AN OUTSIDE VIEW

The economic case for Brexit was never put, because of the incompetence of Minford and his associates. Short of full-blown communism, it would be difficult to devise a worse set of policies than those at the heart of the EUʼs trade and economic policies: CAP, VAT, the tariff wall and the Euro. The so-called four freedoms are in reality a way to ensure that skinflint employers and greedy landlords can pay the lowest wages and charge the highest rents. Employment Rights are a fig leaf and do nothing for those on the edge of the labour market. However, CAP and the tariff wall are a useful source of pocket money for the dukes and lords whose rental income would have been hit. Since the same people are the leading Tory grandees, they were bound to insist on it being replaced by a home grown version of the same thing, which is what has happened. On top of that there is a clueless Chancellor who is taken in by surfaces appearances and does not appreciate how much of the headline yield from ...

I am coming to the conclusion that Brexit is becoming an irrelevancy. After the announcement by Gove - a leading Brexiter - of new UK food tariffs to replace the EUʼs, I am coming to the conclusion that Brexit is becoming an irrelevancy. What is the point of it? The EU has been running four egregious trade and economic policies from its outset: CAP, VAT, the tariff barrier and the Euro (fortunately the UK avoided the latter, but the fact that it even exists is proof of the incompetence of those responsible for the those policies). It is becoming evident that the leading supporters of Brexit are intent on replacing the EU policies with home-grown versions of the same thing. It is as if a prisoner is told he is free, but remains in his cell, and is then required to pay for his food and lodging in the jail. Such a Brexit is all pain and no gain. The ERG - this includes J Rees Mogg - and Economists for Brexit, should have raised their voices in protest when Gove announc...

Uplands farming seems to be most at risk from Brexit. The land will not, of course disappear. The uplands, and, indeed, the landscape as a whole, should be regarded as a national resource which needs to be managed for a variety of objectives. to maintain, and preferably increase, opportunities to earn livelihoods;  to enhance its aesthetic value;  to enhance its biological diversity so as to support native species;  to protect downstream areas from flooding; to make a contribution to the carbon sink;  sustainability.  This needs to be done is such a way as to ensure that the enhanced rental values resulting from public investment are efficiently recovered for the exchequer. Although the sums of money involved are relatively small, this strengthens the case for land value taxation on agricultural land. However, it should not be forgotten that present taxation gives rise to an artificial margin where land which could support economic activity in the absen...

Will Brexit destroy British farming if it is not protected? Remainers say it. The National FU says it‒but then it would, wouldn’t it? The leading Brexit economist, Minford, has said it. What is the truth of the matter? Agricultural rents are in the range £50 to £200 per hectare. Faced with a general fall in farm gate prices, the worst land, by definition marginal land, goes out of agricultural use and rents of all other land must fall. The cut-off point comes where rental values drop to zero. This is standard Ricardian theory. Some agricultural land will obviously go out of its present use, but the questions are how much, and what other uses will replace them? I have not seen any analysis of the problem, neither by Brexiters or Remainers. In the absence of any sound analysis, all there is on both sides is blind speculation. The apparent dearth of well-publicised and solid information is a mystery. The calculations are not the kind of thing that can be done on the back of ...

The bad news is that Gove has announced that food tariffs will continue after Brexit. This should not come as a surprise since the National FU has always made sure it has the ear of British politicians. It shows that the battle for sound economic policies is only just beginning. Getting out of the EU was only ever a first stage, since the vested interests still remain to be faced down and put in their place. There are potential benefits from Brexit because the core EU trade and economic policies are fundamentally unsound. But if the UK government is just going to perpetuate all the same rotten EU policies then the country suffers all the disruption of Brexit but gains nothing. If the public do not get to see the benefits there will be hell to pay. As for farming, New Zealand showed the way in the 1980s. There was initial disruption but the industry adapted and is, if anything more successful as a consequence. The difficulty with achieving change in the UK is that the country ha...

Now corrected (perhaps), thanks to Dinero who spotted an error in the original source for overall electricity consumption. Overall annual electricity consumption in the EU is 3 million Gigawatt hours ie 3E6 x 1E9, a total of 3E15 watt hours. Source (the decimal point has been omitted from the graph, hence the earlier mistake) According to this blog, 19TWh would be saved by the maximum power regulation for vacuum cleaners ie 1.9E13 watt hours. I make that saving about 0.7% of the total EU electricity consumption, but it is easy to go wrong with teras and gigas. However, this came to me from Mark Wadsworth, which suggests that the figure is in the right ball park. ʻWe use a fair bit of electricity, about 400 kWh a month, my online thingy tells me. Let us assume we spend half an hour a week vacuuming. Our vacuum cleaner is 2,200 watts.  ʻ Half an hour per week = 1.1 kWh, times 4 and a third = 4.7 kWh per month  = about 1% of our usage.  ʻ Let us assume that the...

People are more emotional than logical and the process of paying LVT would feel different to some of the other taxes it would replace. People would notice the payment more and object.   Perhaps, but one of the issues with other taxes is that the INCIDENCE of the tax is not necessarily the person nominally responsible for payment, as taxes are passed along. The incidence of PAYE Income Tax and NI is on the employer and forms part of labour costs. It is functionally equivalent to a payroll tax. This means that employers are under pressure to reduce labour costs by replacing workers with capital even though it results in a worse service, or no service at all, and is, in reality, uneconomic. Supermarket self-service checkouts are an example. Alternatively, the employee taxes are passed on in higher prices. It does not stop there, because these taxes cut into employers' profits, resulting in less being collected in other taxes including property taxes (UBR) and Corporati...

‘I am not sure that Mr Tusk is the greatest theologian the world has ever produced, and is a little bit confused about the difference between heaven and hell’, was Rees-Mogg’s response to Tusk’s comments on the place in hell for Brexit politicians. Nicely put.

If it ever came to pass, you could expect lorry queues on the A1 all the way back to Newcastle and on the M6 to well south of Carlisle. But, as one bright spark asked, ‘are Rotterdam, Hamburg, Antwerp (Europe’s biggest ports) really far away? They’re just across the North Sea.’ Harwich to Hook of Holland is 8 hours sailing time. That is the longest practicable distance whilst avoiding having to spend a night on the ship, though ships on this route have sleeping accommodation. Harwich to Esbjerg is 18 hours which leaves 6 hours to service the ship for the return voyage ie a round trip can be made within 48 hours. Now look at the sailing times from Leith Rotterdam 28 hours  Hamburg 37 hours  Antwerp 32 hours  Leith to Esbjerg (the shortest route) 30 hours, but Esbjerg is out on a limb.  Whatever the route, then, it is more than ‘just across’. It adds to transport costs and pretty much rules out RoRo. Scotland could barely generate the traffic for a conta...

Polly Toynbee has reached new heights in this piece , with makes the Ten Plagues of Egypt seem like a Sunday School party compared to Brexit. Or is she parodying herself?