EU referendum aftermath

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Alex Holowczak
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Re: EU referendum aftermath

Post by Alex Holowczak » Fri Jul 15, 2016 10:46 am

Alistair Campbell wrote:You are saying EMW said it should be inflation adjusted (rather than compounded by MLR or equivalent).
I confess to not really knowing the difference between inflation and MLR. I was just trying to explain that the £2 trillion came from the £400k in 1707 money.
Michael Farthing wrote:While Alex's summary above is substantially accurate it has (from my perspective) a very distinctive slant! It omits that the project was actively obstructed by England, which passed legislation effectively making it illegal for English people to invest in the project. The suggestion that Scotland decided on union is also a strange way of expressing matters. More the case that England used the mess to force union on a rather unwilling Scotland, which was effectivelty bribed with the offer of a bail out.

Now I have no desire for pistols at dawn with Alex over these differing interpretations (far from it- I have great respect for him) but it is interesting to see how even an event of 200 years age can produce such differing views.
The project was not supported by many other imperial powers due to protecting their own interests. They didn't want to irritate the Spanish, for one thing. I would argue that it was doomed to failure even before the Scottish set sail due to a lack of international support, and the Scottish can't really blame anyone else for nevertheless going ahead with it.

But greater historians than I can argue about this. Anyway, it was much nearer 300 years ago than 200. :wink:

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Michael Farthing
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Re: EU referendum aftermath

Post by Michael Farthing » Fri Jul 15, 2016 1:10 pm

Ahhh! Showing my age there!
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NickFaulks
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Re: EU referendum aftermath

Post by NickFaulks » Fri Jul 15, 2016 9:41 pm

Seems there's an army coup in Turkey. Obviously caused by Brexit.

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Christopher Kreuzer
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Re: EU referendum aftermath

Post by Christopher Kreuzer » Fri Jul 15, 2016 11:06 pm

NickFaulks wrote:Seems there's an army coup in Turkey. Obviously caused by Brexit.
Do you remember what I said a month and a half ago here?
Christopher Kreuzer wrote:If Turkey starts to buckle under the strain it is under from the wars on its borders (arguably it already is showing the strain), do you close the door completely (not really possible as they are a member of NATO) or do you increase the support to prevent things getting worse? I think withdrawing from any supranational body in the current geopolitical climate is a backward step. Countries both individually and together need to step up and stand firm and work to resolve problems, rather than backing away from them.
I hadn't envisaged a military coup (attempted or otherwise) in Turkey, but it doesn't surprise me. The news headlines this week have been outdoing themselves one after the other in a ghastly progression, with Brexit-related headlines surpassed by the atrocity in Nice, and now a coup in Turkey that looks like it is working. The President (Erdogan) is trying to rally people to take to the streets in a social media-themed fashion (using Skype "via FaceTime on a iPhone while Twitter notifications pop up on screen").

Thankfully it looks to be relatively orderly at the moment (with the military seemingly having planned this and in control). Though when the Russians are calling for calm, you know things are serious.

Could Turkey ever implode into a civil war like that in Syria (with refugees fleeing into Europe and other neighbouring regions)? Unlikely, I would have thought, but this does seem to be a time when all the old certainties are melting away, crumbling under the tide of history.

NickFaulks
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Re: EU referendum aftermath

Post by NickFaulks » Fri Jul 15, 2016 11:35 pm

The plotters waited just until financial markets were closing for the weekend. I think that confirms US involvement.

Alistair Campbell
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Re: EU referendum aftermath

Post by Alistair Campbell » Sat Jul 16, 2016 2:58 pm

NickFaulks wrote:The plotters waited just until financial markets were closing for the weekend. I think that confirms US involvement.
Or maybe Friday night is a good time to start a coup d'état? (Or not, as may be)

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Re: EU referendum aftermath

Post by Alistair Campbell » Sat Jul 16, 2016 3:11 pm

MartinCarpenter wrote:Really don't think it was a fully serious suggestion. Especially not the 4 trillion bit :)
Well, possibly, but the same argument has been made before (although previously it seemed to have been conflated with income from the Crown Estates or somesuch).

Over the last few years many of us will have seen a lot of misinformation, a lot of opinion presented as fact and all sort of specious nonsense peddled in the name of debate. Perhaps it is an idea to challenge such arguments lest they be accepted as the truth (unless that is the case, of course).

Invoking the Acts of Union to cite some course of action as being illegal has been popular – I think “King” John MacCormick and Ian Hamilton challenged the regnal number of Her Majesty on such a basis (discussed elsewhere on here). They have been used in an attempt to justify "equality of nationhood" between England and Scotland. I’m not sure what that means, on what grounds the assertion is made or where Wales and Northern Ireland fit in. (The corollary that we might be responsible for half the national debt is not a line of reasoning that is often advanced.) There is an ongoing case at the Court of Session in Edinburgh regarding a campsite outside Holyrood where the Act of Union has been quoted. (As a further aside, another line of argument involves an affidavit from someone claiming to be Christ the Second, King of Scotland, which, amongst other things, accused the judiciary of capital crimes and suggested they should be executed. The presiding Lord Turnbull seemed commendably relaxed about this intervention. In an interesting and canonically unforeseen turn of events, apparently Christ Himself turned up at the court (although He was believed to be using the name John A Hill at the time) but was not invited to give evidence).

We're getting a little off-topic here (which doesn't bother me as I often find such historical diversions interesting). I was aware of the basics of the Darien expedition and supposed historical consequences - I had never heard the expression "Darien Money" before, though.

E Michael White
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Re: EU referendum aftermath

Post by E Michael White » Sun Jul 17, 2016 12:09 am

Hello Alistair, been meaning to reply to your posts on this topic. Bear in mind most of what I write is largely derived from the internet and history books and therefore comes with that caveat. The first politician in recent times to mention the Darien project was probably Danny Alexander about 5 years ago.
Alistair Campbell wrote:Most discussion of which I am aware suggests that there would have been a split of assets and liabilities on some basis to be negotiated - in particular the national debt would have been allocated on a per capita basis (as some of the £400k was intended as compensation for liability to future debt).
There is no doubt that Scotland brought to the UK assets, future undiscovered assets (oil) and debts such as the Darien Money. These would be large amounts to consider in any agreed basis for separation. I doubt whether the position on future independence was considered or documented when the union was discussed in 1707 or in the abortive attempts in 1702, as they were more concerned with the union of states. Usually the best way to sort out a mixup is to start with the largest items. The Royal Bank of Scotland however have an accurate archive of documents concerning the Darien and who lost what. Although you cant now see the archive it is mentioned here:-

http://caledonianmercury.com/2011/07/01 ... er/0021842

The Darien money is often referred to as "The Equivalent" and looking up that term will find a few more references. The Darien money seems to have been aggregated into the National debt of Scotland and the UK at the time without specific funding or issuance of debt instruments; something similar to pubic sector pension liabilities.

Regarding my £2tr estimate I looked up the historic MLR figures from the BoE here:-

http://www.bankofengland.co.uk/statisti ... serate.pdf

You need to page down to find the rates from 1700 onward. I also looked at the chart tab in this link:-

https://docs.google.com/spreadsheets/d/ ... li=1#gid=1

I then guessed 5% as the average rate since 1700. I took 1700 rather than 1707 as the debt would have been bubbling since that time. 1.05^316 x 400,000 is approximately 1.986 x 10^12. which I must admit I rounded to the nearest £tr. What this figure represents is the amount that the debt would have accrued to if no interest were paid and the debt left unfunded as informal National Debt.

You rightly question is 5% correct under the circumstances. Well no its probably too low ! MLR is the lowest rate of interest that the BoE charges as a lender of last resort to balance, among others transactions between trusted internal institutions of the UK. Where there are risks involved or sovereign loans external to the UK higher rates would be charged. There aren't many examples recently but one is the loan to Ireland in 2010. This loan for £3.26 Bn was initially charged at 5.8% and then reduced to 3.5%. ie a margin over .5 % of 5.3% and 3.0 %. In 1707 Scotland was not quite a bankrupt nation but a formal rate would have been higher than 5%.

The crown estates are sometimes mentioned as relevant as the whole shoreline of Scotland was ceded to the English Crown at about that time but according to some sources independently of the Union. This might have relevance as the nearest land to what we know as Scottish north sea oil would be the Scottish shoreline which belongs to the English Crown. a debate will be had over whether the crown estates are separate from the UK and whether they are part of ENG or SCO. Another factor relating to north sea oil is that the UN boundaries were drawn up assuming the union continued and moves along a line of latitude at some points whereas maritime law specifies boundaries by reference to perpendiculars from land. This interpretation would move the boundaries further north into what is sometimes thought of as the Scottish sector.

I don't propose to get too much involved in this debate and I'm glad I'm not involved in the real debate when it starts !

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Christopher Kreuzer
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Re: EU referendum aftermath

Post by Christopher Kreuzer » Sun Jul 17, 2016 7:42 pm

A bit unfair to put political unrest outside the EU in this thread, but I got a travel advisory alert from the UK government (having signed up to that before going to Armenia in May), telling me that:

"Due to the ongoing situation at Erebuni Police station (in the south of Yerevan) we advise you to avoid the immediate vicinity. Please follow the advice of the local authorities and closely monitor Travel Advice."

So I went and looked up the news:

http://www.rferl.org/content/armenia-op ... 63123.html

"One Dead As Armed Men Storm Yerevan Police Station, Take Hostages"

Bit startling, as I was in Yerevan only a couple of months ago. :shock:

Off the radar on most news feeds, but still worrying that things in that part of the world might be particularly unstable at the moment. I hope things will be OK over in neighbouring Azerbaijan where the FIDE Olympiad is taking place in a month-and-a-half's time (September 2016).

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Christopher Kreuzer
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Re: EU referendum aftermath

Post by Christopher Kreuzer » Sun Jul 17, 2016 7:49 pm

And going back to the Scottish question:

http://www.bbc.co.uk/news/uk-scotland-s ... s-36819182

How exactly does it make sense for the UK to negotiate trade deals when Scotland might then vote to leave the UK. Would that not require the trade deals to be renegotiated? How analogous is the situation to trade deals being done with the EU prior to Brexit? Would such deals be off because the UK is leaving the EU? What proportion of the EU is the UK, compared to the size of Scotland's economy compared to the UK?

Alistair Campbell
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Re: EU referendum aftermath

Post by Alistair Campbell » Sun Jul 17, 2016 8:34 pm

Michael – thank you for your interesting comments.

Originally I had three what might be termed “quibbles”.

1. That I could see no provision in the Treaty of Union for what would happen should it be unwound – there was no “prenup” if you like.
2. In particularly there was no prescribed method for calculating the repayment terms of any debt
3. That £398,085.50 was the correct amount of any debt

I think you have confirmed that you are putting forward suggestions re points 1 and 2. On 2, I accept that a risk premium might theoretically be involved; I note that the wonders of compound interest mean that rounding up and adding another 7 years compounding can add a significant amount to any figure calculated.

On the 3rd point, I think my contention is that some of the £400k “Equivalent” was used to address other issues, with only the balance being compensation for taking on a share of the National Debt.

This leads to the question of how to calculate what that share would be (which was a more pressing issue a couple of years ago).

I liken this to the “restaurant bill” problem – 10 people go out for a meal, one has to leave early to catch his train – how much does he pay?

The easy approach is to divide the current bill by 10.

Another is to argue over who had what – who had the steak, who had a suite and a starter, who had an extra beer. Doable, but more complicated, especially if the starters were ordered in the 18th century and someone bought a round in 1922…

The latter method is akin to an Insurance company’s asset share approach – but attempts to attribute share of the debt in this way would be fiendishly complicated (and possibly at odds with the notion of a union).

The Government attempts to do this currently by producing annual “GERS” figures – Government Expenditure and Revenue Scotland – where different methodologies are used to allocate income and expenditure dependent on the type of tax or spend.

As regards the Crown Estates – transfer of income from the notionally Scottish assets (I assume that these are those geographically based) to Holyrood was a proposal of the Smith Commission and is to be enacted under the Scotland Act 2016.

Oil and Gas revenues are slightly more problematic. From what you say about borders I infer you are comparing a sea border that is largely eastward along the line of latitude from just north of Berwick with one that is equidistant from Scottish and English land (which would veer approximately NE instead). Such a change was made in the in the Scottish Adjacent Boundaries Order 1999 (SI 1999 No 1126) but this was purely with regard to fishing issues as oil extraction is a matter reserved to Westminster. Nevertheless, GERS makes several alternative allocations of oil and gas revenues, one of which is on a per capita basis, another on a geographical basis which I believe uses the new “fishery” style boundaries. (As an aside, this has led to accusations of the English stealing our waters. Tony Blair cops a lot of the blame (as do the House of Lords, although I don’t think they were involved)).

I felt it ludicrous at the time that we had no idea of what the “divorce settlement” would look like; I think people assumed it would be broadly fair. Whilst HMT stated that rUK would continue to accept liability for UK Government debt, I assume that there would have led to a quid pro quo, when Scotland’s share would be deducted from any asset split. As said previously, the basis for calculation was assumed to be on a per capita share. There is also evidence to suggest that iScotland would be responsible for paying and funding state pensions so presumably this would be in the mix somewhere as well.

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Re: EU referendum aftermath

Post by Alistair Campbell » Sun Jul 17, 2016 9:19 pm

Christopher Kreuzer wrote: How exactly does it make sense

Let me stop you right there. I fear you may be in the wrong place (country/continent/planet) for that sort of thing.
Christopher Kreuzer wrote: What proportion of the EU is the UK, compared to the size of Scotland's economy compared to the UK?
Ballpark figures, but I think the UK was about 18% of the EU economy (possible less with the slumping £). Scotland’s GDP is about 8% of the UK’s. About 18% of Scotland’s exports are to the EU and about 64% to rUK.

Regarding trade deals, one might assume that they would have been written in such a way to remain valid after changes to the constitution of the EU (or the UK) but in common with almost just about everyone else in the country I have no experience of the matter.

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Christopher Kreuzer
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Re: EU referendum aftermath

Post by Christopher Kreuzer » Sun Jul 17, 2016 9:49 pm

Alistair Campbell wrote:
Christopher Kreuzer wrote: How exactly does it make sense

Let me stop you right there. I fear you may be in the wrong place (country/continent/planet) for that sort of thing.
Heh. Thanks for the % figures.

Brexit 'will be horrible for UK economy' - fund manager

NickFaulks
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Re: EU referendum aftermath

Post by NickFaulks » Sun Jul 17, 2016 9:57 pm

He seems to be saying that his funds will continue to do badly but it will be Brexit's fault not his. There's a lot of that about.

http://www.ukmoneysite.com/blog/old-mut ... 0wodWhEO4g

Mick Norris
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Re: EU referendum aftermath

Post by Mick Norris » Mon Jul 18, 2016 10:02 am

MartinCarpenter wrote:
Mick Norris wrote:
MartinCarpenter wrote:Doubt the party is rich enough for starters :)
Legal action underway
Labour deputy leader Tom Watson called the legal challenge "very unhelpful".
An under statement I think. Does that mean the whole thing is delayed several months more? It will also, of course, look so good if the challenge wins.

What a sorry mess.
I gather that Jeremy is now taking legal action against the Labour Party to overturn the £25 registration and 48 hour window that opens today at 5 pm I think :roll:

On another tack, amazing how strong the criticism of him is Problems

I thought the Tories were the nasty party
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