Yesterday, the UK floated a set of ideas for managing the future of the customs frontier between the EU and the UK. They were broadly divided between two proposals: a first, based around some very practical ideas for using technology to streamline the movement of goods across a future EU-UK customs border. The second was a much more radical idea that the UK would offer to implement the EU’s own external border protocols on its behalf as part of a wider approach that would remove any need to process goods moving between the two markets. The first is sensible enough. How serious is the second?
One of the general conclusions from the recent UK general election was that it had marked a dramatic return to two party politics in the UK. Voters provided the Conservatives and the Labour Party with the highest combined share of the vote since the 1970s, at over 82%, and almost 90% of the seats in Parliament. The Conservatives saw their highest vote share since 1983 at the election. Labour surged to over 40% for the first time since 1997.
The publication this week of a review into the UK’s high-cost credit market is just the latest demonstration of the UK’s financial services regulator, the Financial Conduct Authority (FCA) regaining its mojo for activist policymaking. The FCA has always held a formal objective of protecting consumers, but this has often had to be balanced against the economic and political interests of the financial services sector. The weakness of the current government therefore gives the FCA an opportunity to return to a proactive approach, although maybe not the “shoot first and ask questions later” attitude of its first CEO, Martin Wheatley.
In publishing its NAFTA objectives last week, the Trump administration finally set the stage for a renegotiation after months of delay in Washington. The text of the announcement, which provides some sense of what a Trump-style NAFTA might look like, invites several observations.
As part of its long-awaited clean air plan, the UK government today announced its intention to ban conventional petrol and diesel engines in new cars and vans by 2040. Arguably, they need not have bothered. Many analysts now predict that, in terms of total cost of ownership, electric vehicles (EVs) will be the most affordable on the market by the early to mid-2020s. In that sense, the announcement fits with the UK government’s commitment to exit coal-fired power generation by 2025; while neither is as important as they first appear, both are undoubtedly landmark decisions.
Today’s summer recess in Westminster marks the end of a chaotic and tumultuous parliamentary session, which has concluded in a hamstrung government and a lame-duck Prime Minister. The next session is likely to be as unpredictable, with a series of legislative compromises, and Brexit taking up the majority of Parliamentary airtime. But what exactly can we expect from the second year of May?
The UK debate about tuition fees for university students can be seen as a triangulation of three sets of costs – private (to the graduate), public (to the taxpayer) and political (to the policymaker). The allocation of cost between the three actors has always been uneasy, and when the tension becomes unsustainable, change follows. The balance is once again shifting – the political cost of the status quo balance between public and private is growing quickly. If it becomes unbearable for policymakers, the rebalancing of cost back towards the state from the individual is the most likely outcome.
Unless you’re fond of ambling, it’s the choice of the destination that usually determines the path you take. The Brexit negotiation is no stroll in the park, but it now looks like one of those cases where it is the path that will determine where we end up.
Speaking before the European Economic and Social Committee this week, European Commission Brexit negotiator Michel Barnier painted a black picture of a post-Brexit world in which the UK failed to come to terms with the EU. A return to WTO rules for trade between the two markets; high customs duties, burdensome controls and higher transport costs. He insisted that even if a deal is reached, “frictionless trade” is unachievable.
The EU and Japan this week announced a political agreement on an FTA between the two sides after four years of negotiating. This is certainly big news in the generally calm waters of global trade negotiations. An agreement between the EU and Japan would create the prospect of the largest free trade zone in the world by GDP - the EU and Japan together account for more than a quarter of global GDP. But this deal had seemed rather becalmed a year ago. So, what is the significance of the ‘political’ in the ‘agreement’?