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In France, state spending is a massive 58pc of GDP, while the US, even with President’s Biden’s huge increases in welfare payments and industrial subsidies is still only at 36pc. A country which has usually been closer to Washington than Paris is now starting to drift the other way.
This is happening across the economy. As Tuesday’s shocking figures for public borrowing showed, even with punishing tax rises the government is still nowhere close to balancing the books, with a deficit running at 4.4pc of GDP compared with 5.5pc for our neighbour. And of course, growth is miserable.
France is expected to expand by only 0.7pc this year, on IMF forecasts, while the UK will only manage 0.5pc. The USA, on the other hand, is projected to roar ahead at 2.7pc.
The problem is that while we’re increasingly mimicking the French public spending strategy, we don’t seem to get anything like the same results. If you are going to have a huge, intrusive state – and of course at least a few of us would prefer that we didn’t – then at least you might as well have the French version.
For all its faults, it certainly seems to have one redeeming feature. It is effective. On almost any measure you care to look at the French government machine easily outperforms the British one.
Such as? France has a far better health system, combining social insurance with state provision, and while the French are angry that average waiting times to see a GP have risen from four days before the pandemic to 10 that is far better than this country, where the waiting time for a routine appointment is 19 days, if you can get to see a doctor at all.
We have huge levels of government spending. We have punitive taxes. The state micro-manages the economy, offering lavish levels of welfare, while constantly racking up more and more debt.
True, we don’t have a boulangerie on every corner, and we don’t have riots every weekend – or at least, not yet. But in almost every other way, however, as Indermit Gill, the chief economist of the World Bank, pointed out this week, the British economy has slowly turned into a French tribute act.
There is just one catch. While France at least gets results from its sprawling state, the UK seems to get almost nothing. We face a fate far worse than our neighbour on the other side of the Channel – French levels of tax and debt, combined with practically third-world levels of investment and public services.
It is one of the ironies of the last half decade that instead of turning into Singapore on Thames or mimicking American dynamism after leaving the European Union, the UK has turned into France instead.
As Gill put it, “the country that used to be most like the United States in all of Europe was the UK. And you guys decided to go and become a lot more like continental Europe. You look like France, not like the US.”
UK economy is turning into a French tribute act – without any of the hits
Matthew Lynn
24 April 2024 • 6:00am
Matthew Lynn
4
Sunak Macron
While France at least gets results from its sprawling state, the UK seems to get almost nothing Credit: Simon Dawson/No 10 Downing Street
We have huge levels of government spending. We have punitive taxes. The state micro-manages the economy, offering lavish levels of welfare, while constantly racking up more and more debt.
True, we don’t have a boulangerie on every corner, and we don’t have riots every weekend – or at least, not yet. But in almost every other way, however, as Indermit Gill, the chief economist of the World Bank, pointed out this week, the British economy has slowly turned into a French tribute act.
There is just one catch. While France at least gets results from its sprawling state, the UK seems to get almost nothing. We face a fate far worse than our neighbour on the other side of the Channel – French levels of tax and debt, combined with practically third-world levels of investment and public services.
It is one of the ironies of the last half decade that instead of turning into Singapore on Thames or mimicking American dynamism after leaving the European Union, the UK has turned into France instead.
As Gill put it, “the country that used to be most like the United States in all of Europe was the UK. And you guys decided to go and become a lot more like continental Europe. You look like France, not like the US.”
It’s hard to disagree. Public spending in the UK rose from 39pc of GDP in 2019 to 50pc during the pandemic, and it has now settled at 44pc.
Telegraph paywall.
Aying up for the bills. £87 billion a year – by the start of 2030 for defence, decarbonization of the grid will cost a few billions, where will they get all this money? Big deficits, more and more debt, growth almost non-existant....The tanks will drive with solar panels i guess....If we as civilians would be spending like Governments, we would 've been bankrupt decades ago.
https://www.telegraph.co.uk/business/2024/04/24/britain-faces-a-fate-much-worse-than-france/
Labour will have to deal with p
The pressure is building on this unfair Tax grab
Labour will have to deal with it somehow as reality bites back.
A court challenge must be coming
Serica’s Chairman is quite right of course but he’ll have his comments slapped back at him by announcing the maintaining of dividend and commencement of buybacks. It’s a no win situation other than for the UK Treasury .
SQZ results open with a sizzler:
“ Commenting on the results, David Latin, Serica's Chairman and incoming Interim CEO, stated:
"I am very pleased that Serica has delivered a strong set of results for 2023 despite significantly lower sales prices compared to 2022 and a full year of the UK marginal tax rate being at 75%. Any 'windfall' due to high commodity prices has long gone and the high tax situation is ill-suited to a mature oil and gas basin such as the UK North Sea. Its continuation will not benefit people in the UK either financially or environmentally.”
SQZ, announced results today and also announced a 15M share buyback which starts today. Not sure why ENQ has still to pull the trigger on these.
Enquest over 16p tomorrow
Who took that 600k print today? Saw baron investments say he’d topped up. Or could be start of buybacks
Nm
Exxon has a market cap of $476bn on FCF of $36bn in 2023. Enquest has a market cap of $375m on FCF of $300m in 2023. The market cap of Exxon is 1269 times greater than Enquest and yet its FCF is (only) 120 times the size. If Enquest enjoyed the same ratio of market cap to FCF it would have a valuation of $3.965 bn. I would not mind so much if Exxon had greater growth prospects. But it does not. FCF in the end is all that matters. That is money that is available for distribution to share holders. Either Exxon is absurdly overvalued or Enquest is absurdly undervalued or both.
Both up 100 points today. 100.50 to 101.50.
It takes size to move it that much imo and these are professionals. A very good indicator. They hear stuff before us. They've made money with dividend and a capital appreciation. They're in no hurry for the exit.
I wonder if our stock on loan has decreased over the last month or so.
Where are these buy backs - we need them - O&G dropping fast
I Spoke too soon
Looks like the new energy sector is being part funded by the old oil and gas industry perhaps we should pat ourselves on the back eco warriors and didn’t know it. As long as I make a few bob I can live with that.
Hi Frac, that's why I love a webcast or an AGM. You see the body language or when someone is really interested. You could see that it had alerted LK's political sniffer dog reaction. That will be filed for a later programme. 'Over-ambitious' is political speak for 'we got it wrong' or 'we won't get it past the public'. Labour will do the same regarding 2030. I'm sending off missives about the NEW 9X (2X onshore, 3X solar, 4X offshore).
This is interesting: https://www.pressandjournal.co.uk/fp/news/aberdeen-aberdeenshire/6440359/peterhead-windfarm-approved/
In the last auction that got anywhere (AR4) the strike price for floating offshore was £87.30 against plain offshore £37.35. The subsidy or strike price needed for the Peterhead windfarm isn't mentioned in the article. We know offshore has shot up so there won't be any surprises when the numbers required are published and the amount of 'revenue support' which is paid by all of us.
Brent seems to be reversing some of the losses made last week.
Everyone waiting patiently for Buybacks to start lol
Thanks, Therapist, I’d missed that when Mod posted it. It is reassuring to know EnQuest has direct and high quality input into OEUK, and now mainly from the smaller companies operating in the UKCS. ( Brindex seems to have become fairly non-consequential.)
R , seems Lk’s statement on SNP politically misforcasting their targets is a set up for Labour next year … as we all know you can’t magic said#s of turbines and panels in 5 years !! Empty rhetoric that’s being stored rotting to be thrown once Labour are in the stocks !
Hi Therapist, had posted that on the 16th of April, 16:38, but bis repetita placent.
Hope the censorship comitee approves.
Hi,
I thought Steve was formidable on the latest FY results presentation. Now been sent in to play with the big boys. Politic in action.
https://oeuk.org.uk/oeuk-strengthens-board-with-three-new-appointments/
GLAXXX
Hit a rich vein there Tigar.