Climate change just got cheaper – or maybe not …

Britain’s fiscal watchdog – the Office of Budget Responsibility (OBR) – has some good news.  It thinks the cost for the UK of getting to zero carbon could be much less than anticipated:  

While unmitigated climate change would spell disaster, the net fiscal costs of moving to net zero emissions by 2050 could be comparatively modest.”

Under its ‘early action scenario’ government net debt would rise by a mere 20% of GDP in the years to 2050 from the current 105%.  That almost seems encouraging when compared with the near-30% of GDP increase responding to the Covid pandemic , and the roughly 50% surge which followed the global financial crisis.

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NZ public service reform for the UK?

It’s not unusual for governments to decide the solution to their frustrations is to tweak the machinery of government.  Nor for senior public servants to channel those ambitions to safety.

But things look more serious in the UK.  A sequence of reports from high-powered ‘independent’ commissions and well-connected think tanks are floating proposals which bear more than a resemblance to the state sector reforms implemented in New Zealand at the end of last century.

For one of the key players, the seeds of change were planted back in 2010. Back then, Michael Gove (now the Minister for the Cabinet Office) was put in charge of education.  He coined the term ‘the Blob’ to describe the coalition of resistant civil servants and external ideologists who opposed his proposals to change the school system.  And helping him on the Blob job was Dominic Cummings – PM Boris Johnson’s erstwhile chief strategist.

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Has ‘Johnsonism’ arrived?

Britain’s new health minister, Sajid Javid, says he will keep wearing a mask after formal restrictions are removed in the next fortnight.  It’s a more political than public health gesture.  Unless perhaps he’s meeting unvaccinated ministerial visitors from Australia or New Zealand.

Britain’s Covid debate is morphing faster than the virus.  Thanks to the fast spreading Delta variant and a super-charged vaccination programme it’s plausible that pretty much everyone bar Scottish lighthouse keepers will have had Covid antibodies delivered to them by the end of the year via neighbours or needle. 

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Let’s wish O’Connor well, as he dines with UK Minister in quest to secure a free trade deal – but Aussies are higher in the queue

Trade minister Damien O’Connor dines with his UK counterpart Liz Truss tomorrow  to begin the heavy-lifting on a NZ-UK free trade agreement.

The early signs are ominous.  Ozzie PM Scott Morrison managed to attend part of the G7 meeting in Cornwell where Australia’s FTA agreement was raised with the UK’s Boris Johnson.

Morrison says he’s waiting for ‘the right deal’ before the UK-Australia free trade agreement (FTA) is finalised, and the UK is eager to launch its post-Brexit economy by securing free trade agreements covering 80% of its trade within the next three years.

The UK Department for International Trade believes a trade deal could secure an additional £900 million ($1.6 billion) in exports to Australia.

In 2019-20, two-way goods and services trade was valued at $36.7 billion, making the UK Australia’s fifth-largest trading partner, according to the Department of Foreign Affairs and Trade.

Morrison hopes to finalise the FTA tomorrow if certain issues can be dealt with.

But elements of the Australian FTA have created alarm within the UK. The National Farmers’ Union publicly begged for tariffs to remain on Australian beef and sheep.

NFU president Minette Batters says a tariff-free trade deal with Australia will jeopardise UK farming and could cause the demise of many, many beef and sheep farms throughout the UK.

There are several challenges for NZ.  It’s just as well, therefore, that O’Connor is accompanied by NZ trade supremo Vangelis Vitaly, a recognised world authority on trade policy.  Continue reading “Let’s wish O’Connor well, as he dines with UK Minister in quest to secure a free trade deal – but Aussies are higher in the queue”

G7 – the view from the top is fine, if a bit fuzzy

The omens were good for the G7 summit at Carbis Bay in Cornwall.  Untypical blazing sunshine and a victory for England’s footballers in the Euro Championships put the hosts in fine fettle (qualified only slightly by the NZ cricketers’ series win).  

The first and most important objective was achieved: the world leaders managed to agree not to disagree. Even better, no one called the host, Britain’s PM Boris Johnson, “weak and dishonest”, no matter how much they might have been tempted.

But despite the 25 page summit communique, direction and leadership was a little harder to find.

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G7 – not so good in the margins

Some say it wouldn’t be a proper G7 summit without a row between the UK and France.  In this case, Boris Johnson taking the opportunity to ask France’s President Emmanuel Macron how he would feel if Toulousain could not sell their sausages in Paris.

The context for his remark is the negotiation between the UK and the EU over the application of the Brexit treaty to Northern Ireland.

Readers might recall our suggestion at the beginning of the year that the trade arrangements might prove a “charter for squabbling”. Perhaps that was too optimistic.

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Boris Johnson: the man who saved Europe?

This year has seen some spectacular political victories: Jacinda Ardern in NZ’s election and now Boris’s post-Brexit trade treaty with the EU. But having secured a triumph, the risk is in resting on the laurels, when one should be looking to exploit to the full.

And Boris’s victory does look comprehensive. His critics alternated between saying he would never get a deal or it would be a very bad one. In fact, he has achieved his main objectives of rolling over the existing tariff-and-quota-free trade terms and securing recognition of the UK’s sovereign equality in managing the ongoing relationship.

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Brexit ho – is a deal in sight?

On again, off again.  Then, after British PM Boris Johnson’s statement that there was no point in continuing negotiations without movement from the EU, there are signals that a trade and economic deal might be possible in the next few weeks.

We shall see.  But it’s a good moment to pay tribute to the skill of the negotiators and their principals.

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Covid: everybody loses – at first

As we emerge from the Covid panic phase, you might think that the situation bears an increasing resemblance to the slow motion crises of the 1970s and 80s.

Recall the political economy big picture. The old system had had a good run.  Patterns were familiar and tools had developed to manage political pressures – a nudge here, a subsidy there, a few more jobs in state forests or on the railways, an occasional long-term policy artfully planted and left to mature.

But as growth slowed, economic pressures built and became unmanageable in the old framework.  Political confusion ensued: the slogans stopped working because the voters’ demands couldn’t be reconciled.

This suggests we need to figure out what people expect of government as a result of the Covid crisis – and how that might be orchestrated and channelled through the voting system.

Continue reading Covid: everybody loses – at first