Sam Alvis

New piece on Chinese tech investment in Europe — fittingly out the day the Commission publishes the Industrial Accelerator Act, kicking off months of legislative wrangling.

A look at the data and recent cases shows Europe has learned to block Chinese takeovers of tech & semiconductor assets.

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No, the public is not irredeemably ignorant But there is a disconnect between economists’ metrics and people’s perceptions

@sarahoconnorft.ft.com ‘s piece the other day was excellent on this. The public are more than happy to tell you what they are concerned about!

www.ft.com/content/320c... No, the public is not irredeemably ignorant

Won't forget the thing a Biden official told me for our @ippr.org post-mortem

"We did not test [deliverism] because we didn’t deliver the things they asked for. If you give your kid a toy train at Christmas and he wanted a plane, he’s not going to say thank you"

www.ippr.org/articles/its...

Feels like Sunak's March 2020 budget, fear we will be back here soon - and principally because of energy.

As eg @acjsissons.bsky.social has written there isn't a lot you can do here

4 policy buckets, all cost £, but budget policies had a material consumer impact and reduce inflation expectations:

A war on bills: Why the government should focus relentlessly on the cost of living | IPPR The autumn budget is the government’s chance to respond with attention-grabbing policies, showing it will be fighting on side of the consumer consistently

3. Remainder of policy costs: take that last 25% of RO into general taxation.

4. If you need targeted support the Warm Home Discount now goes to all means tested benefit, that can be boosted (but currently is a levy on bills..)

Background in @ipprof.bsky.social's blog www.ippr.org/articles/a-w...

2. Direct household protections. The warm homes plan is building mechanisms to get people tech. Expand household eligibility for these - with a focus on solar + batteries or EVs. This removes people from effects of the price cap. Flex is going to matter!

1. Don't make things worse: we're still adding innovation spending to bills. CCUS levies should be direct govt spending - not least with new financial transactions.

Network operators are making significant unearned profit already. Worth reviewing the clawback of unspent capital.

Feels like Sunak's March 2020 budget, fear we will be back here soon - and principally because of energy.

As eg @acjsissons.bsky.social has written there isn't a lot you can do here

4 policy buckets, all cost £, but budget policies had a material consumer impact and reduce inflation expectations:

But govt was different they couldn’t identify the fight they wanted to pick but also didn’t want think you could target who benefits ie only a majority. Which I think stands in contrast to Winter Fuel Payments where clearly ‘delivery’ of an outcome for one group has wider resonance

A war on bills: Why the government should focus relentlessly on the cost of living | IPPR The autumn budget is the government’s chance to respond with attention-grabbing policies, showing it will be fighting on side of the consumer consistently

Well that’s where @ippr.org are. There is not a huge amount you can do on CoL without significant expenditure - at least the for the majority. So how (through policy and comms) you signal who you’re for (the public) and against (excessive profit?) is vital

www.ippr.org/articles/a-w...

What was interesting about govt on cost of living is that they both wanted a campaign that was 'post-deliverism' about govt fighting for them AND thought unless a majority of households were benefitting by several hundred ££s then any policy would be counter-productive 'we didn't do enough'

Won't forget the thing a Biden official told me for our @ippr.org post-mortem

"We did not test [deliverism] because we didn’t deliver the things they asked for. If you give your kid a toy train at Christmas and he wanted a plane, he’s not going to say thank you"

www.ippr.org/articles/its...

What can governments do about the cost of living? The cost of living has become a defining political issue. But there is little governments can do once cost of living crises have begun…

It's far too early to say what's going to happen to oil and gas prices, but there is at least a chance we will be in for another cost of living shock.
So here is my old piece on what governments can do about cost of living crises. The answer is depressing I'm afraid: not very much in the short term

Spot prices now at their highest level since January 2023. But still less than a quarter of peak 2022

You can't even build Potemkin villages any more because of stakeholders

This seems unnecessarily contrarian. Sure the cost of capital for renewables rises a bit, but the cost of 1-month gas futures just rose *50%*. Of course people will build more renewables, and more batteries.

Does the Conservative leadership know the difference between Sunni and Shia do we think

This is gunna age fast. Qatari shutdown (30% of UK imports) sending prices up fast

What just happened?

Prices going exponential as per Russia/Ukraine circa 2021.

Now up 45% today, the jump from ~28% higher from Friday, up to 45% higher happened in about 15 minutes.

Crazy stuff.

UK prices rising sharper already crossed last march

Time series are going to matter here.

EU Gas markets

Currently not close to Ukraine rises. Still less than March last year. But big jump (29%) overnight

UK - heading for another energy induced CoL shock? Maybe but not huge 🤞

1) It's at the moment an oil price issue not yet gas. We'll pay more at the pump. ~2/3 of UK oil comes from US/Norway, more expensive but not threatened.

2) Gas prices don't really track oil. 40% of UK gas is imported...

Obviously it's very early days, but will be key to use fiscal tools as much as possible to avoid (temporary) inflation shocks from global energy, if possible. We've seen elsewhere that this can pay off if the shocks are temporary.

Last thought - we need to move policy costs from bills to general taxation. Don't kneejerk as prices rises, continue on the gradual removal from electricity don't start stripping from gas as well because prices are rising. We still want to incentivise electrification (our ultimate protection)

A war on bills: Why the government should focus relentlessly on the cost of living | IPPR The autumn budget is the government’s chance to respond with attention-grabbing policies, showing it will be fighting on side of the consumer consistently

- Begin building mortgage support schemes, SMI has limited uptake and reach
- Get Warm Homes ££ out the door ASAP
- Instruct CMA to monitor generation / transmission profits now, set a baseline

Don't make the problem worse!
- Pause new bill levies like CCUS/Hydrogen

www.ippr.org/articles/a-w...

The UK gets hit by external shocks because we're open and haven't historically prepared people. Most of the CoL measures @ippr.org has talked about are for getting ahead of crises not material reductions now.

Things to explore?
- ⬆️solar/EV/battery subsidy to reduce ££ on direct energy support

.. 30% of LNG comes from Qatar. Not great but again - this isn't Ukraine for now. Increased renewable deployment clearly helping on elec but still v. exposed for heat and industry.

3) Broad based inflation and interest rates are obviously more concerning.

UK - heading for another energy induced CoL shock? Maybe but not huge 🤞

1) It's at the moment an oil price issue not yet gas. We'll pay more at the pump. ~2/3 of UK oil comes from US/Norway, more expensive but not threatened.

2) Gas prices don't really track oil. 40% of UK gas is imported...

My defence of CCUS where I say I think CCUS is bad you mean?