Anything that doesn't address the core is just tinkering:
My monologue on today’s The Times at One 1pm, live from New York:
It’s only the start of the third full day of the new Trump administration but already we can see what an economic and business threat it poses to an ailing Europe, including the UK.
And it’s about much more than tariffs.
Trump aims to consolidate America’s economic supremacy with lower taxes, cheaper energy, much less regulation.
It’s worth noting that taxes in Europe and the UK are already much higher than in America, energy is much more expensive and business far more highly regulated. That explains why America has come out of the pandemic downturn far more robustly than Europe.
Trump now wants to go faster on all three fronts, so that America pulls even further ahead of Europe than it already is.
As Europe continues to stagnate, America is poised to grow more. Multi-billion dollar investments in AI and other cutting edge technologies are being announced, reinforcing America’s clear technological lead.
It’s often thought high-tech business doesn’t consume as much power as the old heavy industries. You couldn’t be more wrong.
Data centres are fierce consumers of electricity, which is why Trump wants even cheaper energy — and why Europe and the UK, which has the highest electricity costs in the world, are struggling to attract these data centres.
Heavy industry in Europe and the UK is still being hollowed out. Not enough new stuff is replacing it.
In the UK alone chemical production is down 38% in just the past three years, cement production down 40%, electrical equipment down 50%. Either they close down because energy costs mean they can’t compete or they flee across the Atlantic, where energy costs are far cheaper.
It’s happening all across Europe.
Yet nobody in Europe is doing anything about it.
Far from cutting red tape, Brussels boasts, absurdly, that the EU is a regulatory superpower. Good luck with getting rich on that.
Far from cutting taxes, almost everywhere in Europe they are being increased, even though they’re already at record levels.
And far from reducing energy prices they continue to rise as Europe puts the huge cost of going for green energy generation onto everybody’s fuel bills.
It’s a hat trick of self-harm which Trump has spotted and intends to exploit.
In Britain Keir Starmer manfully struggles against all the legal constraints on growth and development, many exploited by his legal friends who’ve grown rich on lawfare.
He’s for the builders not the blockers, he claims. Which is good news. But I’d put my money on the blockers winning.
In Davos Rachel Reeves says she’ll look again at the tax regime for non-doms now that 11,000 millionaires and multi-millionaires left Britain in the past year alone to escape her high taxes. I suspect it’s too late to woo them back.
The punk left will say good riddance to them. They don't realise it’s Britain’s tax base walking out the door. Contrary to populist belief, our revenue base is hugely dependent on high earners.
The top 1% of earners account for 30% of income tax revenues. The top 0.1% pay over 10% of income tax revenues. If they go, everybody else will have to pay more tax.
Few in Britain realise this which is why wealth-destroying policies are so popular. It’s not a mistake made here in America, which is prepared to welcome companies escaping Europe’s anti-business climate and the high-earning, tax paying wealth creators that come with them.
By the end of this decade US business will likely be more dominant than ever. And Europe, Britain included, even more of a backwater. For the moment at least, there is nothing on the horizon to change that gloomy prognosis.
No comments:
Post a Comment