Compare and contrast

July 18:

Anyone who knows anything about business knows that it is cash flow crises that kill businesses. It’s not, in my opinion, tariffs, changed regulation, the Irish border, disinvestment or anything else that will deliver mayhem in the UK next year. It’s something much more prosaic that will do that. It will be giant traffic jams at ports that will impose lasting damage on the UK. So many businesses will suffer crippling cash flow problems the impact could be massive, and cumulative of course.

Mark Carney has said he may need to reduce interest rates to compensate for Brexit. He’s not got much scope to do so. And the cost of money will not be the issue next year. It will be its absence that will matter as debts do not get paid. This is the coming crisis of Brexit. And it is beyond Mark Carney’s reach to address it.

The government could though. It will be the only creditor able to waive what is owing next year and survive the experience. PAYE, VAT and other sums owing may have to be put on hold if business is to survive Brexit, in my opinion.

That is, don’t collect taxes owed during the chaos.

July 20:

The government has now suggested how it will respond to the suggestion that Dover will cease to function in the case of a No Deal Brexit. According to the FT:

The UK government will instruct officials to relax efforts to collect border taxes if Britain leaves the EU without a withdrawal deal, a junior minister told peers on Thursday.

Speaking to a House of Lords subcommittee, Mel Stride, financial secretary to the Treasury, said the government knew it would have to balance security concerns, revenue expectations and the pressure to keep goods flowing across borders.

“We will not compromise on security,” Mr Stride said. “But there will, perhaps particularly in the case of a place like Dover, where you have to keep flow moving very quickly or you have all sorts of problems, there will be a trade off between keeping the flow going and revenue protection.”

He added: “The priority will be to keep flow moving”.

This is is a quite extraordinary statement. First, it acknowledges that there will be a break down in law and order.

Second, it acknowledges that the resultin criminality will be permitted.

Third, it admits that an unfair playing field, biased against honest domestic businesses, will be created as importers not paying VAT will be able to undermine them.

How outrageous that the government intends to do what I said government should do, don’t collect taxes during the chaos.

D’ye think he’s even noted the reversal?

16 thoughts on “Compare and contrast”

  1. Actually the question is “does he care?” to which the answer is “No, of course he doesn’t”
    He seems to think that “1984” is a textbook, not a warning.

  2. Er, hang on! How much of the goods coming in through Dover will be going direct to end-users? If they’re entering the retail chain & are VATable, VAT will be charged at the point of sale. In which case, somewhere up the supply chain, someone will be collecting VAT on a sale, without the matching VAT paid on the input invoice. So can’t recover it. Net effect looks zero, to me.

  3. ‘if Britain leaves the EU without a withdrawal deal’

    A crack in the iceberg. The government recognizes the possibility!

  4. The Meissen Bison

    D’ye think he’s even noted the reversal?

    I’m not sure that that’s ever an issue for a die-hard contrarian.

  5. I would like to point out that I invented this comparison. I will be speaking to my lawyers (who do not exist)

  6. This must have been a tough call for him; does he denounce it as Tory policy, or does he claim to have invented it and that the government are following his advice?

    Watch; he may do both.

  7. As you know I moved to Ely and have found my neighbour to be a bit of an oddball. At least he’s removed the Berlingo from my drive. He’s bought himself an ex army surplus snatch landover – which he’s had uprated with the full steel mesh over the windows and over the lights , the full works. He’s also started some major building work on his semi – the builders have told me they are excavating an underground bunker under the house with space for 3 years worth of food- I thought it odd when i saw tesco delivering 1000 tins of spam and the same number of cans of beans. I tried speaking to him about all this work, but all i got was “BREXIT you damn fool, we are all going to starve – you won’t scoff then , and by the way the moats being dug next week.” I suspect he’s been watching too many episodes of the “walking dead”
    That was strange enough but today i found a note pushed through my letterbox – the contents of which I’ll post here.The note says -” dear Moqi – i’m the brother of your neighbour R̶i̶c̶h̶a̶r̶d̶ Profesor Murphy. I am rather concerned at the mockery he is subject to from you and your fellow reprobates at timworstalls. As he says , he’s a real professor – he has got the uniform and the medals to prove it. I was a bit doubtful at first about the uniform as it makes him look like a dyspeptic Herman Goering, but he swears blind that all the really important professors wear one. At least the triple row of medals have solved the mystery of the disappearing christmas tree decorations that R̶i̶c̶h̶a̶r̶d̶ Professor Murphy had blamed on tiddles the cat. He notes that none of you are a real professor and have a uniform and a VC and bar in economics. So please stop taking the piss.
    Secondly Moqi it would be really helpful if you personally stopped referring to yourself as “Lord Worstall” and renamed your house back to DUNROAMIN from “House of Lord”, plus you look ridiculous swanning around in ermine – do you know how much it costs to have to call out the vet to give him a horse tranquilizer? Plus the cost of replacing all the carpets and rugs with laminated flooring because of the bite marks is not a laughing matter – so please stop.
    Furthermore he’s told me he keeps on having flashbacks to his time in Dachau. Strangely enough although I’m his twin brother I can’t remember that – he probably means Grammar school. I thought he enjoyed his time at grammar school – i remember him telling me he had been made house perfect and showing me his badge. When i pointed out that it actually said prefect he said “and what would you know being too thick to pass the 11 plus?” He’s got a point there though it is pretty annoying to be reminded of this fact on every Christmas and birthday card I receive from him. But I digress. Can you please tell your fellow reprobates to stop being rude about my brother – he is one of the finest minds this country has ever produced or so he tells me and it’s just not fair. Yours J Murphy.”

    So fellow reprobates what to do?

  8. Bloke in Costa Rica

    All of this apocalyptic stuff is shroud-waving shit intended to alarm and confuse. There will be no breakdown in the movement of goods or capital.

  9. Next week – I’m an ideas man, and have helped to make the world a better place, what have you ever done
    Next week+1day – the world is appalling, neoliberalism and inequality are rising to the detriment of us all
    Never – sometimes doing nothing is the best thing to do of all

  10. The initial supply side shock may or may not cause a political problem but poor Policies take a long time to be connected with poor consequences .
    We Nationalised most of the UK economy after the war and , for decades threw borrowed money at a non functioning supply side . Result. Inflation natch and underperforming compared tom our neighbours of course
    Brexit will make the UK the worst place in Europe to set up a business. The problem is not so much will Nissan or Toyota wind down , they may well but the real problem is that no-one will take their place.
    That is the visible end of it ( the only bit politicians care about ) but at a much lower level exporting start ups are not going to like being outside the EU capital in the UK will not be useful in the EU as it was under passporting which rules, the UK out of Financial Services
    This structural weakness on many levels is the true Brexit disaster and the fools who did it will all die long before their guilt is truly, known .

  11. Such is Spud’s hatred of the Tories that he passionately believes that they can never do the right thing in any circumstances – even when they do what he has previously recommended!

    He should see a psychiatrist.

  12. Trouble is, Theo, the Tories not being able to do the right thing in any circumstances is the odds on favourite, on the current form.

  13. When you’re trailing a horse with one lung & three legs by half a dozen lengths you have to ask whether your nags only fit for the knackers yard.

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