Many people have asked what People's Quantitative Easing might deliver in the short term - especially as it is now looking more likely that such a programme will be needed long before the next General Election.
As example, I note the Scottish government came up with a list of what it called shovel ready projects in 2012 when a downturn in construction suggested that real boost was needed for this sector. Alex Salmond said then (as First Minister at the time) that:
In March — at his request — I wrote to the Prime Minister outlining infrastructure projects worth £300m from the north to the south of Scotland that are ‘shovel ready' to stimulate the Scottish economy and help keep Scotland out of recession.
What were those projects? This is the list, and I would be amazed if it could not be replicated around the UK:
Ullapool Pier - Passenger access system, traffic management, new berthing dolphin and replacement linkspan, £4m
Gourock-Dunoon Pontoons £2m
Kennacraig Phase 2, £4m
A96 Threapland, £6m
A68 Pathhead to Tynehead Junction, £6m
A95 Lackgie, £4m
A702 Candymill Bend and Edmonstone Brae, £4m
A737 Head Street Roundabout, £1.5m
A876 Kincardine Bridge Refurbishment, £14m
A75 Hardgrove to Kinmount, £10m
M8 M73 M74 Motorway Improvements: Advance Public Utilities, £37.8m
Health Maintenance to ensure assets are safe, effective and person centred, £50m
Accelerating Schools for the Future — worth £30.8m
University projects worth £35m including: University of Glasgow - Centre for Virology Research; University of Dundee - Phases 2 and 3 - refurbishment of Duncan of Jordanstone; University of Abertay / Dundee College - Dundee Academy of Sport; University of Edinburgh - Centre for Humanities and Social Sciences.
Dundee Central Waterfront, £4.5m
Fife Energy Park - Site Development, £3.5m
ITREZ Technology Innovation Centre, £4m
ATOS Building - Forress Enterprise Park, £3m
Inverness Campus, £6m
Forres Enterprise Park - Extension of Roads, £2m
Forres Enterprise Park - Provide 2 Units, £3m
European Marine Science Park - Ground works, £3.5m
Creative Clyde, £1.7m
National Renewable Infrastructure Plan - Hunterston Quay Upgrade, £2m
Priority investments within Local Authority Strategic Housing Investment Plans, £15m
Clyde Gateway developments at Bridgeton Cross, Dalmarnock Cross, Rutherglen and Shawfield, £37m
Ayr Gaiety Theatre regeneration, £1m
National Records of Scotland - Thomas Thomson House - urgent roof repairs, £1.5m
Historic Scotland - Abbotsford House - restoration to bring into public use, £0.7m
Historic Scotland - Lews Castle development, £1m
Forestry Commission Scotland - upgrade of visitor facilities at David Marshall Lodge,
Aberfoyle and Queen's View, Perthshire, £1m
National Parks - visitor facility improvements within the National Parks, £1m
Royal Botanic Garden, Edinburgh - commence replacement of the Garden's ageing glasshouses, £1.5m
TOTAL £302m
Add in broadband roll out, small business investment, flood works, plus the start of council house building and things begin to look very shovel ready very quickly.
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Interesting list but none of that would get classed as ‘investment grade’ by the markets, so forming a National Investment Bank and hypothecating printed money to it to then allocate accordingly to good things we want doing is misleading the public. A spade should be called a spade and this should be called a National Infrastructure Bank.
Its the NIB that would be investment grade
Existing banks lend to people who are not investment grade but are themselves deemed to have that status
I think you misunderstand what investment grade means. The loan customers of banks are investment grade, hence the bundling of the loan books and selling up to investors. That didn’t work out well, but the principle remains – investors trying to get a positive return.
But pray tell, will investors ( who will likely be banks or their customers ) be expected to buy shares in this NIB?
The NIB will be state owned
Its loans will be available for sale to all who want to participate
Rudi,
You could call it ‘spade ready’.
So let me get this right because it isn’t at all clear. If a council wants some money to mend its roads, it can go to this National Infrastructure Body for some money. Is the money it gets going to be a loan or a grant?
That’s a repair
So no
I’ll rework the query because it’s still not at all clear what PQE is about to me. If a local or regional government wants some money to build social housing, it can go to this National Infrastructure Body for some money. Will it get any money and is the money it gets going to be a loan or a grant?
And a follow-up question. Why should a roof repair get funding from a NIB ( see National Records of Scotland — Thomas Thomson House ) but a road repair does not qualify?
The project will belong to the NIB
LA will administer it
That Scottish list was an example – not an absolute. I would have thought that was obvious
I’ll ask the question again because clear answers are still coming on one of the most basic principles of how PQE is meant to function. If a local or regional government wants some money for an infrastructure project that is deemed desirable, it can presumably go to this National Infrastructure Body for some money. Will the money it gets be a loan or a grant?
Neither
It will administer a project whose owner will be the NIB
Think of it like a lease
Or, dammit, PFI
So hard to imagine?
So the National Infrastructure Board won’t lend money and won’t award grants. This sounds like a central planning nightmare will visit us. You could have existing council housing owned by the Local Authority, but the new insulation and the solar panels on the roof owned by the NIB, and the project management for doing this run from a central government department.
It’s a bank!
It’s a source of finance
Get real
We’ve been leasing for decades
Haven’t you noticed yet?
If these are worthy projects then why can’t they get done without PQE? Why does it take a recession (or future recession) to talk about these projects?
They could be done
The narrative is that this is not possible
PQE is about changing a narrative – by showing what is possible
That’s such a great list to all those who whinge about digging holes and filling them in again. And that’s before you get to more teachers, nurses, carers, insulating every home. But when people can see this list and ask, as Rob does above, why can’t we start this now then the human needs can start to trump the economic ideology.
The conservation of water, which many are suggesting will be in increasingly short supply in the future, by replacing the extremely leaky pipes used to transport it could make a useful and timely priority to add to the list.
Agreed!
I’d assume these projects in Scotland have already started or are very close to starting.
If not (and especially if they are still at the conceptual stage), Salmond would be misleading us in describing them as ‘shovel ready’.
Are there others at that stage elsewhere in the UK? Yes, sure, plenty. I doubt any local authority would decline the offer of money to help pay for them, especially if it came without too many strings attached (eg no clawback).
So there will be plenty more
And if the resulting saving is to current budgets then the injection into the economy is real
And social services will be protected
Good news
So why not just inject the money straight into social services rather than existing infrastructure projects?
1) A lot less political (compared to infrastructure).
2) If you want to attach conditions such as the living wage or earmark it for particular services, that’s fine.
3) Faster – we could get it out the door pretty much straight away.
You clearly want to ignore he fact that this is about investment
The ‘shovel ready’ projects (if they have already started or are about to start) will already have funding. How do you get that far without having funding in place?
Whatever stimulus or other benefits are to be derived from the projects will happen anyway.
Any funding central government provides for these ‘shovel ready’ projects under your plan will just displace that funding into other activities. That’s fine, but if those other activities involve new infrastructure projects, they won’t be shovel ready.
New projects like this just don’t happen at the click of the fingers.
Which is precisely why I have suggested things like insulation would start a PQE project
How many times do I have to say it?
How many times will you ignore it?
And as Prof Bill Mitchell noted last night – Australia dod this and it was a success
“If not, Salmond would be misleading us in describing them as ‘shovel ready’.”
I simply refuse to believe that Salmond would mislead people. I have watched him closely over the last 2 years, and it is my firm conclusion, that he would never, ever, ever do such a thing….
Insulation projects have been around for a while. There were the ECO schemes, and the earlier CERT schemes. This has been done and done.
I’ve worked on them and they aren’t implemented overnight.
“Australia dod this and it was a success”
A scandalous number of house fires (over 100, some resulting in deaths) from shoddy workmanship because the whole thing was rushed. Plus allegations of fraud.
The minister Peter Garrett was demoted by Kevin Rudd due to the maladministration of it.
The Australian experience is well known over here amongst the people who deal in these matters. It is treated as a warning.
One learns from mistakes
It appears you don’t
But what is really telling is your claim that insulation has been done
That is just nonsense
Yours day here are done
Please don’t waste my time again
How about buying out PFI? It doesn’t immediately fall under the banner of what we’d call shovel ready but it needs to be addressed and soonest too. Creditors could be told they get X pence on their pound and like it or nothing at all. I’d say this is fair enough as the basis of their involvement is that of ‘there’s not enough money’ which is artificial in the first place. We’d simply be setting right a great wrong paying PFIs off.
Corbyn’s already got there
So has Sadiq Khan
Who I note is also talking about an investment bank….