• The purpose of the the Economic Policy Centre (EPC) is to promote high quality research and debate across all areas of economics in a free democratic society.
    The EPC's vision is to close the gap between economic policy and knowledge. Ultimately it brings together economic opinion formers - in academia, business, the media and government - in new and innovative ways.

  • SPACE: Britain’s New Frontier – a new paper from the EPC

    September 27th, 2010

    SPACE: Britain’s New Frontier

    Download here.

    Britain faces an historic opportunity to be a major player in space and the government must rise to the challenge.

    The EPC is the first British think tank to take a hard look at UK Space Policy and has found it wanting. Author, Jim Bennett, a space expert with over 30 years of experience at the highest practical and policy levels calls for radical redirection and a step change in political vision so that the UK can take a commanding position in the New Space Race.
    Unlike the previous Space Race, dominated by state-owned entities, a new private sector is emerging which may be dominated by suborbital flight, led by Virgin Galactic who have yet to commit to a spaceport in the UK.
    Whilst explaining the trajectory of the UK’s underperformance in Space which started with the implementation of the 1875 Explosives Act which prevented crucial rocket experimentation in the 1930s, the paper explains the genesis of the UK’s still significant niches (like satellite insurance and design) in the global space industry and  makes the following policy recommendations;

    Policy Recommendations:

    1. The UK should broaden its cooperative perspective beyond Europe – 75% of funds are currently allocated to the European Space Agency.

    2. The new UKSA must seek to take advantage of NASA’s international cooperative programmes which the UK has failed to do in the past

    3. The Commonwealth States – Australia, Canada and India – all have areas of space expertise which the UK could successfully cooperate on.

    4. Therefore the UK should aim to cooperate with Canada which has expertise in radar imaging satellites

    5. And with Australia which has extensive launch ranges

    6. As well as with India which has across the board capabilities including launch vehicles, satellites and now interplanetary probes

    7. The UKSA should send key personnel to Ottawa for an extended stay at the Canadian Space Agency to study what a small-to-medium scale agency can accomplish

    8. The UK should explore collaboration with Canada and Australia on dual-use (civil and military) space technologies and systems like communications and earth observations satellites to leverage UK defence investments in space and the high level of trust of the USA on technology-export issues

    9. The UK should seek to learn and copy from the Isle of Man’s favourable operating environment for space commerce

    10. The UK should seek to develop a civil regulatory framework for spaceflight and space activity that attracts capital from all round the world

    11. The UK should seek to actively earn from the USA’s deep experience of licensing launch sites and spaceports with a view to the future licensing of sites like Lossiemouth in Scotland

    Says author, Jim Bennett;
    Britain faces an historic opportunity to be a major player in space and the government must rise to the challenge

    You don’t need Astronauts to have a successful space programme. The New Space environment now offers British entrepreneurs, financiers and scientists to take a seat at the main table on their own terms”.Bennett also says that the UK is failing to exploit its connections with the USA and the Commonwealth to advance its own space programme;

    “Britain has networks of close ties, experiences, and mutual trust not just in one direction, but in three: Europe, the USA, and the Commonwealth. It should seek to maintain its existing productive ties with Europe, exploit the ease of business between the US and Britain to develop New Space entrepreneurship, and enhance its cooperation with the often-underestimated capabilities of Canada, Australia, and India”.

    Quangos, outsourcing and the future of public services

    September 26th, 2010

    Once again quangos were in the news because of a leaked list of 177 which are facing the axe. The surprise is that no one seems to have noticed that it’s missing the Strategic Health Authorities (28) and the Primary Care Trusts (303). And yes they are quangos,  as they were listed in the 2005/06 Public Bodies Report , the last serious attempt by the Cabinet Office to keep track of the quangocracy. So I’ll be making this point and others in the Yorkshire Post tomorrow. When you understand the scale of the SHA and PCT budgets being taken over by GPs, it quickly becomes obvious that this  is by far the most significant quango cull of all.

    Anyway, interviewed by Jane Hill on BBC News TV earlier this this week, I argued that there’s plenty of scope for the outsourcing of public services provided by these public bodies.  So news that Suffolk County Council plans to outsource most of its services points to what could start to happen at the Central government level.

    On Greenland’s diversified future . . .

    September 26th, 2010

    Earlier this week I was interviewed on Al-Jazeera English about the discovery of gas just off the coast of Greenland by Cairn Energy. As is always the case, whenever there’s a new hydrocarbon find, there is a great deal of excitement which all too often turns out to be unjustified. So I urged some caution mentioning that it can be up to 10 years before oil discovery and bringing it to market.  And I daresay a great deal of the oil’s exploitation depends on high prices – which should not be seen as a given.

    That said, I couldn’t help but laugh when I found out how unpopular Greenpeace is in Greenland. The route cause of this is their opposition to seal-hunting which pretty much shut down one of their two export industries – seal furs. So I’m not surprised they’re not getting a good reception this time round.  And let’s face it, Greenlanders aren’t the sort of people to care what outsiders think of them – they are the only territory to have joined and left the European Union. I can just see Brussels Eurocrats choking on the audacity of that one !

    Right now, the biggest industry in Greenland is prawn processing – so it’s only natural they’d want some diversity away from that.

    Is the breakup of the Euro fast approaching?

    September 21st, 2010

    It has been 6 months since I showed in chart form here, sales the credit default swap spreads over 5 years for Germany, the UK and the PIIGS. Then I was arguing that the UK was absolutely not in danger of default and it seems that events have borne that out.  Well clearly, for the other countries quite a lot has happened since then – just take a look at this;

    So Greece – particularly, Ireland and Portugal are all considerably worse.  The UK has tentatively improved its position vis a vis Germany and Spain because of the sheer scale of the country compared to the other minnows, is one still to keep a close eye on.

    One city expert tells me that because the EU/IMF aid package is in place for Greece and on-hand for Ireland and Portugal, default is not yet on the cards.  That certainly makes eminent sense. And yet, writing yesterday in Critical Reaction, Tim Congdon says in PIGS to the Slaughter? that the two key facts emerging are;

    1. The PIGS’ banking systems have not – so far – been able to repay their ECB borrowings. If the banking systems are eventually unable to repay the loans, the ECB will suffer a loss.

    2. The ECB has already incurred losses on the bonds it bought in May, because of the adverse yield movements already noticed.

    These issues are bound to be raised by the five German professors who are testing the legality of the May support package for Greece at the German Constitutional Court. The losses that the ECB is now taking on its interventions to help the PIGS undoubtedly constitute a breach of the no bailout clause of the 1992 Maastricht Treaty. If words have any definite meaning, the German Constitutional Court must deem the ECB’s actions and the Greek rescue inconsistent with that treaty and therefore illegal. The Eurozone remains in great trouble.

    On the UK’s Defence Budget – it’s not the kit, it’s the other budgets

    September 11th, 2010

    I’ve had an enormous amount of feedback from my piece in the Yorkshire Post arguing for maintaining Trident and building the Aircraft Carriers.  Not all of it positive of course, but it was very nice to receive a few very appreciative notes from very senior military types. So as an area I like to pay close attention to, I savoured this piece in this week’s Economist.

    I think this chart of theirs sums up the problem very clearly.

    The Defence budget is not really constrained because of Eurofighter, Trident, Aircraft Carriers or even Iraq or Afghanistan. It has been held back to pay for Health, Education and Welfare (the last not shown) all spending on which have all increased massively since the late 80s and particularly since 2000.

    On forecasting private sector job creation . . . by 2024

    September 11th, 2010

    A very troubling analysis by the TUC which says that if private sector companies continued to create jobs at the same rate as they have over the past decade, it would take 14 years before the country could make up for jobs lost during the recession.

    I hope they’re wrong.

    I also remember an argument that was put forward during the 1992 recession that each recession creates additional long-term employed, thus creating a much higher natural unemployment rate. The UK was supposed to come out of that recession with full employment translating into a 9% unemployment rate. It didn’t happen.

    I know that too many of us have been far too optimistic but forecasting any further than 18 months out is fiendishly inaccurate. I daresay 2024 will be a quite radically different economy to the one we have today.