This letter is in the Guardian this morning:
Theresa May's “genuinely innovative speech” (Editorial, 12 July) contained a commitment to government-backed project bonds which could be used to boost infrastructure nationally. This is very timely, coinciding as it does with the Committee on Climate Change's warnings that the UK is inadequately prepared for dealing with expected temperature rises, plus the fact that their findings have to be acted upon by law by the UK government in developing its adaptation plan (Report, 12 July).
Fusing these strands together, then, infrastructural renewal is clearly the key. One proposal that meets Theresa May's new objectives is that of the Green New Deal group's suggestion of making the UK's 30 million buildings super-energy-efficient, dramatically reducing energy bills, fuel poverty and greenhouse gas emissions. The housing crisis should be tackled by building affordable, highly insulated new homes, predominantly on brownfield sites. Such a programme would provide jobs and business opportunities in every constituency in the UK and require finance of the order of £50bn a year.
Theresa May's proposed “project bonds” could, for example, be funded by green quantitative easing (QE). Between 2009 and 2012 the Bank of England e-printed £375bn of QE and Mark Carney is already on the record as saying that QE could possibly be used to fund such a green approach.
As Theresa May replaces David Cameron, such an initiative could enable her to truly take on the mantle of leader of the greenest government ever.
Colin Hines
Convener, Green New Deal Group
One has to live in hope.
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If it happens, this is good but it a big if coming from someone who supported, implicitly the ‘there’s-no-money-myth’ and some of the most oppressive policies on unemployment in recent history. She said NOW’T to challenge that. That does not create an aura of trust and she will have to be held to account EVERY step of the way.
To go from ‘there’s no money’ to ‘there is a money tree’ is a big leap when you never heard the vaguest hint of it before. She will have to ensure that it is done otherwise she’s finished. These words, implicitly leave many Tory M.P.s in deep doo-doo for their track record over the last 6 years. Perhaps we need a ‘Peace and Reconciliation’ committee to drag out red-faced apologies from then?
Of course We’ve heard d nothing as yet about the callous treatment of the unemployed which carries on apace at Job Centres (‘Sanction Centres’) around the country with JSA claimants having to jump through irrelevant hoops of fire;attend stupid and useless ‘course’ and in general be treated in a demeaning way (see: http://www.mirror.co.uk/news/uk-news/tory-minister-insists-jobcentres-dehumanising-7668030)
The Damascene conversion of ‘The Rector’s Wife’ needs to show its substance fairly soon.
But we need to remember that these bastards don’t change their spot’s that easily!
Bevan’s word’s are still relevant (with minor adaptation!):
” So far as I am concerned they are lower than vermin. They condemned millions of first-class people to semi-starvation. Now the Tories are pouring out money in propaganda of all sorts and are hoping by this organised sustained mass suggestion to eradicate from our minds all memory of what we went through. But, I warn you young men and women, do not listen to what they are saying now. Do not listen to the seductions of Theresa May. She is a very good salesman. If you are selling shoddy stuff you have to be a good salesman. But I warn you they have not changed, or if they have they are slightly worse than they were.”
Don’t allow too much time for ‘benefit of doubt.’
Cameron’s government was to get rid of the brownfield/land remediation grant by 2017. If May is serious, that withdrawal of funding needs to be cancelled straight away and a budget created that is commensurate to the task.
Good point PSR.
I might also note that “brownfields” do not become communities without transport and other supporting infrastructure.
Indeed Marco, indeed.
Lots to do, lots of jobs (public & private), lots of disposable income meaning it becomes other people’s income and some tax back as well for the Treasury.
Simple isn’t it?
Indeed, we could expect there to be a good multiplier effect in this case.
I imagine it`s pretty unlikely that any sort of Direct Labour scheme would be used for any of these infrastructure projects so it will be another opportunity for private profit.
But even that will be the best we can hope for.
(exit, muttering darkly)
At some point the private sector is always met
I believe in a mixed economy
You don’t?
Please *forgive my ignorance*, I am not an economist.
I believe the critical factor is “Who owns the infrastructure which has been paid for with public funds”
I have heard about PFI schemes, which are paid for and guaranteed by the taxpayer, whilst being developed and delivered by companies which generate profits. I do not know if this is still a relevant issue in today’s economy, I vaguely remember the public being alerted to a “scandal” a few years ago…
Would you care to briefly explain how a mixed economy would operate to the public benefit?
The private sector creates employment, investment and growth
It does so on the foundation of government spending, but I personally believe they work best in partnership
I think we have got the divide wrong: we need more state and less private right now because too much has been privatised but there is no way I would suggest removing the private sector from the economy
I also agree with a mixed economy, but if the infrastructure projects are only tendered to private sector contracts, there will be two possible missed opportunities.
First, as Simon alludes, there is the potential for money to be wasted through “syphoning” (backhanders, PFI and executive pay in excess of delivered value).
Secondly, the use of publicly employed workers provides an opportunity to promote increases in wage share, by providing a floor for how low the workers engaged on the projects can be paid. The Private sector will, in it’s desire to provide the lowest possible “cost” while maintaining sufficient profit for the company, would likely aim to drive worker remuneration as low as possible to deliver these aims.
The private sector most definitely has its place but it need not be involved in infrastructure, the fact that most infrastructure is natural monopoly fully reinforces that point.
The use of the private sector is not necessarily an issue as long as their is good quality control and no ‘backhanders.’ Even in 1945 et seq. the Government used private contractors.
Yes but not when the mix is overwhelmingly skewed towards the private.
I propose this simple equation:
The private sector is acceptable in the building but not the running of infrastructure and state services – and definitely not the ownership.
It is acceptable in providing services to the owners (being the state or community)and dealing directly with the owners – but not with the users or customers.
Hospitals (I work in the NHS) have always been built by the private sector, it is the responsibility of those in the NHS/ government who negotiate the contracts to do so properly. Of course PFI syndicates also use private sector builders to build hospitals but the difference is the syndicates then rent the builds to the NHS/government at very high guaranteed rates for a guaranteed length of time, after which the NHS has a right (I think) to buy the hospitals back from the owners!! Several of the owners are incorporated in tax havens to add insult to injury (eg PFI owners at Calderdale and Huddersfield NHS Foundation Trust)
For the record here are the comments on the letter Caroline Lucas received from Mark Carney confirming the BoE can create MMT style money from nothing for Green QE, Corbyn’s Peoples QE and May’s Project Bonds thereby enabling a massive public infrastructure investment programme:-
https://www.carolinelucas.com/latest/financial-times-mark-carney-boosts-green-investment-hopes
And, for reference purposes, here is the original FT article in question:
https://next.ft.com/content/812f3388-aeaf-11e3-8e41-00144feab7de