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Newsletter 07/01/24

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German farmers have been protesting this week against planned tax hikes on fuel.

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Dear Subscribers,

German farmers have been protesting this week against planned tax hikes on fuel. The tax hikes are part of the fallout from the €60 billion gap in the country’s finances after a ruling by the constitutional court blocking the reallocation of emergency COVID funds. Figures published this week showed that Germany’s energy usage in 2023 was almost 7.9% lower than 2022. The decrease was caused mainly by a decline in industrial output.

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The International Trade Secretary, Kemi Badenoch, visited Turkey this week ahead of negotiations on a new trade deal expected to begin this year. UK trade with Turkey increased by 17% in the year up to June 2023, and was given a boost at the end of the year when Turkish Airlines announced it had ordered 220 new planes from Airbus, many of them manufactured in the UK.

The Chinese car company Chery has announced that it is considering building a car factory in the UK. A company executive was quoted as saying that the size of the UK market as well as Brexit meant that opening a separate factory in the UK was a more attractive option than just opening one on the European mainland.

China has launched an anti-dumping investigation into spirits imported from the EU. The move, mainly targeted at imports from France, is being interpreted as a response to the EU’s anti-subsidy inquiry into Chinese electric vehicles.

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Farmers and hauliers have restarted a blockade of the border with Ukraine in protest against competition from cheap Ukrainian grain. The government has already met protestors’ demand for increased subsidies and lower agricultural taxes, but the protestors now say the government has not gone far enough.

Media

Ayaan Hirsi Ali on the President of Harvard and the ‘mafia of mediocrity’

Rory Sutherland on the Sovietisation of the UK economy

Blog

Will they, won’t they? By Graham Gudgin

It remains unclear whether the DUP will agree to the restoration of devolution in NI. Their protest against the NI Protocol is based on a fear that tying NI to EU regulations with a trade border on the Irish Sea will accelerate the drift to Irish Unity. This article shows that there is little sign of an emerging economic United Ireland.

The DUP have been right to oppose the NI Protocol but effective opposition came years too late after the 2017 origins of this policy. Together with the ERG wing of the Tory Party, they managed to obtain reforms starting with David Frost and coming to fruition under Rishi Sunak. The most egregious aspects of the Protocol were changed under the Windsor framework which removed

many aspects which had been unnecessary to protect the EU Single Market and which should never have been included. The PM is said to be irritated that the DUP’s failure to respond to how far the Windsor Framework went in meeting criticism of the Protocol. However, the UK Government has not done enough to recognise the failures of British statecraft in negotiating the Protocol, nor has it sufficiently reacted to Unionist fears that the Protocol has accelerated the drift to the Irish Unity which they exist to oppose. In practice Unionist fears are overdrawn and the Government should do more to point this out.

Key Points

Chris Skidmore MP announced his resignation of the Conservative whip and of his seat in parliament this week, purportedly in protest against the government’s plans to licence more oil and gas production in the North Sea. All is perhaps not quite as it seems, Mr Skidmore is on the payroll of a green energy lobbying firm and had already announced his intention to stand down at the next election. But even so, his objections to new oil and gas production are ridiculous.

Even if Britain achieves net zero by 2050, it will still at that point be using fossil fuels as sources of energy. Renewable energy is simply not abundant enough to provide all of Britain’s energy needs. The relevant question is therefore, “where should Britain get its fossil fuels from?”. For both environmental and strategic reasons, “the North Sea” is the right answer.

Starting with the environmental reasons, North Sea Gas has an average emission intensity that is half the size of imported liquefied natural gas. This is in part due to the process of liquefaction and regasification, and partly due to the emissions used transporting LNG across the world. Domestic oil extraction is also rapidly reducing the practice of ‘flaring’ whereby natural gas released in the process of extraction is burned in order to get rid of it. Flaring releases methane, which is 84 times more powerful in trapping heat than carbon dioxide. Flaring in the North Sea has decreased by 50% since 2018.

The strategic reasons are equally compelling. Though Britain’s biggest sources of oil and gas are Norway and the United States, it still relies on imports from countries in the Gulf. Increasing domestic production of oil and gas would reduce our reliance on Middle Eastern petrostates. Germany’s experience with Russian gas after the invasion of Ukraine should be a warning against relying on authoritarian regimes for our energy security.

Despite this, there is enough money swirling around green lobbying that it is possible to make a pretty penny grandstanding on new oil and gas production in the North Sea. We can only hope that this grandstanding never gets to influence actual policy-making.

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How you can help

There is much about Britain’s relationship with Europe that remains to be decided. Our MPs listen to their constituents. Do continue to send them links to our articles, especially on matters relevant to your constituency. Alternatively, make an appointment to speak to them at their next surgery. Let them know what you want post-Brexit Britain to look like.

Yet it is also time for unity and reconciliation. Keep reading our posts and share links to our quality content to help others understand how leaving the EU has benefited the UK economy and democratic governance. We aim to educate our critics to think differently and more positively about the long-term impact of Brexit.

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Yours sincerely,

Newsletter Editor

A Cambridge Philosophy Graduate

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Briefings For Britain