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UK Leads G7 in the Combined Metric of Economic Growth + Carbon Cuts

by John Brian Shannon

A new Energy & Climate Intelligence Unit report confirms that Britain has been the most successful G7 nation over the last 25 years on the combined metric of growing its economy and reducing greenhouse gas emissions.

In the 25-years since 1992 when clean air and the corresponding lowering of healthcare spending became an important policy for the United Kingdom, the country grew its per capita GDP by 130% while lowering GHG emissions 33% — proving that a country can simultaneously grow their economy AND lower greenhouse gas emissions.

In the same timeframe, Japan grew its per-capita GDP by 83% while increasing its per-capita emissions by 10.5% — making it the worst performer of all the G7 nations. (Not to pick on Japan which has the most difficult population pyramid demographic problem of any nation on the planet)

“It’s really time to slay once and for all the old canard that cutting carbon emissions means economic harm.

As this report shows, if you have consistent policymaking and cross-party consensus, it’s perfectly possible to get richer and cleaner at the same time. Britain isn’t the only country that’s done it – it’s true for most of the G7 – but we’ve clearly been the best of the bunch.

There are signs that these successes are now transferring to the rest of the world. Globally, emissions have been flat for three years while world GDP has grown by 8%. But science indicates this isn’t enough to fulfil the objective of the UN Convention and prevent ‘dangerous’ climate change – for that, emissions need to start falling soon. This study should give confidence that with good policies, it’s achievable.” — Richard Black, director of the Energy and Climate Intelligence Unit

And in the United Kingdom, Scotland has led the way on the switch from coal to renewable energy and it rightly deserves much of the praise handed to the UK over the ongoing clean air success story, while England and Wales deserve much of the credit for growing the UK economy. As usual, Northern Ireland is ‘holding its own’ and although it is presently caught in the middle of an election cycle it seems that it might ramp-up to follow Scotland’s environmental success, post-election.

Scotland sets 50% renewable energy target (BBC)

Pre-Brexit, UK Leads G7 In ‘Conscious Decoupling’ Of Economic Growth & Carbon Cuts (CleanTechnica)

The Road to Decoupling: 21 Countries Are Reducing Carbon Emissions While Growing GDP (World Resources Institute)


By far, the biggest reason UK emissions have dropped in every decade since WWII is a HUGE shift away from coal. At one time almost 100% of Britain’s electricity was sourced by brown or black coal. Some of which was replaced by hydro-power, and later, by nuclear. Eventually, even more coal-fired capacity was replaced by natural gas, and most recently, by renewables.

The inexorable march away from coal-fired generation in the UK has resulted in cleaner air. It is by far the biggest factor in Britain’s ongoing clean air success story.

Still, it’s not enough progress. Scotland has set the standard that the rest of the UK should follow — which will take strong leadership in the House of Commons.


The Way Forward for Clean Air, Lower Healthcare Spending, and a Thriving Economy for Britain

There are many ways to accomplish those goals and everything has its own particular cost. But two pathways jump out as the most beneficial per pound sterling.

ONE: Continue to replace coal-fired power generation with any other power generator. Yes, everything else burns cleaner than coal! Burning home heating fuel is cleaner than coal. Natural gas-fired power generation can be up to 1-million times cleaner than burning some grades of brown coal. Even upgrading coal-fired power generation from brown coal ‘lignite’ fuel to black coal ‘anthracite’ fuel results in astonishing improvements in air quality.

Fortunately, this is the (unevenly applied) default in the United Kingdom, which, when combined with the solid and thoughtful policies of Scotland and Wales, results in cleaner air, lower healthcare costs, and boosts economic growth via lower energy prices.

Record UK wind generation lowers electricity prices (Power Engineering)

TWO: In addition to everything mentioned above, the other low-hanging fruit leading towards cleaner air, to lower healthcare spending, and to boost economic output (by lowering energy costs) is via energy-efficiency.

Prime Minister Theresa May should recognize that no matter how cleanly we can generate one GigaWatt of electricity — energy-efficiency savings (demand reduction) that are equal to one GigaWatt are many times cleaner — and energy-efficiency improvements are typically simple and cost-effective.

Imagine a UK government policy that lowers primary energy consumption (demand) by 30% across-the-board over the next 5-years.

That’s possible with the right policy, and infinitely cheaper than adding the exact same amount of energy production capacity to the grid.

Cheaper, by orders of magnitude. In fact, the Hinkley Point C nuclear power plant construction could be cancelled AND other proposed power plant projects could be shelved for at least a decade with that much efficiency added to the grid.

Simple programmes get the best results

If the UK government added an energy-efficiency programme shared between three government entities, costs and (importantly) accolades would be shared.

The Department of Energy & Climate Change, the Secretary of State for Business, Energy and Industrial Strategy, and the Department for Communities and Local Government, would gain support from voters and expats by supporting a national energy-efficiency programme consisting of a £100 per capita credit on energy-saving electronics and materials.

For a business that employs 5 people, that’s a one-time credit of (up to) £500 towards energy-efficiency at that business, which will buy A TON of efficiency and thereby lower energy consumption/energy bills for that company.

All else being equal; Are those business owners more likely to vote Conservative in the next election? I would have to say, Yes.

Obviously, those 5 employees also live near their workplace and use electricity at home. Therefore, they too should receive a one-time (up to) £100 per capita credit at the hardware store for the purchase of LED or other energy-saving lights, smart thermostats, weather-stripping, insulation, receptacle gaskets and other energy-saving electronics or materials.

Each of those 5 people will now save significant amounts on their monthly electricity bill.

Again, all else being equal; Are those homeowners or tenants more likely to vote Conservative in the next election? The answer is likely to be affirmative if the present government decides to save each one of them, tens or hundreds of pounds per year on their annual electricity bill.

It sounds expensive until you consider the cost of adding 30 GigaWatts to the UK grid to cover wasted energy vs. spending a much smaller amount to conserve the same amount of energy.

There is simply no comparison. Energy-efficiency wins every time, and is dirt cheap in relation to the costs of building new power generation capacity.

A £100 per capita energy-efficiency credit is the way forward for clean air, lower healthcare spending, and a thriving economy for Britain (via lower energy costs) and pound for pound, nothing else comes close to accomplishing those goals at such a comparatively low spend.

Britain’s Economy Firing on All Cylinders until 2050

by John Brian Shannon | February 10, 2017

Under the expert care of Exchequer Philip Hammond, Britain’s growth rate will outperform all developed nations until 2050

What a relief it must be for Prime Minister Theresa May that the UK economy is expected to grow strongly every year until 2050, with a growth rate that surpasses all developed nations.

Britain will grow faster than any other major advanced economy over the next three decades as the EU’s share of global output diminishes, according to PwC.

UK economic growth is predicted to outpace the US, Canada, France and Germany between 2016 and 2050, with average annual growth of 1.9pc. 

This is also double the average annual pace of growth expected in Japan and Italy. — The Telegraph

The chart below shows the average annual real GDP growth rate of G7 countries from 2016 to 2050.

Britain Infographic: UK set to outpace G7 in economic growth for decades | Statista

According to a forecast from PwC, Brexit is only going to prove a bump in the road for the UK’s economy. Even though it may take a significant financial hit as a result of it’s exit from the European Union, the UK’s economy is set to grow faster than any other major advanced economy up until 2050. PwC predicts an average annual growth of 1.9 percent over the next 30 years. That’s more than double the expected growth rate of Japan and nearly twice that of Italy.” — by Niall McCarthy | You will find more statistics at Statista

And to show where the UK ranks in terms of global GDP here is another graphic for you.

Britain Infographic: Only 5 Countries Have A Bigger GDP Than California | Statista

You will find more statistics at Statista

It seems that Brexit will barely register as an economic hiccup and that Britain’s economy will continue to thrive in a post-Brexit world — and that, after many dire reports to the contrary were published prior to, and since the June 23 2016 referendum on EU membership.

You see? The sky isn’t falling, it’s snowing. Get outside and enjoy it! The UK is going to be just fine.


Related Articles:

Free Trade or Protectionism for a Strong UK Economy?

by John Brian Shannon | January 17, 2017

Prime Minister Theresa May says that Britain must be a free trading nation to boost the UK economy and to better serve the aspirations of millions of Britons.

And Britain’s leader is correct, as history has proven that free trading nations outperform non-free-trading nations. From the seafaring Phoenicians of classical antiquity to the former British colony that became a superpower called the United States of America; Free trade and hard work have built our shared civilization, and any country that withdrew from free trade or liberalized trade agreements, consequently declined.

READ: Between Free Trade and Protectionism: Strategic Trade Policy and a Theory of Corporate Trade Demands by Helen V. Milner and David B. Yoffie | Published by MIT Press

That’s not to say that other economic practices don’t have merit, because they do. However, a group of non-free-trade nations will always be surpassed by a comparable group of free trade nations — due to the symbiotic nature of free trading relationships which produce small but measurable amounts of synergy that accumulate over time.

It’s the easier access to raw materials, the lower labour costs, and the ability to access larger export markets that make free trade work so well, but the ‘icing on the cake’ is the synergy produced by the symbiotic relationships which aggregate and thereby increase corporate profits and investor dividends that are often reinvested in the growing corporation. Over time, all this synergistic activity results in far greater outcomes than otherwise would’ve been the case.

Britain economy.

The British Empire in all it’s glory was built on free trade with many partners, but in 2017 it’s even more important for Britain to be a free trading nation.


A perceived problem occurs when vast disparities are present, such as when one nation is blessed with abundant raw resources allowing it to basically dig money out of the ground which eventually accumulates into billions or even trillions of dollars, while another country in the same trading bloc may have few natural resources.

As long as all partners within the trading bloc have equal access to those raw resources, such problems are likely to be nothing more than minor jealousies.

Countries like the United States, Canada, Norway, Saudi Arabia and the United Arab Emirates have vast petroleum reserves, and importantly, good economic stewardship — which allowed them both rapid growth for the economy and a high standard of living for their citizens. It’s telling to note they are free trading nations — while other countries blessed with large petroleum reserves but restrictive international trading arrangements, haven’t prospered. Venezuela (the country with the world’s largest proved oil reserves) along with Libya and Nigeria, have poorer development due to their historically somewhat less than free trade practices. For economists, those nations serve as a warning to politicians considering the adoption of less liberal trade policies or outright protectionism.

Such disparities between nations, unless handled carefully, can result in explosive economic and political consequences.

READ: What does Free Trade mean? | Investopedia


Globalization: Lower-priced goods, but fewer jobs

It’s easy for some to forget that free trade and globalization are two different things. Free trade relates to the removal of tariffs, or at least the standardization of low tariff rates between member nations of the same trading bloc, while globalization refers to a highly interconnected political and economic world of which trade of any kind, whether free or not, is merely part of a large picture.

Those who feel left behind by globalization (and there are millions) tend to blame free trade, when in fact it was free trade that created a booming global economy from 1982 through 2007 (and a somewhat less booming economy) from 2012 through 2016.

Led by global elites, the rush to create high growth and high GDP meant that quality of life fell steeply for millions of Westerners for the first time since WWII due to the offshoring of Western jobs to countries with lower labour costs and non-existent environmental regulations.

Britain must ensure that globalization and free trade work for everyone.

Britain must ensure that globalization and free trade work for every Commonwealth citizen.

READ: You Can’t Feed a Family With G.D.P. | New York Times


It’s Not All Bad

Westerners have enjoyed unprecedented low-cost, quality goods manufactured in other countries.

Two examples of this are; 1) the Apple iPhone, which, if manufactured in the United States would have cost $2800. each, instead of the typical $650.-$950. price range. The iPhone wouldn’t have ever seen production if it hadn’t been manufactured in Asia. Over one billion have been sold since the first iPhone hit the market. And; 2) almost every computer chip in the world was manufactured in Taiwan, an industrious country with a very diligent workforce, but few natural resources. Computer chips have cost an average of $40. since Taiwan’s entry into the semi-conductor business, but if manufactured in the United States those chips would’ve cost hundreds of dollars each.

While low-cost goods are welcome in the West, people in the bottom quintiles now wish for a return to high paying employment and would gladly forego low-priced goods.

Which is exactly what the election of Donald Trump is all about. ‘Cheap goods are great, but we’d rather have jobs!’ — seems to be the main message there.

It’s difficult to blame those who harbour such resentments when 3/5ths of the population are doing less well, while only 2/5ths feel they have progressed in recent years.

Yet to blame the very free trade agreements that brought wealth to Western nations displays a lack of understanding of how globalization works vs. how free trade agreements work.

Free trade creates additional economic activity (with many virtuous cycles, which are always a good thing) while unrestricted globalization (under existing personal tax laws) rewards the top-two quintiles at the expense of the bottom-three quintiles. And it’s this fundamental misunderstanding which have people in an anti-free-trade mood — when instead, they should be protesting against global elites, unfettered globalization, and crass-and-uncaring politicians.

Had the global elites applied as much effort to ensuring that globalization worked for every economic quintile instead of the top-two quintiles exclusively, movements such as Occupy Wall Street along with the general disenchantment voiced by the public against politicians and economists wouldn’t have materialized. Ever.

When it works for everyone, there’s no complaining.

READ: In Defense of Globalization | Project Syndicate


Free Trade with a Standardized and Reciprocal Tariff Regime – Instead of Unfettered Globalization

PM Theresa May and Chancellor Philip Hammond should work to obtain a mutually-beneficial free trade agreement between all Commonwealth countries as part of a Tier 1 trade accord.

Such an agreement should ensure there are no tariffs, levies, nor other trade impediments — save for a highly standardized and reciprocal 5% tariff on all goods — except books (in any form) or those medicines that actually save lives, because principles do matter. A more educated and healthier Commonwealth are desirable outcomes. No VAT taxes or tariffs should be levied on books or life-saving medicines, ever. Anywhere on the planet, IMHO.

Why the 5% Tariff?

What the 5% tariff would do for all signatory countries is to pay for upgraded port facilities and enhanced security at ports, railways, and for cargo ships at sea.

Why the 10% Tariff?

A Tier 2 trade accord should be negotiated with nations that aren’t Commonwealth members with a standardized and reciprocal tariff of 10% — except for books and life-saving medicines which should be tariff-free and VAT-free in every case. As long as the trade partners agree to standardized and reciprocal tariffs, such tariffs won’t break WTO tariff rules. And such revenue could enhance port security, of course, but could also be used to pay for additional infrastructure programmes to put millions of workers back on the job.

Why the 25% Tariff?

Finally, a Tier 3 trading scheme could be created for those nations that won’t agree to a standardized list of tariffable items at a standardized and reciprocal rate, and won’t agree to not tariff books and life-saving medicines, and that tariff could be 25% on all imported items until the day arrives that country begins to abide by the Tier 2 trading rules.

In all three scenarios it puts the UK government firmly in the drivers’ seat in regards to imported goods and guides UK trading partners towards Tier 2, or even Tier 1 status.

The goal is to arrive at a situation whereby every nation willingly decides to join The Commonwealth in order to gain free trading status with the Commonwealth and agrees to a nominal, standardized, and reciprocal 5% tariff regime on every good except books and life-saving medicines.

It is still free trade, but with a nominal, built-in tariff designed to enhance port facilities and streamline security in all partner nations.


What to do with the revenue generated by such tariffs?

The main point is to upgrade existing port facilities, to increase security at Britain’s ports, and at reciprocal trade partner ports to ensure the security of ships at sea and the thousands of kilometres of rail lines that carry freight.

Any remaining tariff revenue could be used to soften the economic blows to those in the bottom-two quintiles who have suffered quite enough over the past 16 years.

Whether used to boost social welfare rates (good) or to boost national infrastructure spending (better) or both (best) it will be money well spent, and it would be revenue that arrived in the government hand via imported goods.

Which seems fitting, doesn’t it?

READ: Interview with Theresa May, Prime Minister of the UK, from the World Economic Forum 2017 | CNBC