Cutting the Gordian Knot

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dspp
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Re: Cutting the Gordian Knot

Postby dspp » January 11th, 2017, 8:02 am

Clitheroekid wrote:
dspp wrote:However I have yet to hear from Brexiteers with non-City real skin in the game. Can you assist ?

Nobody can assist you as nobody has the faintest idea what will happen. ......You may as well consult an astrologer.


1. I have to make predictions in my area as a practicing engineer & company boss as I have a fiduciary duty to my shareholders to do so. Consulting astrologers or saying 'too difficult' doesn't cut it. Surely there is a pro-Brexit exporter from the UK who can show how this is a good thing.

2. Anybody quoting Dyson misunderstands badly and are making a category error. He is a Malaysian manufacturer (using a contract plant) who is an importer into UK/EU. Of course he wants to winkle the UK out of the EU so he can ditch the more rigorous EU standards he finds annoying. I have spent a fair amount of time with Dyson / ex-Dyson people and he most definitely is not a UK manufacturer. He wants more immigration, not less.

3. Long run returns from manufacturing companies are approx 5% dividends + 2% growth = 7% TR. There is ordinarily a relationship between dividends and net profit. In my area of the UK mittelstand at least the direct tariff results from a hard-Brexit WTO are of the order of 6% and if I add in non-tarriff and other associated multipliers a lot more. It doesn't take more than exceedingly simple maths to realise that the UK is about to move itself to the wrong side of a tariff barrier for its largest single market (EU), and (at best) gain no advantage at all in the other markets (WTO). Higher WTO tariffs are generally associated with higher value products, lower ones with more commodity products - so for the knowledge economy the WTO tariff system is running against the UK trend.

4. But don't take my word for it. Please can a pro-Brexit UK-based exporter please show me where I am wrong. Surely there is one here ?

regards, dspp

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Re: Cutting the Gordian Knot

Postby Richasdotcom » January 11th, 2017, 9:39 am

1nv35t wrote:
Richasdotcom wrote:the old Brexit myth of the EU not doing deals with others - they have more bilateral deals than anybody else. The early ones not branded as free trade areas but acting in the same way as the latter ones branded as FTAs. When we leave the EU we lose all of those.

The EU is a restrictive market, puts up barriers and quotas etc. The UK will be a more open market, easier for others (non-UK) to provide services/bid for contracts ...etc. unrestricted exports/imports.

Where that isn't reciprocated, then we can impose restrictions ... which tend to subsequently evolve into formal trade agreements (conditions/limits).

A less regulated, low tax, geopolitically stable country such as how the UK will be after Brexit, is a magnet for investment/trade. In contrast the EU might impose customs duties, quotas, access, red tape directed towards the UK in a trade agreement, or failing that have to accept WTO terms (for which a primary factor is not to discriminate). Going down the aggravated divorce route, would have the UK reciprocating harsh EU terms/conditions, which for one would be devastating for Ireland and a significant hit for the Germans. Any sensible pairing of negotiators with respect to Brexit is more likely to put aside political point scoring in favour of conditions that are more amicable to both sides.

The primary argument for retaining some form of Single Market membership is for the benefit of corporate structure/simplification. Without such membership (which is a given, given that all lead Brexit campaign on both sides said that the referendum was a vote to leave the single market, and that membership has enforced free movement) and we transition over to having single market access as per any other non-EU state. Corporate structures will need to adapt around that, typically by reporting to two entities instead of one and under such sub-division the UK is the more likely to retain the lion share. The Irish in awareness of that have been looking at specific rules such as directors having to reside in Ireland ...etc. however where one puts up such barriers, others for the sake of economic benefit will relax their rules (Luxembourg for instance). Catch 22, such that ultimately a more broad/common and amicable agreement is the more likely outcome. Simple grandfathering is IMO the more likely outcome (UK inherits the agreements, many of which are WTO based anyway, for which a agreement with the EU is also agreement with each individual entity within that). New members for instance inherit all EU agreements, being added as another country commonly sharing the same agreements. Reasonable for that to also work the other way around, with a departing member continuing to hold the agreements, until such times it might look to revise/drop individual cases itself.



Seems as though the cup runneth over rather than being half full. Unfortunately it is more than half empty. As a feee trader I wish it were true that countries will happily sign up to free trade in bilateral deals as you suggest is certain. Unfortunately it just ain't so, that is why the Doha round of WTO talks is still completely stuck. Indeed matters are getting worse with Trump threatening to tear up NAFTA, impose illegal (non WTO) tariffs on Mexico and just about anyone else. His attitude to Brexit it is to use it as an opportunity to steal UK trade. There is no queue of countries waiting to sign good free trade deals with the UK post Brexit, indeed China has scaled down the initiative Osborne was chasing since the vote.

Even friendly countries like Canada or New Zealand face difficulties with such deals as they have their own arrangements with third parties including the EU. This includes agreements on tariff free quotas of goods that are currently with the EU - adding to those quotas requires agreement/acceptance by their other trade partners to maintain the delicate balance currently under threat by Trump and others.

You are right that the EU places barriers to non members whilst opening up trade to EEA members. This is acceptable under the WTO - what would not be acceptable undeer the WTO would be a special deal for new post membership Brexit UK - The WTO insistence on non discrimination is with regard to all members in the same situation so protecting non EEA countries from the UK as a non EEA member being given special treatment.

To make matters even worse all our WTO deals and agreements are as an EU member, we don't have a clear default to "return" to, we would need to negotiate that with the same WTO that has nort progressed Doha since 2001.

Meanwhile the threat of sanctions potentially in breach of the WTO by us has relatively little weight compared to access to the US, EU and China. It is not a big stick, well not as big as the EU's stick anyway.

Now IF we were negotiating only with Germany and Ireland I think we would have a much better deal than having to please every one of the 27. They do have trade surpluses to the UK but most countries in the EU do not.We may have some sensible moderate potential allies on the other side of the table but we also have some who are deeply hostile to any break up contagion and want the UK to have a bad deal, even if that means Germany and Ireland suffer.

It really is not as simple, easy, straightforward as you believe and some Brexiters claim despite knowing it ain't so.

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Re: Cutting the Gordian Knot

Postby Richasdotcom » January 11th, 2017, 9:55 am

1nv35t wrote:
Richasdotcom wrote:The way we can tell it is not a tyranny is that it is not possible to list any tyrannical actions taken by the EU.

Like installing technocrats to replace democratically elected?

When Germany was in difficulties the Greeks wrote off significant amounts of German debt. More recently the Germans having lent irresponsibly to the Greeks (Greeks irresponsibly borrowed in order to buy German manufactured stuff), has the Germans laying the irresponsibility solely upon the Greeks ... installing technocrats to hit that home.

That's pretty oppressive (tyrannical/dictatorial) IMO.


Greece had a referendum on the proposed deal and the majority supported it. There was no imposition of tyrants, there was a deal where the creditors outlined their minimum requirements and the people of Greece accepted that deal.

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Re: Cutting the Gordian Knot

Postby BrianCaltox » January 11th, 2017, 1:49 pm

dspp wrote:Please can a pro-Brexit UK-based exporter please show me where I am wrong. Surely there is one here ?


I can give you one for starters...

dspp wrote:I have to make predictions in my area as a practicing engineer & company boss as I have a fiduciary duty to my shareholders to do so.


In UK company law, company directors do not have a fiduciary duty towards shareholders. None whatsoever. See Percival v Wright [1902].

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Re: Cutting the Gordian Knot

Postby 1nv35t » January 11th, 2017, 2:04 pm

Richasdotcom wrote:Greece had a referendum on the proposed deal and the majority supported it. There was no imposition of tyrants, there was a deal where the creditors outlined their minimum requirements and the people of Greece accepted that deal.

First time around they rejected it. Second time (few weeks later) they accepted it as the alternatives were too extreme. Very much a gun to the head based 'democratic vote'.

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Re: Cutting the Gordian Knot

Postby dspp » January 11th, 2017, 2:16 pm

BrianCaltox wrote:
dspp wrote:Please can a pro-Brexit UK-based exporter please show me where I am wrong. Surely there is one here ?


I can give you one for starters...

dspp wrote:I have to make predictions in my area as a practicing engineer & company boss as I have a fiduciary duty to my shareholders to do so.


In UK company law, company directors do not have a fiduciary duty towards shareholders. None whatsoever. See Percival v Wright [1902].


Check out the plural in my use of the term shareholders. It is significant, and correct.

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Re: Cutting the Gordian Knot

Postby BrianCaltox » January 11th, 2017, 2:54 pm

dspp wrote:Check out the plural in my use of the term shareholders. It is significant, and correct.


No, you are wrong. Directors have a fiduciary duty towards the company, not the shareholders. Sometimes these things are aligned, othertimes they are not. Given the potential for legal ramifications, including the risk of a derivative action from a minority shareholder I'd recommend a quick chat with the company solicitor.

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Re: Cutting the Gordian Knot

Postby dspp » January 11th, 2017, 3:33 pm

OK I get your point, do you get mine ?

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Re: Cutting the Gordian Knot

Postby BrianCaltox » January 11th, 2017, 3:38 pm

dspp wrote:OK I get your point, do you get mine ?


Not really. You asked a Brexit supporter to point out where you're wrong, and without any real in depth analysis I could see an obvious one, and as per your request I pointed it out.

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Re: Cutting the Gordian Knot

Postby dspp » January 11th, 2017, 4:24 pm

OK, so what we know so far is that Brexit supporters are keen on splitting hairs re "all shareholders" vs "company". No response so far on actual WTO tariff rates and likely financial implications. No response so far based on Brexit supporters with skin in the game in UK manufacturers who export. Shy ?

regards, dspp

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Re: Cutting the Gordian Knot

Postby mswjr » January 11th, 2017, 4:35 pm

If I may politely make two contributions.

1. To Hamzahf. Dyson is indeed arguing for more top end immigration from ROW. The point he makes is that uncontrolled immigration from EU is requiring UK Gov to restrict that immigration. In other words, not only are total immigration figures too high, but there is no control over quality- another Romanian car washer will block an Indian research engineer as part of a blunt attempt to hold back total immigration figures.
Being able to treat EU immigration as we do ROW will allow quality to drive quantity, not the other way around.

2. To dspp.
You ask to hear opinions from other UK based manufacturers. I note you picked up on my suggestion of Dyson, only to reject him (along with a couple of comments on his products). You did however, ignore the other suggestion- Bamford of JCB. I hope JCB would suit your definition of a UK manufacturer and you don't have to search very far to find his take on it. I accept he probably won't respond on here, though.

My business only exports a tiny fraction of overall activity. However, providing software and soft/ hardware systems for HR/ support, manufacturing/ processing lines, and logistics, mean we are very dependant on overall health of many manufacturing and other businesses. We are very interested in how they are viewing things.
By that measure, our experience may offer something of value.
In general terms, and trying not to look through a Brexiteer's fog, we have seen some activity deferred. No question. But, deferred, not cancelled.
Many Companies we deal with do not have major links with EU and are continuing as normal.
Exporters are almost all enjoying a Sterling dividend since June, and are sitting on the excess cash. This is where the deferred activity is coming from. The amount of deferred activity not surprisingly reflects individual percentages of EU activity modified by industry. Importers are being affected, but are now starting to pass those costs on. Most expect Sterling to harden over the next 12 months- but no- one knows of course.
None of the businesses we deal with have declared a crisis nor discussed job losses. Not one. Uncertainty is definitely a drag but not of itself terminal.
All want clarity. Don't we all? But it will come. And I could argue that clarity alone, whichever way things go, will release pent up activity across the economy as plans get activated.
That's our take. Up to you whether you dismiss it as Brexit rubbish.

ps I suspect few people involved with the correct running of a business would consider the difference between 'all shareholders' and 'the Company' as no more than splitting hairs. Please explain how their sympathy towards Brexit may affect that perspective.

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Re: Cutting the Gordian Knot

Postby BrianCaltox » January 11th, 2017, 4:46 pm

dspp wrote:OK, so what we know so far is that Brexit supporters are keen on splitting hairs re "all shareholders" vs "company". No response so far on actual WTO tariff rates and likely financial implications. No response so far based on Brexit supporters with skin in the game in UK manufacturers who export. Shy ?

regards, dspp


I'm not shy but I don't really want to debate with you because a denial that you were wrong on a point, now changed to 'splitting hairs' appears to be an unwillingness to accept you are wrong. What I'm 'splitting hairs' over could be the difference between running a business lawfully and going to prison. You may well think the difference between the two is slight - it is not.

So I politefully refuse your request to debate your points.

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Re: Cutting the Gordian Knot

Postby dspp » January 11th, 2017, 5:55 pm

msj -

Thanks, your personal insight is interesting.

Yes JCB is relevant and have clocked their views also with interest as they differ from mine. However they have 22 factories spread around the world so they can shift production around, including in Germany (though I don't know if their factories are as interchangeable in their production as Cat were once trying to become). That makes them somewhat different than manufacturers based predominantly in the UK who, essentially, live or die here.

regards, dspp

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Re: Cutting the Gordian Knot

Postby hamzahf » January 11th, 2017, 7:09 pm

mswjr wrote:1. To Hamzahf. Dyson is indeed arguing for more top end immigration from ROW. The point he makes is that uncontrolled immigration from EU is requiring UK Gov to restrict that immigration. In other words, not only are total immigration figures too high, but there is no control over quality- another Romanian car washer will block an Indian research engineer as part of a blunt attempt to hold back total immigration figures.
Being able to treat EU immigration as we do ROW will allow quality to drive quantity, not the other way around.


As far as I can tell reading the tables in the following link, the quota of places for Tier 2 have not been filled each month since April 2016.

https://www.gov.uk/government/publicati ... ember-2016

Dated November 2015, this link gives the Tier 2 shortage occupation list that includes many branches of engineering.

https://www.gov.uk/government/uploads/s ... r_2015.pdf

I understand your argument (although I don't agree that total immigration is too high), but as well as the possibility of employing EU engineers as readily as UK engineers, what is currently stopping Dyson applying for more ROW engineers through Tier 2? Is the list too restrictive for his business (I will grant that the list of engineers is quite restrictive to particular business areas)? Isn't widening the scope of the list to aid a company such as Dyson as sensible an approach to his problem as introducing controls for all EU citizens?

Regards
Hamzah

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Re: Cutting the Gordian Knot

Postby mswjr » January 11th, 2017, 7:35 pm

hamzahf wrote:
mswjr wrote:I understand your argument (although I don't agree that total immigration is too high), but as well as the possibility of employing EU engineers as readily as UK engineers, what is currently stopping Dyson applying for more ROW engineers through Tier 2? Is the list too restrictive for his business (I will grant that the list of engineers is quite restrictive to particular business areas)? Isn't widening the scope of the list to aid a company such as Dyson as sensible an approach to his problem as introducing controls for all EU citizens?

Regards
Hamzah


To avoid any doubt,
1. !t's not my argument but one I have seen reported and attributed to James Dyson. I do have sympathy with it, but can't claim it as mine!
2. A democratic majority would agree that in a political sense, immigration levels are 'too high'. And we are talking politics with Brexit. I'm not sure there currently is a more powerful metric than Overall Immigration figures right now. (Maybe excepting NHS, but it can be woven into that as well).

Beyond that, I don't know whether Dyson have difficulties with Tier 2 attribution or not. I really don't know.

However, the general point that overall immigration levels must be controlled as a political priority, and that uncontrolled EU immigration necessarily leads to greater restrictions from ROW, is offered simply because you professed not to understand his perspective.

As an argument though, it does I guess have no legitimacy if you start with a belief that immigration levels are not too high in the first place.

Yours,

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Re: Cutting the Gordian Knot

Postby TopOnePercent » January 11th, 2017, 8:25 pm

dspp wrote:
TopOnePercent wrote: The tyranny of the EU is by now well understood by all, however your attempt to link tyranny with doing too much is illogical and incorrect. ........ I don't spend a lot of time telling cute fluffy bunnies that they ain't scary. Why then do Europhiles spend so much effort telling us they don't fear Brexit. Could it perhaps be that it terrifies them, and they're hoping that if they can convince us that they're not terrified that one day maybe they can convince themselves?


I can't speak for the other poster but repeatedly confusing tyranny with democracy isn't a good start, and repetition doesn't make it any more correct. However I can say that I don't regard Brexit as a cute fluffy bunny pastime as it will in my opinion have far more serious consequences for people ill-placed to cope with the likely misery that will result. Hence taking the time to point out the problem.

Someone here recently asked if any Brexiteers with 'skin in the game' could give personal insight into the likely consequences. So far I have heard replies regarding what might happen to the City, which I found interesting & helpful especially because I am not sure I agree (which is another reason I bother to pay attention, as I might learn). However I have yet to hear from Brexiteers with non-City real skin in the game. Can you assist ?


Democracy is the tyranny of the many over the few. What else could it be?

There will be people ill placed to cope with the result, no matter if we stay in or leave. My old factory shift were spectacularly ill placed to cope with the influx from the EU and it had very serious consequences for them. Halting that trend will reverse some of their decline. For any change or none there will be winners and there will be losers.

I'm afraid I can't add value regarding non-City skin in the game as it was me that posted regarding the City special pleading that everyone inside the banks and the total absence of any realism to the idea we'd decamp for France/Switzerland/Germany et al.

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Re: Cutting the Gordian Knot

Postby TopOnePercent » January 11th, 2017, 8:31 pm

Richasdotcom wrote:The point I was trying to make was that the EU is not tyranical, it is a democratic organisation with checks and balances, elected representatives and representation and rightss for all nation states. The structure means that the default is compromise and concensus not tyranny.

The way we can tell it is not a tyranny is that it is not possible to list any tyrannical actions taken by the EU.



Not sure if serious. I presume you don't know any Greeks then? Their country was utterly ruined by the EU for nought more than a point of politics - whatever happens those German & French outfits holding the Greek debt they won't see 100% repaid with interest as due. Rather than accept that they have destroyed Greece.

Oddly, I don't recall voting for Junker. Maybe I was ill that day. Or just maybe sewn up deals behind closed doors, with a winner chosen from amongst the boys, just maybe, that isn't democracy.

So now we can tell its a tyranny.

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Re: Cutting the Gordian Knot

Postby TopOnePercent » January 11th, 2017, 8:35 pm

Richasdotcom wrote:
1nv35t wrote:
Richasdotcom wrote:The way we can tell it is not a tyranny is that it is not possible to list any tyrannical actions taken by the EU.

Like installing technocrats to replace democratically elected?

When Germany was in difficulties the Greeks wrote off significant amounts of German debt. More recently the Germans having lent irresponsibly to the Greeks (Greeks irresponsibly borrowed in order to buy German manufactured stuff), has the Germans laying the irresponsibility solely upon the Greeks ... installing technocrats to hit that home.

That's pretty oppressive (tyrannical/dictatorial) IMO.


Greece had a referendum on the proposed deal and the majority supported it. There was no imposition of tyrants, there was a deal where the creditors outlined their minimum requirements and the people of Greece accepted that deal.



Pointing a (fiscal) gun at someones head and saying "sign this or I blow your head off", does not amount to acceptance.

You know this already Rich, so my question is why the pointless line of argument? You're far too smart to believe this rot, so why post it?

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Re: Cutting the Gordian Knot

Postby dspp » January 11th, 2017, 8:54 pm

mswjr wrote:
hamzahf wrote:
mswjr wrote:I understand your argument (although I don't agree that total immigration is too high), but as well as the possibility of employing EU engineers as readily as UK engineers, what is currently stopping Dyson applying for more ROW engineers through Tier 2? Is the list too restrictive for his business


Beyond that, I don't know whether Dyson have difficulties with Tier 2 attribution or not. I really don't know.


Hamzah, msj,
Perhaps I can give some insight from having brought people in to design / mf teams in UK :
1. Dyson tries to recruit what he thinks are good engineers / scientists.
2. The UK simply produces too few, then the good ones either leave the UK, or leave science / engineering.
3. In order to bring in on work visas an employer first has to go through a lot of hoops to get on the UKBA sponsor scheme (easy if you are Dyson and have an HR dept); then the jobs have to fall into a defined category (again not too hard); then you have to show you've advertised widely in the UK (quite sensibly defined) and failed to find UK / EU nationals who fit the bill at the minimum per job-type wages (this is hard - if you remember that the EU is a big place - basically you have to lean on your interviewers / bodyshops to NOT find you the right person somewhere in the EU at what are fairly decent salaries, i.e. you have to skew your selection matrices); then you have to still be in-quota (generally easy in engineering); and have found the right & acceptable non-EU person who will do the job OK (generally easy if Asian, increasingly difficult if Western - we've seen people walk away from the UK from US/Can backgrounds over the last few years; colleagues tell me quality northern EU senior candidates are increasingly picky about coming to UK).
4. Overall the bureacracy in the scheme is designed to make it cumbersome, and almost impossible for micro-Asian businesses to bring in floods of their cousins. This has the effect of making it very difficult for micro/SME bona fide UK companies to do likewise, but also makes it only just about possible for the Dysons of this world to cope with - certainly not the laissez faire he would like.

Hope this helps. Please excuse nonPC sweeping statements - I am trying to get the gist of it over. The scheme does involve and my last experience was about 18m ago.

regards, dspp

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Re: Cutting the Gordian Knot

Postby hamzahf » January 11th, 2017, 9:29 pm

dspp wrote:Perhaps I can give some insight from having brought people in to design / mf teams in UK ...


Many thanks for the explanation. A relative worked in the UKBA compliance area, so has previously spelled out the many complexities of the Tier system to me.

I remain to be convinced that tight control and restrictions will be relaxed when we leave the EU. I note the kite flying about charging employers £1000 a year to employ a European. Tier 2 already attracts annual fees for the sponsor in that price range which might discourage an SME.

http://www.davidsonmorris.com/tier-2-visa-costs/

It strikes me that Dyson wants a relaxation in the rules with respect to employing foreign nationals. The government however appears to want to make life difficult for all foreign nationals by introducing complex schemes that rack up fees and much confusion when implemented arbitrarily by poorly trained civil servants.

Regards
Hamzah


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