4 ms·

To compete after Brexit the UK needed to break with the status quo and that most likely meant, as many Brexiteers suggested, going for low tax low regs. Indeed,

To compete after Brexit the UK needed to break with the status quo and that most likely meant, as many Brexiteers suggested, going for low tax low regs. Indeed, if the level of taxes and regulations in the UK is the same as in the EU then why setup a business in the UK rather than in the EU? We see that the current government is unwilling to go down that path, although Covid did throw a major spanner in the works of public finance, so the country is almost guaranteed a slow (or not so slow) decline. This is not about whether I think Brexit is good or bad, but it did happen and that changes what the country can and should do in order to prosper under those new conditions.

rwmj 4y ago
Any attempt to do that would be political suicide, as indeed Liz Truss recently demonstrated.
- mytailorisrich 4y ago
  Liz Truss made big mistakes in implementation: they did not discuss their plans with key stakeholders and they they did not prioritise measures (why abolish the 45p rate now?) but they did get that growth must be much higher priority, if not highest priority. Again, the level of debts is really weighing on things: without Covid debts Liz Truss's budget would have been well received. And of course even many in her own party were out to kill her, which did not help.
  - gghhzzgghhzz 4y ago
    Debt being an issue is mostly a self imposed limitation / political tactic. Parties were saying exactly the same thing about debt in 2010 when debt / GDP ratio was lower in order to win an election and implement austerity. Covid Debt in the UK was all QE anyway, so is effectively money we owe to ourselves. I do agree that Truss could have done all the things she wanted to do if she had just been smarter about presentation.
    - mytailorisrich 4y ago
      Government spent massively during Covid through borrowing, that's not QE. Edit: Level of QE does not imply that the government did not take on massive debts as well. It's not one or the other.
      - gghhzzgghhzz 4y ago
        There's graph. QE went from 445bn before Covid to 895bn at end of 2020 https://www.bankofengland.co.uk/monetary-policy/quantitative-easing https://www.bankofengland.co.uk/monetary-policy/quantitative... EDIT: also https://neweconomics.org/2021/10/99-5-of-government-covid-debt-has-been-matched-by-so-called-bank-of-england-money-printing https://neweconomics.org/2021/10/99-5-of-government-covid-de...
- mnd999 4y ago
  Suicide is less of an issue if you’re already dead though.
- pessimizer 4y ago
  I think they put her out there to die, and that she knew it. When 80% of what she did gets redone by Sunak, it will be marketed as relatively humane and egalitarian. It's like how everybody got to attack May as incompetent for the Brexit she proposed, which was obviously the only Brexit possible (i.e. as far as the EU was ever going to go.) They push her out, sneering, then go on to do exactly the same deal they pushed her out for. The UK public just needs scapegoats, and the UK political class serves them on a platter.
de_keyboard 4y ago
> going for low tax low regs. The problem with this strategy is that the major trading blocks of USA, EU and China will not allow the UK to undercut them. So if the UK goes down this path, then companies based there will find themselves cut off. The UK domestic market is not large enough on its own.
- mytailorisrich 4y ago
  Considering that the US is much lower regs than the UK and has domestic tax havens, and that I doubt this is a problem for China, I think you exaggerate. It's the EU that is worried of being undercut and that's why they are trying to tie market access to EU rules.
  - de_keyboard 4y ago
    The US would not allow their financial sector to migrate from NY to London. China is even more controlling than the US. London used to be the center of finance in Europe and now the EU sees an opportunity to grab that revenue / power. Where does this leave London? And the UK as a whole is heavily dependent on London.
    - mytailorisrich 4y ago
      The UK is a major global financial centre and globally competitive. What it has lost, which is not that much, is due to EU regulations which mandate that some activities have to be in the EU. China is not relevant. You're not making a convincing point, IMHO.
      - guitarbill 4y ago
        Is the UK really "a major global financial centre", or is it just London?
    - blibble 4y ago
      > London used to be the center of finance in Europe I think you'll find it still is, by quite a long way > now the EU sees an opportunity to grab that revenue / power. the EU hasn't even managed to pry Euro clearing out of London (despite trying extremely hard)

rwmj 4y ago

Any attempt to do that would be political suicide, as indeed Liz Truss recently demonstrated.

mytailorisrich 4y ago
Liz Truss made big mistakes in implementation: they did not discuss their plans with key stakeholders and they they did not prioritise measures (why abolish the 45p rate now?) but they did get that growth must be much higher priority, if not highest priority. Again, the level of debts is really weighing on things: without Covid debts Liz Truss's budget would have been well received. And of course even many in her own party were out to kill her, which did not help.
- gghhzzgghhzz 4y ago
  Debt being an issue is mostly a self imposed limitation / political tactic. Parties were saying exactly the same thing about debt in 2010 when debt / GDP ratio was lower in order to win an election and implement austerity. Covid Debt in the UK was all QE anyway, so is effectively money we owe to ourselves. I do agree that Truss could have done all the things she wanted to do if she had just been smarter about presentation.
  - mytailorisrich 4y ago
    Government spent massively during Covid through borrowing, that's not QE. Edit: Level of QE does not imply that the government did not take on massive debts as well. It's not one or the other.
    - gghhzzgghhzz 4y ago
      There's graph. QE went from 445bn before Covid to 895bn at end of 2020 https://www.bankofengland.co.uk/monetary-policy/quantitative-easing https://www.bankofengland.co.uk/monetary-policy/quantitative... EDIT: also https://neweconomics.org/2021/10/99-5-of-government-covid-debt-has-been-matched-by-so-called-bank-of-england-money-printing https://neweconomics.org/2021/10/99-5-of-government-covid-de...
mnd999 4y ago
Suicide is less of an issue if you’re already dead though.
pessimizer 4y ago
I think they put her out there to die, and that she knew it. When 80% of what she did gets redone by Sunak, it will be marketed as relatively humane and egalitarian. It's like how everybody got to attack May as incompetent for the Brexit she proposed, which was obviously the only Brexit possible (i.e. as far as the EU was ever going to go.) They push her out, sneering, then go on to do exactly the same deal they pushed her out for. The UK public just needs scapegoats, and the UK political class serves them on a platter.

de_keyboard 4y ago

> going for low tax low regs. The problem with this strategy is that the major trading blocks of USA, EU and China will not allow the UK to undercut them. So if the UK goes down this path, then companies based there will find themselves cut off. The UK domestic market is not large enough on its own.

mytailorisrich 4y ago
Considering that the US is much lower regs than the UK and has domestic tax havens, and that I doubt this is a problem for China, I think you exaggerate. It's the EU that is worried of being undercut and that's why they are trying to tie market access to EU rules.
- de_keyboard 4y ago
  The US would not allow their financial sector to migrate from NY to London. China is even more controlling than the US. London used to be the center of finance in Europe and now the EU sees an opportunity to grab that revenue / power. Where does this leave London? And the UK as a whole is heavily dependent on London.
  - mytailorisrich 4y ago
    The UK is a major global financial centre and globally competitive. What it has lost, which is not that much, is due to EU regulations which mandate that some activities have to be in the EU. China is not relevant. You're not making a convincing point, IMHO.
    - guitarbill 4y ago
      Is the UK really "a major global financial centre", or is it just London?
  - blibble 4y ago
    > London used to be the center of finance in Europe I think you'll find it still is, by quite a long way > now the EU sees an opportunity to grab that revenue / power. the EU hasn't even managed to pry Euro clearing out of London (despite trying extremely hard)