Monday, 13 June 2016

Brexit and model railways

Over at RMweb there has been much discussion regarding Hornby's financial situation. Perhaps too much I thought, with the risk of becoming a self fulfilling prophecy. If they are going through a difficult patch it seemed unhelpful to have so much speculation on the UK's most widely read web forum. I also offered the opinion that we should maybe give them a break particularly with the unsettling effects of the imminent European referendum. 

This got me thinking about the effects on our hobby if we left the EU. If there is the financial turmoil that the experts predict on leaving then I'd guess that hobby spending will shrink as enthusiasts up and down the UK concentrate on the necessities of life. Most of us will have kits and components put aside which would allow us to keep on pursuing our interests for a while. However the rtr chaps, cottage industries and retailers will all feel the pinch as Joe public reins in his spending.

What happens if  we don't experience a financial shock on exiting the EU, however unlikely this scenario is, will it be business as usual? Unfortunately I don't think it will; let me explain. Thanks to the internet and e-bay the world is our shop, we can buy from every continent. Over the past few years I've bought things for my model railway from Japan, China, Australia, America and various European countries as well as the UK. This could be said to lend weight to the leave campaign's  assertion that we trade with the world and that if we leave the single European market we will still be able to trade with Europe in the way that we trade with the rest of the world. However at the moment there is one crucial difference in buying from Europe compared to the rest of the world and that is import duty. Though HM Customs seem to ignore small value items, they are keen on collecting duty owed on medium and higher value purchases from outside the EU. This duty is compounded by the collection fee charged by the Royal Mail who collect duty for HM Customs. Purchases from the EU carry no duty and no fee from the Post Office as there's no duty to collect. The result of this is that I look to the UK and continental Europe for my modelling requirements, before I think of widening out my search. If duty was payable on EU imports I would buy less even if my total spend were to remain the same. Imagine the effect on the trade if this effect was repeated in every modellers budget.

Manufacturers like Heljan, based in Europe but with a significant UK market would see their prices raised by the duty payable on them, and by extrapolation fewer sales. Leaving the EU wouldn't make life easier for Hornby with its extensive range of European brands. Presumably duty on sales to the EU will similarly hinder companies selling to that market; while there may not be a big market for UK outline trains in Europe, the peripherals of track, control and accessories seem to have a reasonable market share.

I'll should put  my hand up as an instinctive 'remain' voter, but the above has helped me marshal my thoughts on trade and economics, albeit on a small scale.

My apologies for the lack of pretty pictures, normal service will be resumed as soon as possible.

3 comments:

neil whitehead said...

Very well argued. As a retired resident in France there is no question of the way I will vote! With the world in turmoil it seems to be better to remain part of a very large barrier free market rather than setting off on a journey that has no destination and the UK economy could easily come off the rails.

Kane said...

Very well put and if only the national debate had directed some attention to the numerous small ways that leaving will cumulatively have a big negative effect on people's standard of living and the wider economy.

Best wishes.

K

PS Nice to see pictures of Shell Island again. A lovely layout.



Anonymous said...

Interesting reading these two remoaners views at a distance and seeing what utter rubbish they are!