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Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

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TheMotorcycleBoy
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Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370046

Postby TheMotorcycleBoy » December 27th, 2020, 11:00 am

I've been curious about this for sometime. I even alluded to it here and here. But noone bit, perhaps because the thread was in PD? However after the recent "Brexit Deal":

State aid
The EU had insisted the UK align with its state aid rules. Brussels was concerned that the UK government would seek to find a competitive advantage through subsidies. The UK successfully killed off this idea. The UK will set up its own subsidy regime. The new domestic enforcement body can make decisions over whether state aid has distorted trade after the subsidy has been granted. This is a major concession by the EU.

However, the UK will have to ensure that its subsidy regime respects key principles set out in the treaty. The deal also allows both parties to adopt remedial measures if there is evidence that the domestic enforcement body has failed to uphold the shared principles.

from https://www.theguardian.com/politics/20 ... rexit-deal, the clearest write up I could quickly find, that wasn't behind a paywall.

I wondered whether we have gained some upside in an area of interest.

Views?
Matt

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370081

Postby Spet0789 » December 27th, 2020, 12:32 pm

I don’t see any reason to be optimistic about it. State aid has always been a way for taxpayers’ hard earned money to be wasted on propping up failing businesses with political clout.

Ignoring this past experience, The Great Oracle (aka D. Cummings) had an unshakeable belief in his own ability to pick and subsidise the winners of the future, hence this became a big objective of the negotiations.

The only other major political figure to want this was Jeremy Corbyn. State aid is a very un-Conservative policy.

Placing EU-wide restrictions on state aid was a key achievement of Mrs Thatcher.

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370095

Postby johnhemming » December 27th, 2020, 1:25 pm

There are all sorts of problems that arise when taxpayers money is invested in companies selected by the political process rather than an environment being created where the more effective companies succeed.

I think one of Boris Johnson's problems is that he thinks it is a good idea to invest funds from the public purse in selected favoured projects that should really be privately funded and identified.

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370119

Postby TheMotorcycleBoy » December 27th, 2020, 3:09 pm

Spet0789 wrote:I don’t see any reason to be optimistic about it. State aid has always been a way for taxpayers’ hard earned money to be wasted on propping up failing businesses with political clout.

......D. Cummings) had an unshakeable belief in his own ability to pick and subsidise the winners of the future, hence this became a big objective of the negotiations.

I was under the impression that

1. The hydrogen economy
2. Wind power associated assets
3. AI / Robotics

could feature. Amongst several others.

The only other major political figure to want this was Jeremy Corbyn. State aid is a very un-Conservative policy.

Placing EU-wide restrictions on state aid was a key achievement of Mrs Thatcher.

Sure. Regards Thatcher, isn't that a past legacy, which it would be foolish to adher to? Furthermore, I'm under the impression that State Aid has benefitted the Asian economy very nicely. Putting the referendum result aside, wouldn't it not be nice if the UK could have a piece of that?

Matt

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370120

Postby dspp » December 27th, 2020, 3:10 pm

TheMotorcycleBoy wrote:
Spet0789 wrote:I don’t see any reason to be optimistic about it. State aid has always been a way for taxpayers’ hard earned money to be wasted on propping up failing businesses with political clout.

......D. Cummings) had an unshakeable belief in his own ability to pick and subsidise the winners of the future, hence this became a big objective of the negotiations.

I was under the impression that

1. The hydrogen economy
2. Wind power associated assets
3. AI / Robotics

could feature. Amongst several others.

The only other major political figure to want this was Jeremy Corbyn. State aid is a very un-Conservative policy.

Placing EU-wide restrictions on state aid was a key achievement of Mrs Thatcher.

Sure. Regards Thatcher, isn't that a past legacy, which it would be foolish to adher to? Furthermore, I'm under the impression that State Aid has benefitted the Asian economy very nicely. Putting the referendum result aside, wouldn't it not be nice if the UK could have a piece of that?

Matt


hydrogen sucks ...... but Johnson's cronies would get rich pumping taxpayer pork into it ........

- dspp

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370123

Postby TheMotorcycleBoy » December 27th, 2020, 3:25 pm

Let's forget about the hydrogen economy and suggestions of cronyism if required.

Is it totally unreasonable that extra government investment in fledgling industries could be beneficial for the UK?

Matt

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370132

Postby Nimrod103 » December 27th, 2020, 3:55 pm

johnhemming wrote:There are all sorts of problems that arise when taxpayers money is invested in companies selected by the political process rather than an environment being created where the more effective companies succeed.

I think one of Boris Johnson's problems is that he thinks it is a good idea to invest funds from the public purse in selected favoured projects that should really be privately funded and identified.


So you would disagree with the current arrangements whereby the UK taxpayer is taking on all the costs of any bad outcomes of the vaccinations the Govt has backed - Pfizer, Astra Zeneca and Moderna?

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370139

Postby TheMotorcycleBoy » December 27th, 2020, 4:16 pm

dspp wrote:
TheMotorcycleBoy wrote:
Spet0789 wrote:I don’t see any reason to be optimistic about it. State aid has always been a way for taxpayers’ hard earned money to be wasted on propping up failing businesses with political clout.

......D. Cummings) had an unshakeable belief in his own ability to pick and subsidise the winners of the future, hence this became a big objective of the negotiations.

I was under the impression that

1. The hydrogen economy
2. Wind power associated assets
3. AI / Robotics

could feature. Amongst several others.

The only other major political figure to want this was Jeremy Corbyn. State aid is a very un-Conservative policy.

Placing EU-wide restrictions on state aid was a key achievement of Mrs Thatcher.

Sure. Regards Thatcher, isn't that a past legacy, which it would be foolish to adher to? Furthermore, I'm under the impression that State Aid has benefitted the Asian economy very nicely. Putting the referendum result aside, wouldn't it not be nice if the UK could have a piece of that?

Matt


hydrogen sucks ...... but Johnson's cronies would get rich pumping taxpayer pork into it ........

- dspp

Incidentally the Americans seem keen to assist firms in leveraging hydrogen into a renewable energy solution. I've not had the time to investigate the background of the firm (coincidentally called "Cummins"), however it seems like a hybrid battery/fuel cell solution, IDB.

https://www.greencarcongress.com/2020/1 ... mmins.html

Matt

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370142

Postby johnhemming » December 27th, 2020, 4:27 pm

Nimrod103 wrote:
johnhemming wrote:There are all sorts of problems that arise when taxpayers money is invested in companies selected by the political process rather than an environment being created where the more effective companies succeed.

I think one of Boris Johnson's problems is that he thinks it is a good idea to invest funds from the public purse in selected favoured projects that should really be privately funded and identified.


So you would disagree with the current arrangements whereby the UK taxpayer is taking on all the costs of any bad outcomes of the vaccinations the Govt has backed - Pfizer, Astra Zeneca and Moderna?

That is a different situation.

However, if the government decides to start "investing" in the hydrogen economy then I would not expect any return.

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370146

Postby TheMotorcycleBoy » December 27th, 2020, 4:43 pm

johnhemming wrote:
Nimrod103 wrote:
johnhemming wrote:There are all sorts of problems that arise when taxpayers money is invested in companies selected by the political process rather than an environment being created where the more effective companies succeed.

I think one of Boris Johnson's problems is that he thinks it is a good idea to invest funds from the public purse in selected favoured projects that should really be privately funded and identified.


So you would disagree with the current arrangements whereby the UK taxpayer is taking on all the costs of any bad outcomes of the vaccinations the Govt has backed - Pfizer, Astra Zeneca and Moderna?

That is a different situation.

However, if the government decides to start "investing" in the hydrogen economy then I would not expect any return.

Even if we can produce solutions which we export abroad?

e.g.
https://www.investegate.co.uk/ceres-pow ... 00086773H/
https://www.investegate.co.uk/ceres-pow ... 00074038C/

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370147

Postby Spet0789 » December 27th, 2020, 4:45 pm

johnhemming wrote:
Nimrod103 wrote:
johnhemming wrote:There are all sorts of problems that arise when taxpayers money is invested in companies selected by the political process rather than an environment being created where the more effective companies succeed.

I think one of Boris Johnson's problems is that he thinks it is a good idea to invest funds from the public purse in selected favoured projects that should really be privately funded and identified.


So you would disagree with the current arrangements whereby the UK taxpayer is taking on all the costs of any bad outcomes of the vaccinations the Govt has backed - Pfizer, Astra Zeneca and Moderna?

That is a different situation.

However, if the government decides to start "investing" in the hydrogen economy then I would not expect any return.


Completely agree. Hydrogen is a dead end technology. The idea that a modern history graduate (DCum) and a classicist (BJ) could have been making decisions on which of these technologies to back fills me with horror.

At most, the government should support R&D intensive industries with a regime of tax credits and incentives for equity provision (perhaps an institutional tech VCT-like regime for example). At least that way, the allocation of capital will still be market driven but with a government tailwind

The other thing the government should do is immediately introduce a high tech visa framework allowing our top universities and tech-intensive companies to recruit from anywhere in the world with little bureaucracy.

Btw, all these things could have been done as an EU member.

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370148

Postby Dod101 » December 27th, 2020, 5:00 pm

On the whole I think the government would be better to support research projects. I assume that a bit like spending money on advertising at least half of it is wasted but at least with research spending we can get an outcome in due course, successful or otherwise. Obviously the government has spent a lot of money subsidising green energy over the last several years and it seems to me that that is the sort of thing that subsidies should be used for. There is a clear objective, generally accepted as being desirable, and initially anyway, it would have proved to have been very difficult to let the 'hidden hand' make all the running because there was little economic incentive for it to do so. That is the trouble with leaving it all to private enterprise. It will only be interested if there is a good chance of a profit.

What we have to avoid at all costs is for instance trying to prop up a dying industry and that is where, in the past, it all went so horribly wrong, and a demonstration of that can be seen in Nicola's Scotland with the nationalisation of Prestwick Airport, the last remaining shipyard on the Lower Clyde and other stuff like that. This is a non political comment but these projects are simply throwing money at jobs for which there is no economic justification. Mind you, what is the furlough scheme doing?

Dod

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370149

Postby Dod101 » December 27th, 2020, 5:04 pm

Spet0789 wrote:Completely agree. Hydrogen is a dead end technology. The idea that a modern history graduate (DCum) and a classicist (BJ) could have been making decisions on which of these technologies to back fills me with horror.

At most, the government should support R&D intensive industries with a regime of tax credits and incentives for equity provision (perhaps an institutional tech VCT-like regime for example). At least that way, the allocation of capital will still be market driven but with a government tailwind

The other thing the government should do is immediately introduce a high tech visa framework allowing our top universities and tech-intensive companies to recruit from anywhere in the world with little bureaucracy.

Btw, all these things could have been done as an EU member.


On the whole I agree with Spet0789, although I have no idea about hydrogen technology. I was disappointed in the final comment. That sort of comment should be banned from these Boards now as being at the very least irrelevant, and possibly inflammatory.

Dod

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370151

Postby johnhemming » December 27th, 2020, 5:06 pm

TheMotorcycleBoy wrote:Even if we can produce solutions which we export abroad?

The Second Law of Thermodynamics is called a law because it always applies.

We do have tax credits for R&D up to a point.

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370157

Postby dspp » December 27th, 2020, 5:36 pm

Dod101 wrote:That sort of comment should be banned from these Boards now as being at the very least irrelevant, and possibly inflammatory.

Dod


Brace yourself for several decades of this. Remainers are now Rejoiners, and this is a democracy.

regards, dspp

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370161

Postby tjh290633 » December 27th, 2020, 5:54 pm

Dod101 wrote:
Spet0789 wrote:Completely agree. Hydrogen is a dead end technology. The idea that a modern history graduate (DCum) and a classicist (BJ) could have been making decisions on which of these technologies to back fills me with horror.

At most, the government should support R&D intensive industries with a regime of tax credits and incentives for equity provision (perhaps an institutional tech VCT-like regime for example). At least that way, the allocation of capital will still be market driven but with a government tailwind

The other thing the government should do is immediately introduce a high tech visa framework allowing our top universities and tech-intensive companies to recruit from anywhere in the world with little bureaucracy.

Btw, all these things could have been done as an EU member.


On the whole I agree with Spet0789, although I have no idea about hydrogen technology. I was disappointed in the final comment. That sort of comment should be banned from these Boards now as being at the very least irrelevant, and possibly inflammatory.

Dod

It is interesting to reminisce on the subject of electric traction. I had the pleasure of sitting next to the driver on a Tillings Stevens Petrol Electric double decker on a trip around Amberley Chalk Pits Museum. It didn't have a battery to provide traction power of course, but essentially the concept was similar to today's hybrid vehicles.

I suspect that it is battery power which is a dead end technology. A lot of dead weight to drag around and limited range. Hydrogen, on the other hand offers very long range, and is a much more convenient way of storing energy. The question is, what is the most effective way of producing hydrogen? Using renewable energy is the obvious route, as electrolysis provides not only hydrogen but also oxygen. I haven't looked at how the economics stack up compared with the current method of air separation, but I suspect that the likes of BOC, L'Air Liquide, Air Products, Linde, etc., might have a problem on their hands.

Government spending on research or tax benefits for commercial firms doing research are both legitimate approaches. There are plenty of precedents for both. I believe that our points based immigration system allows people with needed skills to be hired from wherever they are.

TJH

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370169

Postby johnhemming » December 27th, 2020, 6:09 pm

tjh290633 wrote:I suspect that it is battery power which is a dead end technology. A lot of dead weight to drag around and limited range. Hydrogen, on the other hand offers very long range, and is a much more convenient way of storing energy. The question is, what is the most effective way of producing hydrogen? Using renewable energy is the obvious route, as electrolysis provides not only hydrogen but also oxygen. I haven't looked at how the economics stack up compared with the current method of air separation, but I suspect that the likes of BOC, L'Air Liquide, Air Products, Linde, etc., might have a problem on their hands.

Government spending on research or tax benefits for commercial firms doing research are both legitimate approaches. There are plenty of precedents for both. I believe that our points based immigration system allows people with needed skills to be hired from wherever they are.

We come back, however, to the second law of thermodynamics. If energy is being converted from one form (say sunlight) to another (say electricity) then there is a loss of energy which for an ideal heat engine relates to the ratio in degrees absolute from the hot surface to the cold one. There can be efficiency improvements, but only up to that point.

Hence although you have an energy cost of carrying around a battery you need to compare the energy cost of splitting oxygen and hydrogen and then the energy cost of taking oxygen and hydrogen and using a fuel cell to get electricity. This will always be the limiting factor.

Putting electrical energy into a battery and getting it out also has losses.

Looking around on the net for some figures:
https://www.power-technology.com/commen ... en-economy

Efficiency of hydrogen to electricity in fuel cell: 60%

https://www.carboncommentary.com/blog/2 ... on-economy

Electrolysis efficiency 80%.

(so we are now at 48%).

https://www.tesla.com/sites/default/fil ... merica.pdf

Battery round trip efficiency 90%

There are energy costs of carrying the battery around, but also energy costs of moving around hydrogen.

In the end Hydrogen as a power storage medium only really works in very limited circumstances.

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370175

Postby Spet0789 » December 27th, 2020, 6:38 pm

Dod101 wrote:
Spet0789 wrote:Completely agree. Hydrogen is a dead end technology. The idea that a modern history graduate (DCum) and a classicist (BJ) could have been making decisions on which of these technologies to back fills me with horror.

At most, the government should support R&D intensive industries with a regime of tax credits and incentives for equity provision (perhaps an institutional tech VCT-like regime for example). At least that way, the allocation of capital will still be market driven but with a government tailwind

The other thing the government should do is immediately introduce a high tech visa framework allowing our top universities and tech-intensive companies to recruit from anywhere in the world with little bureaucracy.

Btw, all these things could have been done as an EU member.


On the whole I agree with Spet0789, although I have no idea about hydrogen technology. I was disappointed in the final comment. That sort of comment should be banned from these Boards now as being at the very least irrelevant, and possibly inflammatory.

Dod


Come on old chap - get off your high horse!

Firstly, the title of the thread referred to the "recent Brexit deal". In that context, my last comment was within the scope and completely relevant, especially when couched as a "btw". Secondly, talk of banning perfectly polite and legitimate comments from these PD boards is just daft. Finally describing my gentle reminder as inflammatory is oversensitive and frankly a bit silly.

If you've any wish to legitimately engage with my comment and argue that it was wrong. and we could have done all these sensible things (which you were kind enough to agree with) while an EU member, please feel free.

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370177

Postby Spet0789 » December 27th, 2020, 6:40 pm

johnhemming wrote:
tjh290633 wrote:I suspect that it is battery power which is a dead end technology. A lot of dead weight to drag around and limited range. Hydrogen, on the other hand offers very long range, and is a much more convenient way of storing energy. The question is, what is the most effective way of producing hydrogen? Using renewable energy is the obvious route, as electrolysis provides not only hydrogen but also oxygen. I haven't looked at how the economics stack up compared with the current method of air separation, but I suspect that the likes of BOC, L'Air Liquide, Air Products, Linde, etc., might have a problem on their hands.

Government spending on research or tax benefits for commercial firms doing research are both legitimate approaches. There are plenty of precedents for both. I believe that our points based immigration system allows people with needed skills to be hired from wherever they are.

We come back, however, to the second law of thermodynamics. If energy is being converted from one form (say sunlight) to another (say electricity) then there is a loss of energy which for an ideal heat engine relates to the ratio in degrees absolute from the hot surface to the cold one. There can be efficiency improvements, but only up to that point.

Hence although you have an energy cost of carrying around a battery you need to compare the energy cost of splitting oxygen and hydrogen and then the energy cost of taking oxygen and hydrogen and using a fuel cell to get electricity. This will always be the limiting factor.

Putting electrical energy into a battery and getting it out also has losses.

Looking around on the net for some figures:
https://www.power-technology.com/commen ... en-economy

Efficiency of hydrogen to electricity in fuel cell: 60%

https://www.carboncommentary.com/blog/2 ... on-economy

Electrolysis efficiency 80%.

(so we are now at 48%).

https://www.tesla.com/sites/default/fil ... merica.pdf

Battery round trip efficiency 90%

There are energy costs of carrying the battery around, but also energy costs of moving around hydrogen.

In the end Hydrogen as a power storage medium only really works in very limited circumstances.


I completely agree.

Even a storage mechanism, hydrogen is poor. It's impossible to make a hydrogen tank leak-proof. Leave your hydrogen powered car with a full tank of fuel at the airport, come back in two weeks to an empty tank.

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Re: Will the State Aid rules forged in the recent Brexit deal boost UK PLC Ltd?

#370183

Postby johnhemming » December 27th, 2020, 6:58 pm

ReallyVeryFoolish wrote:Furthermore, I have direct real life experience of generating hydrogen as an industrial gas from electrolysis processes. Guess what usually happens to the oxygen produced in those hydrogen generation plants?

There's a very, very long way to go before hydrogen becomes anything like a mainstream energy storage medium. I doubt I will see it in my lifetime.


The "Hydrogen Economy" is a very good example as to why Boris Johnson and Dominic Cummings should not be involved in picking winners.

I was for some years on the Economic Development Committee of Birmingham City Council which did provide some financial support for selected businesses. I have not seen anything to encourage me to want to see more of it. At the same time I ran my own hi tech business without any direct support from the state. I can see merit in creating an environment which encourages entrepreneurial activity, but not one where politicians (even with my level of experience) make the decisions as to who to support.

Boris, however, sees it as an opportunity to lead the world and thinks in terms of what sort of persuasive articles he could write to persuade people of the merits of the Hydrogen Economy.


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