Larry Elliott wrote this in the Guardian yesterday:
Hammond has apparently given some licence by the prime minister to be radical with fiscal policy and should use it. Investment by the private sector has been weak since the Great Recession and is likely to be even weaker in the aftermath of Brexit. The government, therefore, needs to fill the gap.
There are two ways of doing this. The first involves the Treasury taking advantage of low interest rates to borrow for long-term investment. Not just in roads, railways and airports but in Britain's digital infrastructure and its human capital. One of the country's most glaring structural weaknesses is that the unemployment rate for young people who leave school with the most basic education is among the highest in the developed world.
An alternative approach would be to harmonise the activities of the Treasury and Bank of England, with the former issuing infrastructure bonds and the latter buying them up through its QE programme. This idea was floated by the Green New Deal group (of which I am a member) after the Great Recession, proposing a major programme of housebuilding and energy efficiency involving jobs for every UK constituency.
Jeremy Corbyn latched on to this idea, calling it People's QE, when he was running for the Labour leadership, but he now appears less keen. This is a bit curious. A Green New Deal or People's QE is something governments need to have up their sleeve when times get tough and they have run out of alternatives. Like now.
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I cannot understand why PQE has been sidelined by Labour. It is inexcusable. An abrogation of duty to the people they say they represent. Sod ’em.
As for Hammond – I still think that even the Tories know that when they go too far (as The Posh Boys did), money does help to calm things down so I will keep my fingers crossed.
I really don’t see the new Cabinet going for Green QE: I’d be delighted if they did, but none of them had anything to say when the Cameron/Osborne government withdrew all support for renewables.
And, as far as I am aware, there is now no minister with an explicit brief for Climate Change. I’m sure there must be a minister who would speak on environmental issues in general and climate change in particular, if the Government were pressed on the issue; but no-one would step forward and claim responsibility for formulating policy today.
I can’t see the Tories doing it
I am sincerely hoping Labour will
Indeed. And there is very, very bad news coming on Climate Change.
A hint: add ‘Tamyr Peninsula’, ‘Methane eruptions’ and ‘Tundra fires’ to your daily news search script.
Some of the bad news is here already: ask an underwriter about localised extreme events, and you will hear that last week’s flash flood in Paris was entirely unsurprising. The short version is that this wad predicted and priced; and the UK has a massive infrastructure deficit in urban storm drainage.
There are real (and recessionary!) business costs here, payable this year or next, for everyone with a large car park or a mandatory business-interruption insurance clause in their loans.
I can’t find anything on Corbyn’s waning enthusiasm for PQE. Is this a case where absence of evidence actually is evidence of absence? Or are there any more concrete signs out there?
It is simply not referred to, for example at the May economics conference, even though the time for it has very obviously arrived (which was not true last summer)
The reason why it has been dropped is the influence of one economic adviser who moist would consider the most right wing