I have this letter in the Guardian this morning:
Labour's clear commitment to a £250bn “green transformation fund” correctly puts climate centre stage in this election (Turning on the spending tap: How the parties' plans compare, 8 November). The usual economic suspects have immediately lined up to wring their hands, worrying about levels of debt and the availability of “shovel-ready” projects. They miss the real points.
The first is whether there are buyers for the bonds that will fund this spending. At present, more than 80% of UK personal wealth is invested in tax-incentivised assets.
In that case simple tax rule changes will drive buyers towards Green New Deal bonds. For example, if the rules on Isas were changed so that all funds saved had to be invested in Green New Deal bonds, and an interest rate of 1.85% (the current average cost of UK government borrowing) was paid then the £70bn that goes into Isas each year could be directed towards the Green New Deal. Simple changes to pension rules could provide the rest.
Second, as for a lack of shovel-ready projects, Labour's plans include making the UK's 30m buildings energy efficient while shifting energy supply to renewables. We already have the skills and knowledge to restart this transformation, since many in those sectors lost their jobs when the Conservatives cut support for such activity. Of course, a massive retraining programme will also be required, but if the government makes the money available you can be sure that the shovels will come.
Prof Richard Murphy
City, University of London
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It really is the mantra from Field of Dreams
Build it and they will come.
If this comes off it could be an exciting time to live. If we fail …
Splendid stuff.
The prospect of not getting on with GND projects is that we have at least another decade of more of the same divisive austerity policy, further demolition of social cohesion, and poverty for masses of people.
Johnson’s priority spending plans are to spend on the NHS to make it more attractive to American buyers and to increase police numbers to control civil unrest. That’s not a great future in prospect. (Oh, and of course to ‘get Brexit done’ which is still the same fantasy it was three years ago)
How far insulated from reality does a person need to be to vote for that ?
[…] Finally, note that there is big demand to save with the government already – £156 billion of savings held with NS&I proves it. This could increase, significantly. […]
Speaking to people locally, quite a few have had recent operations (gall bladder removal, hip replacement for example) in private hospitals paid for by the NHS. The alternative was to wait 6 months or more to be treated in the local NHS hospital. This suggests three points:
1That the NHS is underfunded for basic surgical procedures
2The NHS is forced to pay out exorbitant fees for its patients to use private facilities – my friends loved their free private rooms and super food.
3 That this fattening up the private sector so that it becomes the first (and only) choice for such procedures, leaving the NHS as an A&E/ major operation (eg heart bypasses) service.
If Johnson wins a majority can an insurance based system for basic procedures in the private sector with no NHS alternative be far behind? The capacity is already there.
PS. I enjoyed your letter in the Guardian, Richard. When is the BBC going to let you loose?
All noted
And to the last, not a hope I suspect
A shovel ready project is one where the workers can actually start.
A scheme requiring a new government, changes to the law and significant retraining would seem a long way off (years?) being ‘shovel ready’.
Also, are you aware of existing and previous schemes (eg ECO, CERT)? I’d have said they did as well as they could have, given the usual constraints (eg eligibility etc). Are you looking to lower the bar for eligibility? Are you looking to compel property owners to take part? What would you do differently?
The Green New Deal will require compulsion, yes
We have life on earth to save
Yo think participation should be optional? Why?
Compulsion?
Presumably by law ¬ just the GND commission (whatever that is) – and if I won’t comply? Gulag for me?
The GND Commission will be a state agency….
The consequence of not complying? Significant energy cost increases, I would suggest.
When people say that they can’t see any “shovel-ready” projects, I have to wonder where they’re looking. The options cover a huge range: from the energy efficiency measures you mention, all the way to large-scale grid infrastructure.
Just as an example, SSE want to build a 30GWh pumped-storage station at Coire Glas, estimated in 2013 to cost £800M.
https://www.constructionnews.co.uk/civils/sectors-civils/sse-doubles-capacity-of-800m-scottish-hydro-plans-19-04-2018/
The design work’s been done, planning permission has been granted for the original project (I think the power upgrade to 1500MW is still outstanding) and the only problem is funding it. That’s as “shovel ready” as a project like this gets.
This is critical infrastructure the grid will need to store spare energy and smooth out fluctuations in renewable power sources. We need several Coire Glas-style stations, yet we haven’t built one since Dinorwig in 1974!
Then we get to all the grid strengthening and interconnectors we’re going to need to bring power from the places where the best renewable resources are and move it around the country. We could spend another £2bn quite easily on interconnectors to bring wind power from Orkney, Shetland and the Western Isles, never mind the cost of the wind farms themselves.
The list goes on and on. How about 2GW of tidal power from the Pentland Firth? Arrays of solar panels in Fife or East Lothian?
These are just the Scottish projects that come to mind. I’m quite sure the rest of the UK can contribute even more projects in proportion.
I may have ranted about this stuff before on Twitter 🙂
Old thread about UK Government energy policy (with links):
https://twitter.com/NeilImperator/status/1052015098838048770
Newer thread about OFGEM (and more links):
https://twitter.com/NeilImperator/status/1160328940738818049
Thanks
Niel, I’ve not seen much lately about the National Grid infrastruture / energy transmission efficiency. Mostly energy generation. Any recent links or projects on superconducting / cryogenic cables?
Why should the UK Government issue bonds at all? Just let the spending accumulate as excess reserves in accounts at the central bank. If the UK Government wants to provide the non-government sector with a completely safe, interest-bearing way to save, there are other options, such as allowing people to open term deposits at the central bank. There is absolutely no intrinsic need for the UK Government to issue tradable securities. All it does is confuse people by creating the impression that the UK Government needs to borrow the very currency that it creates every single time it spends.
International convention requires it at present
And so do many savings mechanisms
As well as the banking sector – and we need one
So I see reason for the bonds, pragmatically
BUT I agree there is no reason at all why we must think we are in hock for them: we are not in any way at all
They are just savings: that’s all
Why not go whole hog and simply destroy all savings above a minimum…after all its all created by government anyway…what can be given can be taken away…
Do you really expect anyone to take you seriously again?