The Tory former chancellor was told during an interview on Sky News this morning that the current tax burden is 36 per cent of GDP and it is set to rise to 38 per cent.
Asked if the UK was close to a “counterproductive” tax burden level, Lord Hammond said: “Yeah, I think we are. I think that there is a danger that taxation becomes so high that it interferes with the normal operation of the economy and it drives people to make investments and to carry out entrepreneurial activity elsewhere.
“The problem of course is worse than it sounds because we have also got a demographic profile that is going to see demand for public services pushes still higher. We have got the huge cost of the energy transition to finance.
“And we have also got to invest more in defence as the world has become a more dangerous place around us.
Everything gets replaced at some point. So, wait until it needs to be replaced then replace it. Job done.
This is also what the Nobel winner for the economics of climate change said we should do too. So why isn’t that the plan?
“The problem of course is worse than it sounds because we have also got a demographic profile that is going to see demand for public services pushes still higher.”
Maybe some demographics would be less dependent on public services if the government hadn’t nicked so much of their money
“Everything gets replaced at some point. ”
I doubt that much of what the State has built in the last 50 years will ever be fully replaced. Maintained yes, patched up yes, but knock it down and start again I doubt it. They can’t afford to do that. They have made building stuff in the UK so expensive that there is no way we can ever afford again to have what we have now, once its past its lifespan.
The problem of course is worse than it sounds because we have also got a demographic profile that is going to see demand for public services pushes still higher
Translation: the next 20 million Bharat scented immigrants will fix it.
There is a specific principal/agent problem for heating in rented properties: the landlord has limited interest in installing a more efficient boiler / heat pump / solar panels / insulation, because they don’t see the savings. So far the govt has tried to solve the problem by mandating a certain level of EPC compliance for rented properties, but it’s a messy hack.
Landlords’ EPCs are the launch, owner-occupied will be the roll-out.
People will learn the economics of it, the hard way.
This is also what the Nobel winner for the economics of climate change said we should do too
That someone could win the Nobel economics prize for saying that is a good reason not to take economists too seriously
“We have got the huge cost of the energy transition to finance”
There’s a simple answer to that: Give up the absurd belief in Net Zero, rescind the 2008 Climate Change Act, stop throwing subsidies at wind & solar, etc, etc.
“But the energy transition shouldn’t cost anything at all”. Hmmm. I thought we should, approximately at least, invest in things that have positive net present value even if they have short term costs. Even the Climate Change Committee (Figure 5.3, Sixth Carbon Budget Report) makes clear that there is upfront capital and investment cost of about £1.4tn between now and 2050. But then it promises operational savings of about £0.9tn over the same period. As the expenditure is up-front (their projected cash flows turn net positive in 2044), the NPVs are still not positive using these calculations alone. So the economic case comes from monetising social benefits as well and taking the NPV beyond 2050. You can talk about whether that is right or not, and ultimately net zero is a political not economic target. But no-one argues (to my knowledge) that you should only do things that are cash flow positive in all years. The Nobel Laureate you refer to certainly wouldn’t argue that.
I am indeed over egging my argument. But the “Do it right now!” vastly increases the costs over the “Replace when worn out”. And, possibly only arguably, the second has no additional costs.
I wonder if Tim is aware of this?
https://www.chemistryworld.com/news/lithium-discovery-in-us-volcano-could-be-biggest-deposit-ever-found/4018032.article
Nov 2020: https://seekingalpha.com/article/4384678-be-wary-of-lithium-americas-just-be-wary-of-lithium
Is there ever a difference between what government tell us the cost or savings of a project will be and what reality delivers?
I mean, £1.4 trillion spent on Net Zero will garner 1.1Trillion in savings (according to Institute for Government) sounds reasonable, but will it work like the projections for HS2 (only in reverse)?:
2010 ish original forecast = £32.7Bn
2013 = £50Bn (they neglected to include the cost of the rolling stock in the original budget!!!!!)
2014 = £56.6Bn
2019 = £87.7Bn *
2020 = £98Bn
2023 = £106 Bn.
Perhaps the real savings from net zero will amount to about 17/6d and we’d have shelled out 10 Trillion……
* The Deputy Chair of the committee disputed this and said the real figure was closer to £170Bn…….
Pile o’ money theory indicates that the goal is to maximise the size of the pile rather than to minimise the overall cost or (God forbid) produce a positive return. The more money the more of it that is available for trousering by all concerned. Nobody who matters wants it done for less.