Dear Subscribers,
The UK has been exempted from President Trump’s latest tariff hike. While levies on steel imports from other parts of the world will go up to 50%, UK exporters will continue to pay just 25% until 9th July, when tariffs will fall to zero (except on steel imported to the UK to be finished and then exported on to the States). Were the UK still a member of the EU, we would be subject, as Member States are now, to the higher rate of tariffs, and would still be stuck in the preliminary stages of a trade deal with the US rather than finalising details in preparation for implementation.
The government is reportedly considering subsidising energy costs for manufacturers to prevent rapid deindustrialisation as a result of high electricity prices. We are fast approaching the absurd situation in which the government drives up energy prices with green subsidies and regulations and then introduces more subsidies to try and drive them back down again. Things would go better if the government just stayed out of it.
Ed offers a helping hand
The Energy Secretary Ed Miliband has said that the majority of new homes built in the UK will be required to have solar panels and heat pumps. The added costs to developers will no doubt slow down efforts to increase the nation’s dwindling and deteriorating housing stock. Remarkably, Miliband claims that the rules would save people money. If that were true, then why not let people decide for themselves?
The government’s anti-radicalisation program Prevent has published guidance which labels concern about mass migration as ‘terrorist ideology’. Several commentators have pointed out that the Prime Minister’s change in rhetoric over the past few weeks arguably makes him an advocate of ‘terrorist ideology’. The guidance shows the growing (and potentially dangerous) gulf between the views of bureaucrats in Whitehall and those of ordinary people.
Are border-controls ‘terrorist ideology’?
Media
Brian Monteith on Reform’s progress in Scotland
Isaac Goldring on why businesses are fleeing to the US
Blog
Brexit not the reason for sluggish UK export growth by Briefings for Britain
The UK government and a wide range of commentators continue to claim that Brexit has had a large negative impact on UK economic performance. But while UK export growth in recent years has been sluggish it has been far from disastrous and the negative impact on GDP is likely to have been a fraction of 1%. A large part of the sluggishness of UK exports has been due to other factors including soaring energy costs, electric vehicle mandates and reduced re-exports of non-UK products.
Importantly though the real economic losses from 2018-2024 are far lower than these headline numbers suggest because only a small fraction of the ‘exported’ value in 2018 represented UK value-added – often it would have been little more than some packaging.
Large negative trade impact from The Windsor Framework by Esmond Birnie
The current Windsor Framework version of the Northern Ireland Protocol has had a large chilling impact on trade between GB and Northern Ireland. Large numbers of firms now sell less in NI than they previously did or have ceased selling altogether.
Substantial proportions of businesses identified the Protocol as a challenge: almost a quarter of manufacturing and over one-fifth in retail. Amongst all businesses in 2024-25 the proportion was about one-nine. To put that into perspective, that proportion was higher than the percentage of businesses which cited rules and regulations or supply chain disruption or transport capacity.
Key Points
If you wanted to design a policy programme which would bring about stagnation and decline, the Labour government’s record over the past year would be a good place to start. Two announcements this week show the characteristic lack of joined-up thinking at the top of government and the extreme lengths Keir Starmer will go in pursuit of green ideology.
First, there is now talk of subsidising energy costs for manufacturers. The reason why manufacturers are finding energy costs prohibitively high is because Ed Miliband (and his predecessors as Energy Secretary) resolutely refuses to allow Britain to use its readily-available natural resources to provide cheap and efficient energy, preferring instead to rely on imports from abroad and unreliable, expensive green energy. In less bellicose times one imagines the Labour government might have been glad to see the deindustrialisation of the UK completed, but no credible government could let industries die while also talking up the threat of war from Russia inter alia.
Rather than solve the underlying cause of the problem, the government apparently prefers to spend scarce public funds on (and add a new layer of bureaucracy to) a problem which it could solve, if it wanted to, while cutting costs to the taxpayer. The fact that Starmer indulges this approach at a time when he is having to manage warring factions in his own party fighting over spending cuts and tax risers shows just how deep his ideological commitment to green energy goes.
Second, there is the announcement that newly-built homes will be required to have solar panels and heat pumps. It is widely acknowledged that Britain is in desperate need of new housing. The increase in population over the past two decades (driven primarily by immigration) has not been matched by a proportionate increase in the number of available houses. The inevitable result is that living conditions have become more cramped. The decision to impose more regulations on house-builders will only serve to decrease the number of houses that are built. Though the cost of installing solar panels is reduced if, as during construction, no additional scaffolding is required, the pitiful current rate of housebuilding should deter any imposition of additional costs. As long as this goes on, people in Britain will find themselves fighting for ever shrinking living spaces at ever higher prices.
By indulging the new rules, Keir Starmer is revealing a preference for environmentally-friendly destitution over real wealth and prosperity. Despite putting economic growth at the centre of his election campaign, Starmer has shown time and time again that he cares more about making a negligible impact on global emissions of greenhouse gases than he does about the welfare of the electorate.
