:brexit: Brexit - The Ramifications

[Sorry for the late reply but I started posting this in a tent in Dorset and didn’t finish it. Discourse helpfully remembered what I was on about…]

Yep, I’ll acknowledge that these things are probably true and that EU has a role in setting them. Not being obstructive with ‘probably’ - I just don’t know the details.

Whilst the EU mandates a 15% minimum, I believe the last time our standard rate VAT was that low was in 1991 - since which it’s been 17.5% or 20%.

So whilst I can see that you feel that the EU is forcing a VAT restriction on us, successive governments have already been charging over this. So this hasn’t for some time, technically, been a restriction.

Also, the term luxury sounds emotive, but in VAT parlance it simply means non-essential - your point about fuel being classified as luxury is well made - but it does attract VAT at a quarter of the UK standard rate.

Its impact is also alleviated a little by government and energy company concessions. And VAT on vehicle fuel isn’t the problem, it’s UK government duty that is the problem. You point as fuel as a luxury good is valid though.

But the whole issue of mandating VAT levels is not out of some sort of vindictive desire to make countries across Europe suffer, it’s probably the only way you can make a good move freely across borders without creating unfair, or race-to-the-bottom conditions.

Having a minimum VAT rate, which as I’ve already suggested hasn’t technically had an impact on our Government’s position since 1991 - 27 years ago, is part of allowing trade to happen frictionlessly.

I understand the argument that says, “if we leave the EU, we won’t have to implement a minimum VAT rate” but the corollary of that is that we won’t be able to access free trade across borders in Europe either.

Again, for clarity, I can also understand the argument that goes on to say that “sacrificing free trade with the EU is worth it so we can set our own VAT rates”.

But let’s explore that a little further, and let’s start with a clarification on VAT because in this post…

…it seems to suggest that the French and German energy companies were in some way benefitting from taxation raised via VAT on fuel.

VAT is a tax collected by business on behalf of the government. It isn’t kept by the company collection it, although the VAT it pays to generate its business is offset against the VAT it collects for the government.

So I’m not sure what the point about French and German companies is here? They would be generating VAT revenues for the UK governement in this instance.

In a post-Brexit, no-deal world, let’s assume that we are free to reduce our VAT rates or even remove VAT completely. That seems to me like it will have two impacts.

Firstly, direct taxation would need to be raised to meet the reduction in government tax income. VAT take will need to be replaced by something else. I guess a UK sales tax could be implemented to make up for the shortfall. And I guess removing VAT and replacing it with a tax that helps the poorest more would be welcome.

Secondly, I’d expect the EU to slap import tariffs of say, 15% on goods entering the EU from the UK to protect its closed, internal market. I imagine the UK would almost certainly have to mirror or respond to this by slapping import duties of say, 15% for EU goods. If this happened, the result would be prices rising across the board for anything we import from the EU including those things the very poorest in our society might buy.

If the EU didn’t do this, we’d be a low-cost means for EU countries to source everything. It’s the Northern Irish border issue but in reverse.

This is why, as I understand it, May’s Brexit whitepaper states we will keep VAT at EU levels - because she wants to maintain the common rulebook and ‘frictionless’ trade.

So whilst it is true to say that the unelected EU has imposed a tax that we haven’t voted for, in practice the EU minimum level hasn’t impacted us since 1991 and it’s a necessary evil for trade to move freely across borders. If it wasn’t there, it almost certainly would be replaced by import and export duties. It’s not low-hanging fruit.

Lastly, whilst we didn’t vote on VAT I believe we do have a veto on any changes in EU generated taxation.

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I’m on my lunch, so I’ll need to keep things brief.

Fair points about our historical rates of VAT. Not so fair on others.

The 5% fuel tax isn’t necessarily ring-fenced for UK spending. If we’re using any of those revenues for our EU contributions, then they’re getting something from their money. Also, the cartelisation of prices means that these few suppliers of energy (and in water’s case, we’re talking virtual monopolies) means that you’re paying 5% on whatever these firms are asking.

The whole point on VAT is that its regressive, and only levied on EU citizens. Perhaps the rate could be lowered if:-

a) Everybody paid it, like everyone pays sales tax in the US, even non-US people. We’ve got a system whereby tourists can swerve the 20% completely. There is no reciprocal refund system in the US.
b) We pulled in money from elsewhere, such as higher earners or corporations.

VAT madness in this country really isn’t the EU’s fault. It’s a complete mess, mainly because it’s been widely abused to give the simple minded and greedy tax breaks, whilst shifting the cost onto the poor(i include at least 90% of those that consider themselves middle class in this).
We get VAT on many food items(oranges no, orange juice, yes) and that’s down to British law.

One thing you’re both wrong on is fuel.
That’s going to become more and more of a luxury, so i would only count heating(enough to stay alive) as an essential.

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@pap / @WorzelScummage, I’m going to move your beef to, well, the beef thread. Please feel free to have at it there.

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A post was merged into an existing topic: The Beef Thread (in honour of Barry)

Also, a little pointer for anyone who isn’t interested in following beefs, you can simply set the tracking preferences…

…to be Muted…

This means that you will see no notifications for the topic and it will not appear in your latest posts feed.

#howto

Can you just do the same thing with Pap?

Sort of.

You can silence notifications from a user, but not (currently) hide their posts.

I’ll dig out some details.

I suspect your tongue might have been in your cheek, but for completeness.

IF you mute a user, you will receive no notifications from them, or about their activity at all.

You will be able to still see their posts - although if this is really an issue to people I can try something experimental.

They can also carry on writing about you and mentioning you with the @ symbol, you are just no longer informed.

So, to mute a user, go to your Preferences and then to Notifications and add the user’s user name to the list of muted users.

Here’s a screen shot of the users I ignore…

#howto

No-deal Brexit poses serious risk to public safety, say police leaders

Haven’t they done this one already?

This is the sort of thing that worries me. The Brexiters go on about nothing to fear from a no-deal exit but I’m generally happier to trust people who know a bit about what they’re talking about and have the data to hand. Ignoring these warnings seems to be the equivalent of putting your fingers in your ears and going ‘la la la, I can’t hear you’.

When you see that graph, it makes you wonder why Vadakar is being so difficult. No border, can’t fly over Irish airspace etc etc.

I’m in agreement.

Where I think we differ are results. I listened to the likes of Tony Benn, Barbara Castle, Peter Shore, Ted Heath, Jeremy Thorpe and Roy Jenkins.

The benefit of listening to their projections was that over forty years, you can see which of them actually came true.

Those seeking to end our involvement with the then EEC were proven to be right.

That graph is almost mostly accurate. A couple of things though. GDP isn’t a great measure of an economy because it’s not really a measure of production. It’s actually a measure of the value derived from what is termed production. That’s a different thing. It’s more along the lines of how much cash is being made.

Private healthcare? GDP. Sudden death in the family, leading to loads of transport costs, funeral costs. GDP. Road traffic accidents. GDP. Ambulance chasing solicitors. GDP. Wonga. GDP.

Fair enough, that gets factored in with a load of stuff that we do like doing, or making, but a better measure of how well we’re doing is how much we export. Unlike GDP as it stands, there is a direct tie to some kind of production if we’re shipping something out.

There are plenty of small countries that are excellent exporters; Ireland is one example. Switzerland, famously not in the EU, might be the world champ. It has one of the highest rates of employment in the world, and one of the lower income inequality metrics. The Swiss benefit from a few world-spanning corporations and a lot of high end exports which they’ve developed a reputation for doing it well.

The Economist piece your graph comes from misses the point. It is predicated on acrimony that will stop nations trading with us after a no-deal Brexit. Is that likely? Really?

Take a look at the Audis and Bimmers on your roads. German motors constitute about 30% of our private owned fleet. The Germans exported 22.7Bn Euro’s worth of cars into the UK in 2017. Do you really think their car companies are going to abandon that market? At a time when it really can’t afford to lose any more business after the VW diesel scandal?

German politicians will get lobbied to fuck by business folk that clearly care more about the bottom line than the EU’s rules, and we’ll end up trading nice with the Germans. Once we’re trading with them nice, every other EU country is going to ask “Why can’t we?”

I agree that Ireland is fucked though. Not really a great opening centenary for them, is it? Called the Second World War an emergency and persecuted anyone that volunteered (hundreds of thousands) on their return from war. Spent the next 40 years allowing themselves to be run by the Vatican, leading to some of the most vile peacetime deaths I’ve ever heard about. Under control of an unelected foreign power with plenty of time to spare for their centenary of sovereignty, soon unable to trade with their near and affluent neighbour.

Something in here for everyone to agree with, whilst also supplying something for everyone to disagree with :wink:

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Blimey…

…O’Reilly.

Really powerful article. Full of dramatic predictions that can’t come true. Can they?

As George Monbiot put it: “ When corporations free themselves from trade unions, they curtail the freedoms of their workers. When the very rich free themselves from tax, other people suffer through failing public services. When financiers are free to design exotic financial instruments, the rest of us pay for the crises they cause .”

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But isn’t this the new normal?

Are you telling me that it is going to get worse? (Rhetorical question)

And the sheeple allowed themselves to be suckered and walk right into it.

Yeah, but to be fair the article starts the laying of blame all the way back with Thatcher.

It’s been a low, long crawl to oblivion culminating in a vote to leave the EU. If the article is to be believed.

And didn’t it start with her selling off the council housing to the tenants for peanuts, crushing the unions and flogging off the utilities?

It seemed to go downhill from there - but everyone was going to be a millionaire weren’t they, so who needed the unions for instance and who ultimately owned all the shares in BT and British Gas once the proles sold off their shares after making one-off small returns on selling them?

Biggest con trick by the Conservatives ever.

Shameful.

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