equivalent to the tariff rate – net potentially no price change to our foreign customers? (Probably banned as state aid by EU?)’

    I like this idea. Combine it with no import tariffs and you’ve got, from the companies pov anyway, global free trade. No longer a rush against the clock to sign trade deals, and every one you do sign effectively gives you it’s entire value in tax revenue.

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