On the autumn statement 2026

Rachel Reeves in front of No 10/1 with a red box

A quick note on the budget, remembering I wasn’t as critical of last year’s as some, at least not on macro-economic grounds. I was obviously against the failure to abolish the two child cap, but also against the failure to properly fund universities, students, and local government.

So this budget is, to me, a bit meh and I agree with Fisher, why wait for a year? Still nothing on HE or Local Government finance, and the wealth taxation is very weak and poorly focused. No capital gains tax equalisation, no financial transaction tax.

The freezing of tax free allowance amounts is probably more damaging to those on the margin of the upper rate tax band but as I read it, it’s a piece of accounting magic. There were no plans to change it for the next two tax years anyway, and they can change their minds, although some of the impact will occur after the next election.

Also the FT reports that leading business people consider it insufficiently stimulating of growth, which in their case is probably not code for, “We need to rejoin the single market and customs union.”, although there are many, including me and Liz Webster, that are saying so; our macro-economic arguments recently augmented by a report from the US non-partisan National Bureau of Economic Research and by Ryan Bourne’s recanting of his pro-Brexit position.


Image Credit: from freemalaysiatoday cc 2024 by …

About the AI Boom

an AI chip on a board

Five things

  1. There’s no positive business model, they can’t replace staff, or at least not without new supervisors.
  2. They are now borrowing to invest in each other.
  3. Hallucinations are a feature, it gets things wrong,
  4. The rule base’s ownership is obscure and Code is Law
  5. It’s [deliberately] wasteful of resources which people need to live.

It’s useless as a pillar of a growth/industrial policy. …

The downsides of the A.I. industry.

Karen Hao in front of a book shelf

I have recently, watched the YouTube video, “How tech CEOs are lying to you”, where Karen Hao is interviewed by  Aaron Bastani on Novara Media's channel. Ms Hao has just published a book, “Empire of AI” and the interview covers the topics of the book.

At the centre of her arguments are, that large language modules aka AI, and their use of resources, water, power, land and rare metals are a choice, and one that society cannot afford. She questions the business model of the AI industry, sees it as a threat to [US] wealth and notes its scofflaw approach to its own regulation and its oppression of poor and vulnerable communities. She is highly critical of the motivations of the oligarchs funding the AI bubble.

The remainder of this article, which is over 2000 words is overleaf, use the "Read More" button ....

How much has Brexit cost us?

Reuters Square, if its still called that in black and white.

While posting my notes on my reference back for Labour Conference I fell back on the OBR statistic that Brexit had cost the UK 4% of GDP. I thought a chart would have been helpful and so went looking for one.

The NIESR published an article, Revisiting the effects of Brexit, which now they’ve archived it, no longer has the chart they made from the model, but google search can still find it today.

Their model tries to disentangle the effects of the COVID slump, and the article, dated 2023, says,

These estimates suggest that Brexit had already reduced UK real GDP relative to the baseline by just under one per cent in 2020 as consumers and businesses adapted their expectations even before the TCA came into force. Our estimates further suggest that three years after the transition period, UK real GDP is some 2-3 per cent lower due to Brexit, compared to a scenario where the United Kingdom retained EU membership.

 …

On the necessary regulation of AI

a robot issuing a parking ticket, generated by deepai.org

I wrote a piece for Chartist on AI & its regulation, which I have signposted on LInkedin. I look at its likely macro-economic effects and the essential defence of Article 22 of the GDPR, where I say,

… the most important defences that we as citizens, workers, and consumers have is the EU’s GDPR, which in Article 22 & Recital 71 establishes what they call a right to “freedom from profiling”. This, through the rulings of the CJEU, has become quite extensive and now prohibits such things as ‘general monitoring’, a legal protection brought forcefully to light by the French supervisory authority fining Amazon €32m for violations of the GDPR within their workforce management regime.

In the article, I talk about the problem of Authority vs Popularity, the need for open source, and source citation. I also review the need for some innovators for privacy and competitive advantage and the possible future of regulation of AI to ensure decency and accountability. I also look at the patchy European response and the paradoxical attitude of the US.

I conclude.

In summary, there are plenty of laws to ensure that AI and its owners behave decently, and in some European countries, the will and resources to enforce them, but it’s not universal. Also, there are important economic countervailing forces opposing the creation of a privately owned “Global Intellect” even if the current technology is capable of such a task.

 …

Tariffs and other trade barriers

image of the alaskan highway

Last night I watched a video about Canada raising a large toll on lorries travelling from the Lower 48 to Alaska, and it documents and forecast the impact on the fragile Alaskan economy. It reminded me of the trade barriers that the UK has put in place due to Brexit. This is potentially disastrous for Alaska, and is clearly so for the UK where today the FT reports that according to the ONS, the UK economy shrank for the second quarter in a row.

The trade to GDP rate in the UK is 63%, which seems enormous to me, but it seems to be merely above average and yet it illustrates the UK’s dependency on the rest of the world to feed itself and keep itself warm and sheltered. The US rate is 25% which is low by international comparison and may be one of the reasons that Trump can afford to be as foolish as he is with his tariff policies, noting that it’s the US consumers who ultimately pay his tariffs. Source: World Bank.

The EU flag, before castor and pollux,

But for the UK, this is another piece of evidence that the UK needs to rejoin the EU’s single market, but even if this common sense actually strikes this Labour government, I doubt that the Eire/Holland/France traffic will return to the UK. …

Brexit, reset or stall?

the staircase at Lancaster House

Last week, the UK and the EU met at the most senior levels in what the labour government has described as a reset of EU relations. As usual, the conclusions are best documented on the EU website where they published a joint communique. Certainly the results of the negotiations have changed few minds. While I consider that the best result would be if both sides walked out thinking they’d won, my feeling is that this was a draw, although no major breakthroughs occurred and a huge opportunity wasted, primarily due to the lack of vision and ambition on the part of the Labour government.

The words on defence co-operation are the most concrete, although further negotiations are required and while UK companies will be able to bid for work from the EU, HMG will have to contribute to the budget.

The relegation of words by recasting youth mobility as youth experience, illustrates the stubborn recidivism of the labour government and the fact is, that there has been no movement by the EU on creative workers’ freedom of movement.

The two sides have agreed to continue to talk about an agricultural deal, and greater cooperation in the electricity, carbon and energy markets. The agricultural deal is crucial so reducing paperwork checks both between Great Britain and the European Union and also between Great Britain and Northern Ireland.

There are several paragraphs on internal security and judicial co-operation which mention Europol but not the issue of the Charter of Fundamental Rights. The UK has for decades, under both Tory and Labour governments been reluctant to engage with the Charter and it seems remains so; the children of fascist and Stalinist societies put more faith in a basic law than parliamentary sovereignty. I am unclear that these paragraphs are anything more than aspirational.

The press release/communique makes clear that its consequential programmes and agreements build on the Withdrawal Agreement, including the Windsor Framework, and the Trade and Cooperation Agreement and require their “full, timely, and faithful implementation”. The UK still has some work to do there as the Commission are pursuing eight infringements by the UK government of the existing agreements. This is a critical red-line for the EU.

I am interested how the closer to reality and the single market the proposals are the stronger the UK commitments to dynamic alignment, the CJEU and financial contribution are; it would seem we really are joining one agency/pillar at a time.

As many commentators, not least the UK Government observe, Starmer’s redlines have not been breached but little more progress could have been expected without some compromise and £140bn worth of GDP is at stake.

If we are to consider this as a football match, it’s probably a draw. The EU have ensured the current treaties are confirmed and that any entrance to the single market includes dynamic alignment, CJEU judicial authority and financial contributions, in exchange, the UK have obtained agreement that the Commission will engage in pre-legislative consultation. This is an important breakthrough. The defence agreement is necessary, but as noted the British government will need to contribute to the European Union’s defence budget to bid for arms contracts. The rest of the agreement are statements of ambition. The section on borders and judicial cooperation, I need to read again as I am unclear of the direction all future negotiations. Any agreement satisfactory to the UK Home Office and the European Union equivalent is not likely to be satisfactory for those of us who believe that racism fuels much of the immigration control debate.

The Tories and reform claim the agreement is a betrayal of the nine year old mandate, rejoin campaigners close to the Labour leadership such as Best for Britain, the European Movement, the LME and Sadiq Khan claim it’s a step in the right direction, the FT say and I agree that,

Labour arguably wasted some of the post-election goodwill it enjoyed last year in Brussels, through the paucity of its own ambition and its manifesto red lines insisting on no return to the EU single market, customs union or freedom of movement. Its new reset at least attempts to push up to the limits of some of those red lines.

The FT EB

The Economist also state that more is needed. [Also at archive.ph.]

It’s a better result than last time when the EU told the UK to do better.

The problem is that the UK wants a Swiss style deal where they can focus on those areas of maximum benefit to the UK economy. The EU want commitment to the full acquis. Squaring this circle is probably impossible just as fixing Brexit is.

Does it make rejoining more or less likely? I suggest neither, but the problem is the current Labour leadership and its stubborn and failed pursuit of the dying Brexit voter. …