Today on #CampaignCheck: The Liberal Democrats claim that they're now the party of "sound finance" with the toughest fiscal rules. bbc.co.uk/news/av/electi… This would be a big deal. Have they really taken the Tories' place as the party of fiscal discipline? To find out read on...
There are broadly speaking two kinds of fiscal rules. One which limits day-to-day spending/borrowing - CURRENT spending. The second kind puts limits on how much you can invest - CAPITAL spending. Before we get into the nitty-gritty, it's worth emphasising:
ALL major UK parties (Con, Lab, LD) are loosening fiscal rules this election. ALL their plans imply govt will carry on notching up deficits as far as the eye can see. Most of this new spending will be on INVESTMENT. Key differentiator for the LibDems is on current spending...
Tories & Labour both propose balancing the current budget over a 3yr & 5yr horizon respectively. Their rules give them some (not much) headroom to spend more or cut taxes. This chart shows you broadly how much (NB Tory prob have more headroom following today's C-tax cut u-turn)
LibDem rule is to target a 1% of GDP SURPLUS on the current budget. In other words, it looks a lot tougher than the others' rules (the yellow line here). That implies cuts/tax rises - tho they say there'll be a "remain dividend" that will bring in money to help meet the target
But here's the thing, that target, designed by the @resfoundation, has some important small print (see below). It's better described as a "range" rather than a simple number target. If the economy disappoints the rule will allow the LibDems to borrow, well, quite a lot
In other words, the LibDem fiscal rule is actually better depicted like this: a massive range which, esp in the event of a recession, could allow them to borrow even more than the major two parties.
The LibDem rule on the current budget is in some ways more sensible than the other parties', which look quite inflexible. If there is a recession there's a sig chance Lab/Con bust their rules overnight. BUT do the LibDems really have TOUGHER rules than the others? Not really.
Esp when u consider what they're spending on investment: basically smack bang between Tories and Labour. "Sound finance"? "the party of fiscal responsibility"? Hmm, not quite. Rules maybe slightly better-structured but it's not clear they're much tougher #campaigncheck
I'm told the LibDems are also adopting the @resfoundation rule on investment: "to deliver an improvement in public sector net worth". Basically the same rule as Labour. They'll ask the NAO or OBR to regulate it and ensure those investments are sensible...
This @resfoundation report has been used as the blueprint for new fiscal rules for:
Conservatives ✅
Labour✅
And now the LibDems✅
raising a question: has ANY single recent think tank report had as much influence on economic policy? resolutionfoundation.org/app/uploads/20…
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The Chinese owners of British Steel say they are now considering shutting their blast furnaces and end steelmaking at Scunthorpe in early June - only a few months away.
It would mean an end of virgin steelmaking in the country that invented it during the industrial revolution
British Steel say the main question now is timing: whether the operations will close in June, in September or later.
It says tariffs are one of the reasons the blast furnaces are "no longer financially sustainable".
Press release 👇
The news means @jreynoldsMP faces two interlocking crises in the coming months: 1. The imposition of US tariffs on an ever growing segment of British exports 2. The end of virgin steelmaking (the UK would be the first G7 country to face this watershed moment).
This is big stuff
Donald Trump just announced 25% tariffs on anyone importing oil from Venezuela.
This is odd.
Because the country importing the most crude from Venezuela is... the US.
Capital Economics chart of Ven oil exports by Capital Economics via @rbrtrmstrng
But it raises a bigger point
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Why does the US import so much oil from Venezuela?
Mainly for the same reason it imports so much oil from Canada.
And no it's not just because they're close.
It's because most US refineries are set up to refine the kind of oil they have in Venezuela and Canada.
To understand this it helps to recall that crude oil is actually a broad term. There are LOTS of different varieties of crude - a function of the geology of where the oil formed and the organic ingredients that went into it millions of years ago.
It's called "crude" for a reason
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Here's a thread about ALUMINIUM.
Why this commonplace metal is actually pretty extraordinary.
How the process of making it is a modern miracle...
... which also teaches you some profound lessons about the trade war being waged by Donald Trump. And why it might be doomed.
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Aluminium is totally amazing.
It's strong but also very light, as metals go.
Essentially rust proof, highly electrically conductive. It is one of the foundations of modern civilisation.
No aluminium: no planes, no electricity grids.
A very different world.
Yet, commonplace as it is today, up until the 19th century no one had even set eyes on aluminium. Unlike most other major metals we didn't work out how to refine it until surprisingly recently.
The upshot is it used to be VERY precious. More than gold!
🚨TARIFFS🚨
Here's a story that tells you lots about the reality of tariffs both for those paying them & those hoping to benefit from them.
A story of ships, storms, bad luck and bad policy.
It begins a week and a bit ago, with a man frantically refreshing his web browser...
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That man is Liam Bates.
He runs the UK unit of a steel company called Marcegaglia. They make stainless steel - one of the most important varieties of this important alloy. The method of making it was invented in Sheffield. And this company traces its DNA back to that invention.
Watching the process is TOTALLY amazing.
They tip a massive amount of scrap: old car parts, sinks etc, into a kind of cauldron and then lower big glowing electrodes into it.
Then flip the switch.
⚡️Cue a massive thunder sound as a controlled lightning storm erupts inside it.
🧵Three years ago, when Russia invaded Ukraine, EU, UK and other nations vowed to wage economic war, via the toughest sanctions in history.
So... how's that going?
We've spent months documenting what ACTUALLY happened. Here's a thread of threads on the REAL story on sanctions...
1. Flows of dual use items, including radar parts, drone components and other parts used by Russia to kill Ukrainians, carried on from the UK and Europe to Russia, via the backdoor (eg the Caucasus & Central Asia)
2. Of all the goods sent by the UK to Russian neighbours, few were as significant as luxury cars.
Having sanctioned Russia (the idea being to starve Putin's cronies of luxuries) Britain (and Europe more widely) began sending those sanctioned cars in via the backdoor instead
If the main thing the US really wants out of a deal with Ukraine is "50% of its rare earth minerals" then I'm surprised this can't be wrapped up pretty quickly.
Why? Because Ukraine doesn't HAVE many rare earth resources.
Really. As far as anyone knows it's got barely any...
Yes, Ukraine has lots of coal and iron and manganese.
It also has some potential sizeable reserves of stuff like titanium, graphite and lithium. Not to mention some promising shale gas.
But of the 109 deposits identified by KSE only 3 are rare earth elements
Now in one respect I'm making a pedantic point: a lot of people say "rare earth elements" when they actually mean "critical minerals".
The two aren't the same thing.
Rare earth elements are a v specific bit of the periodic table: actually they're NOT all that rare.
More on them👇