Good morning,
We’ve had some more details of Boris’ vision for a green recovery and a commitment of £12bn to help get us there – alright, only £4bn is new money, but it’s the headline that counts. The ten point plan is wide ranging and nothing if not ambitious, with gigafactories to be built in the UK to build the batteries that will store the renewable energy we create, small scale nuclear reactors to be developed so we can become better at having constant clean eneregy without the hundreds of miles it has to travel across the grid. Internal combustion engines in cars will be a thing of the past by the mid 2030’s, with a ban on the sale of purely petrol and diesel cars by 2030 and hybrids by 2035. We’ll also get 30,000 hectares of forestry planted every year by 2025 – that’s about the size of Milton Keynes – and the City of London will underpin it all by being a global centre for green finance.
The ambition deserves a round of applause, but the numbers don’t quite stack up. Even the government’s own advisers think it will take four times that amount of money every year to reach the targets being laid down by the PM. There is good reason to be optimistic though; the world is awash with cash looking for a long term yield and our expertise in delivering ambitious renewables projects in the private sector is world class, so if the government can create the frameworks and guidelines that means individual smaller scale projects can work in unison with larger ones, then they can sit back and let the experts take over.
Staying with government spending, there has been agreement on the largest increase in the defence budget in 30 years. The additional £16.5bn over four years will go towards cyber defence, artifical intelligence and a “Space Command”, which is presumably to join the ambition of Donald Trump’s Space Force. The big spending here is likely to come at a cost for other departments, which is far less likely to make the headlines, but we’ll be watching out for the cuts as and when they come. Another thought on this; do we get a refund from test and trace now that the army is finally involved and unsurpisingly doing a better job at a large scale, well organised deployment of personnel and systems than the private sector were?
The two big spending announcements couldn’t have come at a better time for those watching from Across the Pond. Joe Biden’s own initiatives when he takes office include a huge renewables push and he also wants to see Nato members spending more on defence. If Boris could then get a deal on Brexit, he’s got to be thinking he could be flavour of the month with the president elect?
That deal does seem to be eluding those at the negotiating table though and EU leaders are set to demand today that the European Commission publish its own no-deal plans and contingency measures to minimise the impact on their side of the channel. On this subject, I’ll be hosting a webinar next Thursday at 11am, alongside Ian Leslie from AON to try and give some practical insights into what businesses should be looking at in terms of managing their markets and trade risk over this period. We’ll keep it short and to the point and aim for specifics, not three word generalisations. You can register here.
On the Covid front: New York City is closing schools again, as the virus is ramping back up. This is the largest schools district in the country, with some 1.1 million school age children, though it was estimated that ‘only’ 300,000 had been back to school since the beginning of term.
Japan is very concerned about 2,000 daily reported cases, particularly as they’ve seen a quarter of those in Tokyo, which is particularly densely populated. So far Japan has recorded less than 2,000 deaths from the virus and only 125,000 infections, so a day with that many reportsed cases is a concern for them.
In the UK we’re hearing that 5 days of Christmas get togethers could cost us a further 25 days of lockdown.
Australia is having a mixed day: The good news is that the jobs market is booming in Victoria following the end of their lockdown. Employment was up by almost 180,000 jobs, compared to forecasts suggesting it would actually have shed a further 25,000 jobs.
The less good news came from comments from a Chinese government official saying “China is angry. If you make China the enemy, China will become the enemy”. Which is not what you want to hear from your largest trading partner. The Sydney Morning Herald has the story.
Today we need to look out for a UK-Canada trade deal. This is a bigger deal for Canada than for us, as we’re their third largest export market. That said, we’ll take all the deals we can get!
Have a great day
