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27 Oct, 20 tweets, 5 min read
Sub 2% growth as the new normal is pretty grim. Someone cleverer than me can do the compound growth since 2008 but it doesn't sound like a lot.
Suspect that between the IFS and inflation we're going to find out that the eye watering sums being promised by the Chancellor aren't quite all they seem.
This doesn't add up in totality as far as I can see. Increased spending to make up some of the cuts of the last ten years, yet with a very weak future growth forecast plus the return of >2% inflation. Look forward to the analysis.
To no great surprise the science funding target won't be met.
I think we can definitively abandon any pretence the government cares about taking action against climate change.
Global Britain innit?
Reality of the budget seems to be a lot of announcements that will ultimately make little difference, and a pretty worrying overall economic outlook.
Anyway, this morning's delivery was well timed... #fuelledbyredwine
Serious question though on the budget.

What was it actually all about, other than we have a bit more money to spend? There seemed no obvious theme, no long term plan, no rhyme or reason? No low or high tax, low or high spend. Almost entirely transactional.

Is that it?
A budget for a sunny day assuming sunny days to come when the weather forecast says it is going to rain for most of the next few weeks.

Not sure this is going to age too well.
High tax UK.
Looking forward to more nuggets like this from what I'm starting to think of as the Johnson shopping trolley budget.
Project fear innit? (also totally in line with the average prediction ahead of Brexit). Wonder whether any previous UK government policy led to a 4% GDP hit.
So higher spending, higher taxes, but not really clear there's much logic to what the money is being spent on, meanwhile we're facing a headwind of trade barriers in terms of future growth. Not the greatest picture.
What I was suggesting earlier about growth since 2008. Poor. No great suggestion of improvement from this budget.
Meanwhile, one of the government's flagship policies for growth...
Another promise by the wayside...
Still fascinated by a Chancellor faced with poor long term growth projections seemingly saying "screw it, let's spend a temporary windfall randomly" presumably in the hope something else will come up in the future.
The Conservative Party is a different party to that of 2016. Doesn't seem to worry most of them.
Stunning chart.

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More from @DavidHenigUK

David Henig Profile picture
29 Oct
I love* the way the Brexit ultras are now saying that a row over fishing with France proves we're right to try and start a trade war over the ECJ role in the Northern Ireland protocol...

* - I lied. I don't love it at all.
We had to deal with French political showboating as EU members, and we'll have to deal with it outside (as they will ours). C'est la vie, that's just the way it goes.

On balance it would be best not to turn every fishing boat incident into a potential trade war. Interests.
Oh, and can we skip the 'dispute settlement in trade deals' stuff that I hear across the Brexit / remain aisle. That's a formality rarely used. It ultimately always comes down to the political and official relationships, so better work on those.
Read 5 tweets
David Henig Profile picture
29 Oct
This is important. With the UK government veering between disinterested and hostile towards the EU, business will need to try its best to influence the many matters which will inevitably affect them. The US example is a decent one. ft.com/content/6b4b90…
It again raises the question of what is in the best interests of the UK, a minimal and hostile relationship with the EU driven by those who regard the bloc as a historical abomination or worse, or something more constructive based on our interests. Which will still never be easy.
The fact is the EU and member states do not care much about third countries, but third countries have to care about the EU to the extent of trade and other interdependencies, regulatory power, and global issues. Tough but essential to try to lobby and influence.
Read 4 tweets
David Henig Profile picture
28 Oct
Do I really have to do another set of tweets tomorrow about the stupidity and futility of a government not entirely united and particularly untrusted threatening a trade war with our nearest large economy and a diplomatic incident with our self declared closest ally? Really?
Just. So. Tedious. And damaging. Got to say my patriotism doesn't extend to trashing my own country, but perhaps that's where I'm getting it wrong.

Oh, and that's another UK hosted summit to be overshadowed by our threats towards others.

Diplomacy. Something we used to do.
There is a better way to behave towards neighbours that threaten to damage yourself if they don't do what you want. Ain't a Brexit thing. Just common sense. Build relationships rather than trashing them. And look after fragile peace in your own country.
Read 4 tweets
David Henig Profile picture
28 Oct
Important that the government does seriously consider what would happen to us in a trade war with the EU.
Important to remember though that the UK government really doesn't want to invoke Article 16, and it is an article of faith to them that being seen to be tough is necessary to get what we want from the EU.

Given the potential consequences of triggering Article 16 include a trade war with the EU and diplomatic conflict with the US we aren't in a strong position. Though I suspect government ministers may not say as much.
Read 7 tweets
David Henig Profile picture
28 Oct
As COP26 approaches my weekly @BorderlexEditor column discusses the thorny topic of the EU's proposed Carbon Border Adjustment Mechanism. Essential climate measure that should happen tomorrow or WTO illegal unilateralism? More the first... borderlex.net/2021/10/27/per…
@BorderlexEditor The debate on carbon border adjustment seems to start in the wrong place - WTO legality. The better question is whether we should prevent shifts of production caused by underpricing carbon, to which the answer should be a clear yes for anyone serious about climate change. Image
Once we establish the principle of carbon pricing, then the EU's action in bringing forward a CBAM proposal is welcome in forcing the issue to be seriously addressed. Their scheme might need tweaks, multilateral would be better. But something beats nothing.borderlex.net/2021/10/27/per…
Read 4 tweets
David Henig Profile picture
28 Oct
I would argue that the primary reason for sluggish UK exports is that for four years we have been suffering from low investment in, and exclusion from, European supply chains. Honda closing, aircraft engine demand slowing, doesn't help. ft.com/content/beec0a…
There is nothing in current UK trade or economic policy that will make much of an impact on exports, because they are primarily focused on removing tariff barriers to bulk exports, and that's not in the top few of problems we actually face.
The number one question for future UK trading performance is what the role is for countries which opt out of regional supply chains in a global economy largely dominated by regional and global supply chains. On balance that looks to be a struggle in goods, better in services.
Read 5 tweets

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