My first though on UK's retreat from EU

Another English Civil War game ends
But The Division Bell will ring for years.

A small universe has been disturbed
On this Black Friday, one half nation bewildered
 —— that is putting it lightly.

Retreating from Dunkirk, we now board the Titanic
Anxious how the obstacles ahead will cause the next panic.



KSN
2016

The European immigrants who pioneered early British Electronics Industry, and why I will vote in the EU Referendum

 
I am an inventor and electronics engineer. I want to pinpoint my reasons to vote in UK's EU referendum. The way various arguments have been posed and passionately debated have given me a sense of what it must have been like during the Cavalier - Roundhead English Civil War when the country fought over the “manner” of its governance.

First, let me digress into learning more about the history of electronics industry in Britain.

In the early decades of 20th Century, the leading figures of British electronics were:

• Gustav Binswanger (born German-Jew) and Hugo Hirst/Hirsch (born in Germany) founded GEC as a business venture into manufacturing after their experience of importing steam generation and electrical equipment.
• Michael Sobell (born Polish/Ukranian Jew) founded Radio Allied Industries, Britain's largest manufacturer of television sets, which then merged with GEC in 1960s.
• Arnold Weinstock (son of Polish Jew immigrant) Educated as an economist. From the 1960s he led GEC's aggressive expansion and amalgamation of major British tech companies, which eventually became a global giant with 1/4 million employee. GEC has since shrank and then became part of BAe systems.
• William Oscar Heyne (born in Germany) was the key inventor engineer around whom Plessey was founded.
• Sebastian Ziani de Ferranti (born in Liverpool, son of Italian composer), founded Ferranti.
• Guglielmo Marconi (son of Italian and Irish/Scot nobility) founded Marconi.
• Stanley Mullard was English, founded Mullard. The company was sold to the Dutch company Philips in 1927.
• Teddy Rosen (born in London, son of Polish Jew) founded Ultra Electric.
• Jules Thorn (Austrian Jew) founder of Thorn Electrical Industries.

Thanks to immigrant entrepreneurs, UK had a pre-semiconductor electronics industry. During WW2, the reliable production of electronic components for radar, sonar, radio sets, telephones, and the newly invented computers, and along with an intelligence command structure that was far better than the enemy's, was in my opinion, the most significant yet undercelebrated reason behind the heroes at the front line that enabled Britain perform better than expectations in the defence these islands.

The Aliens Act 1905 was the first time the government gave officers instructions to stop entry of specific immigrants. [nationalarchives]

A charming anecdote from the era is the incident of a young Guglielmo Marconi who, unable to find investors in Italy, arrived at Dover and then faced the customs officer who found various contraptions in his luggage. Marconi later demonstrated the world's first wireless communication, across the Bristol Channel, and also won a shared Nobel Prize.

The UK electronics industry never made the transition to the age of semiconductor transistor and semiconductor chips. Consequently you can be sure that the very rare few smart products that are made in UK will inevitably contain electronic components and chips all of them made abroad. Most of the chips would come from Asia-Pacific countries, but up to 10% could be from plants in Germany Ireland France or Italy. UK industry do not have any end-to-end capability in mainstream electronics.

 

My perspective on the EU referendum

I design and hack prototypes, jigs, and tools. Very often I would find and want to buy single components and tools that are not sold in this country. When this happens I would cringe when I make an import purchase from outside the EU because, in addition to higher international shipping charges, couriers would run riot with the administration charges (typically £8 to £15). I am also a hi-fi enthusiast who enjoy the superior sound of vinyl records. My most favourite music include Italian soundtracks and German electronica. I absolutely do not want any chance of having to pay duty or customs admin charges when I buy records from Europe.

Let's now consider the more typical imports that normal people normally buy, like computers, smartphones, car parts, grocery etc etc. We cannot ignore the situation that a brexit carries the uncertainties where there may be new inconveniences. Prices at shops will incline upward because all it takes is one supplier in the chain to experience a brexit-related cost (perhaps indirectly, for example a change in rules that affect their bank loan), then it will be passed on eventually to the prices at shops. Also no one can stop brexit rumours, or using it judiciously as excuse to increase prices.

On brexit, distributors will start planning to down-size and cut product range to account for the sentiment towards lowering trade between UK and EU suppliers and customers.


The importance of Trade Agreement:   Conducting modern world trade across two country's jurisdictions are never straight-forward. Terms covering multiple-levels of businesses have to be meticulously defined to minimize trade disputes. Every country have different laws and usually have different areas of specialization where they have economic advantage. When two parties want to seek ways to lower costs so more of their citizens can enjoy the benefits of cross-border trading, they would negotiate a trade agreement that enables businesses to invest and sell across the border with minimal restrictions, tariffs and administration [wiki]


The importance UK's industries in services:   The size of industrial manufacturing in UK has declined to 10% of economy. 80% of UK economy is now in services [guardian]. Not previously familiar, I've found some examples of how services are classed as import and export [revguru] [revguru] [revguru]

(Apparently services account for two third of global output, one third of global employment and 20% global trade. [wto] )

Note that the first agreement covering services came into existence only as recently as 1995 [wiki]


About the Free-Trade countries outside EU:   Here are some essential facts about the 3 EFTA countries that have often been mentioned as free-trade partners who are not members of EU.

• Iceland (population of 330k, 27% of its economy is fishing), 
• Norway (pop. 5M, 20% of its economy is in oil & gas, 30% of its stock market is owned by government),  
• Switzerland (pop. 8M, 70% of its agriculture is subsidised - while EU average is 35%).

It seems for each of these countries, there was a very strong case to protect the really dominant feature of their national economy from competition within EU. However for tariff-free trade, they still must allow free movement of people, pay contributions to Brussels' budgets, and also give foreign-aid grants to EU projects that "reduce social and economic disparities". (I don't have figures for what their costs per head are, but I would guess there wont be any free ride.)


About tariff duties:   Without free-trade, EU customers buying UK goods would be hit with duties like in this table matrix [stat.wto]. Goods crossing an EU customs border will be subjected to tariffs of (very roughly) 2.5 to 10% for non foods, and 10 to 21% for food, and dairy 45%.


About EU membership contribution:   UK's contribution to EU budget is about 0.6 or 0.7% of public spending, or about £90 per taxpayer per year. (The £90 figure comes from Osborne's HMRC letter 2012 sent only to high earners.) [bbc] [gov]

One way to think about what this means is to ask if this £90 is worth its value against the inconveniences of delays and costs that would come with new border restrictions and checks when you travel to EU, or the additional post office custom admin charges for handling parcels from EU (typically when you buy goods via Amazon that could be sent from Ireland or another EU country), and whether you are feeling more secured (because within the expanded EU, the East European countries are now friends whose diplomatic positions are now much closer to ours than they had been in the past) or less secured (because you believe the average person living in EU is generally exposed to notably more danger than the average person living in UK).

46% of government income comes from personal income tax and national insurance [publicspendingfacts]


About economic RISKS:   My view of the UK's risk is to look at the insititutions' opinions of UK's credit risk.Currently UK have a credit rating that is very very good, but one shade less than perfect. I believe UK in EU benefits from having free movement of capital with Germany Holland Denmark Sweden who, as individual countries, have the, better and best, prime perfect credit rating. Outside the EU/EEA/EFTA the only countries that have credit ratings better than UK are Australia, Canada, Singapore. [wiki] [tradingeconomics]

My stab-in-the-dark guess at what may happen after the referendum is this:

If UK leaves, then there may be a short term increase in imports of BMW and high value machinery as people bring forward their planned purchases before the possibility of being affected by a new trade barrier that may add 10% duty, combined with the majority speculation that the sterling will go down, therefore increase prices. If UK leaves, then EU should gradually receive a bit more of corporate investments that previously would have prudently been held in, or step-stoned through, London to explore UK-in-EU opportunities.

If UK remains, then house-builders and mortgage providers would no longer have the referendum-related cautious factors that affect decisions on building and funding of more new homes.


About MIGRATION:   In a survey, 17% of people polled replied that they intend to take advantage of the right to free movement. [europarl] This means 85M (= 17% of 500M) is actually the more sensible number to quote as estimate of people who may eventually travel (for study, business or jobseek), and a proportion of them may come to UK.

On learning the latest ONS data of 333k for last year's net migration into UK (that's 0.5% of population of 66M), my immediate thoughts, somehow, took me to look up data for UK's mortality rate (0.9%), and fertility rate (1.9 per woman).

According to CIA data on net migration, EU average is 0.25%, France 0.11%, Germany 0.12%, UK 0.25%, Switzerland 0.47%, Australia 0.56%, Norway 0.7% [cia] (You will notice the CIA's UK figure differs from the ONS' which I believe is because the latter also counts students.)
UK had 34 million visits last year. [dailymail]


About INEQUALITIES IN WAGES:   The disposable income in UK is £12k at the poorest regions, and £16k to £43k at different parts of London. [thisismoney] So within UK, the inequalities in average disposable income, of average workers at different regions are 3.5x.

Internationally the hourly min. wage for: UK is $12, Bulgaria (population 7M) $1.7 (i.e. 7x lower than UK's), Romania (pop. 20M) $2 (i.e. 6x), Hungary (pop. 10M) $2.7, Australia (pop. 24M) $15, Indonesia (pop. 250M) $0.5 (i.e. 30x lower wage than Australia), Papua New Guinea (pop. 7M) $1.3 [wiki]. So the difference in min. wage between UK and the poorest parts of EU is about 6x and 7x. The wage difference between Australia and her nearest neighbour country is 30x, whose population is 10x bigger.

 

I will be voting REMAIN because

1. (and most important to me) ability to continue to buy and sell goods in EU without directly or indirectly having to pay those rip off customs admin charges to the post office!
2. I am happy that some of government responsibilities are moved from Westminster to EU in the interest of uniformity of laws and collective diplomatic decision-making between our neighbours within the free market.
3. IMO, EU regulations are good. They reduce duplication of efforts to meet local compliance issues at other 27 countries. They can give new exporters a head start because the 'average' consumer everywhere take it for granted that EU brands are worth their higher value as their quality conform to EU's comprehensive standards that apply to so many different countries.
4. IMO, it is subterfuge on parliamentary democracy if the will of 151 confirmed pro-exit MPs are given the hand to steer the other 464 MPs who are committed to work within EU [bbc]
5. IMO, the EU membership fee is fair. Per head, it is comparable to the membership fee for joining a trade union. EU does far more, including codifying a whole range of, mostly quite sensible and socially valuable, laws that are isolated from controversial political narratives and motives of the national government of the day.
6. A brexit will add several years of additional haggling, brinkmanship, and squabbles within and between rebel politicians, Westminster, EU's 27 other countries, and Scotland. IMO, that's a massive drain on government's time and resources that are much better spent on normal government duties.
7. A brexit will mean re-programming our business and political leaders. There will be general slowdown of investments for building capacities and assets, if nothing else, simply because of the need to do more due diligence.
8. I can't see any UK-outside-EU scenario able to attract enough investments to make up for the flight of those foreign investments that currently take advantage of UK-in-EU scenario.
9. Anyone losing their job after brexit may REGRET that their situation might not have been so bad had UK voted remain.
10. The current migration boom is consistent with UK's GDP growth. The current government's priority manifesto objective is to grow the economy and navigate the public budget towards a fiscal balance within 4 years, yet generous on tax.
11. If the free movement of working- and middle-class labour in EU is restricted, then our students, graduates, and entrepreneurs will start losing CHOICES in their career and business ambitions.
12. Any restriction to free movement of working- and middle-class labour in EU will not help more of our graduates access oversees career-enhancing experiences. This will impact the amount of unpaid student loans that will have to be met by all future taxpayers.
13. IMO, leaving EU and using a points system can lower the wages of a wider range of skilled workers because agencies will supply plenty of early/mid-career candidates with great experiences from lower wage economies all over the world.
14. EU's free movement of people and common social rights has practically eradicated people trafficking or unscrupulous practices of indentured labour, or worst, of EU citizen.
15. The bremain features of free movement of goods, capital, people, independent currency, the English language and the current economic boom, give UK extraordinary advantages for investors. I can't see anything but net downsides to the flow of investments if any of these parameters are changed.
16. Visa-less travel to/from EU means people can be more flexible or leave it late to make travel arrangements for holiday, business or on-site jobs. A behaviour change in travelling arising from brexit will impact the travel industry. Travel represents 3% of GDP [skift]
17. Staying in EU means you can sometimes blame them when something goes wrong. Outside EU we'll just end up beating and fighting amongst ourselves.
18. It is much faster and cheaper to travel, transport goods, research and explore new business opportunities with our neighbours EU (120-1200 miles away) than with any other non-EU economy - they are all 4k to 12k miles away.

Other comments

1. Most employers starting out or expanding their businesses do so from their workplace near their home. Entrepreneurs in UK are quite likely based in asset-rich S England. The flexibility of migrants workers already willing to move into the area for work help those businesses grow faster.
2. If businesses in booming England recruit foreign migrant instead of British workers, it would be because there are only a very small number of vacancies (that offer realistic careeer opportunities and pay) that UK workers could find it worth their while to relocate, with disruptive effect on families, into different, usually more expensive, part of the country.
3. The chancellor's upbeat narrative is that the size of UK's economy may overtake Germany's within 20 or 30 years. UKIP's narrative is that UK's population is heading towards 80M. These two schoolboy predictions are consistent. In the past decade we have seen inadequate pace in the supply of housing. This had quietly benefited those homeowners who are already comfortably well off, but very bad timing for people who are struggling with rising rent in areas that are excessively-popular for gentrification by the upper middle-class, or for hosteling to house working-class migrants.
4. Inadequacies in public services is the result of disappointing government reaction to changes in social demographics of migrants in areas of increased business activities that have attracted them. Apparently, according to the Conservative manifesto 2015, the government is supposed to have a fund to ease pressures in these local areas.
5. UK is the world's 5th biggest importer, 10th biggest exporter. UK's current account deficit (for import export of goods and services) is running between -2 and -5% of GDP [economicshelp] This contrasts with Germany's (+6%) and Netherlands' (+11%) surpluses [worldbank]. The phenomena that UK runs a persistently high trade deficit, yet that seem not to have harmed the exchange rate, may have something to do with the situation that UK is benefiting from inflows of capital (for example, into London's property market), from the pool of wealth earned by foreigners elsewhere.
6. Our negative trade balance is an indication that we do not have capacities to make, to the value of, all the produce we currently consume or utilize in goods and servies we then re-export.
7. On a Brexit, Greece and E Europe could persuade EU to restart trade with Russia, with UK position largely irrelevant.
8. On her own, I think UK is in a very weak position to negotiate an improved trade-arrangement with US because we will staunchly protect our free-NHS from US big businesses (not to do so is political suicide). However by being in the EU, because of EU's total proposition as a trading bloc is so compelling, I reckon compromises and selective exceptions can be accommodated to the net overall advantage to all. So I think UK is stronger in EU for TTIP negotiations.
9. IMO, it is embarrassing (for the leave campaign) to suggest that by merely being a big customer, UK is in a position to weaken the German car industry! If the tariff barrier comes up and badly affect export of German cars to UK, then (as an engineer I would expect) German manufacturers would simply retool and change some specifications of their cars to sell them to the rest of the world at lower prices. The most important thing in German macroeconomics is to utilize their unrivalled depth of engineering talents and skilled workforce to compete in and maintain their economic advantage and share of the global market.
10. I note that on last year's 'Ed stone', Labour's number 4 pledge was "Controls on immigration". At this late stage, the referendum may well hinge on enough Labour voters having faith that their noise about immigration have been heard at EU level and that Parliament will press for more constraining measures on migration. (To be fair, mathematically and politically as opposition to the left, Labour MPs never really had to argue nor think much about the issue of immigration unless enough Tories are split and needed their votes.)

I am voting in.

Where was kaimagpie when Bowie bowed out

These are parts of my new PC.
After trialing the new Windows 10 for many days I began moving and reorganizing a considerable amount of files and data onto it, intending to

ch-ch-ch-ch-changing over to it as my main PC.
Everything was hunky-dory,
though the kit was scattered, floating in the most peculiar way.
But on clumsy Sunday,
the plug on the drive broke;
its pins frayed like some spider from Mars.
Have I just seen my work of thrice months smoked?

No one would have believed, in the early years of the 21st century, that one valuable disc drive could,
could have died like this [1].
My heart in mouth if the data on it are to be missed!

On carefully making the pins align,
and shim them with the broken fragment,
the cable link was good again.
Though it grounded control of some ps2 key clicks,
as a USB tin machine, the drive was mend.
Away from steping backwards to the wardrobe I leapt.

So from being like an absolute beginner
We can be Heroes I say
by keeping the connector together
Just for one day.



KSN 2016


[1] I am befuddled why the market is so flooded with sata data cables that have the gimmicky right-angle connectors! When fitted to a drive, such cable would stick out alone and not lined up with the power cable (that are always straight) next to it, so prone to pressure pushing down on it.