The Green New Deal is all about ‘levelling up’ the UK

Posted on February 27 2020

The FT has noted this morning that:

Britain must spend at least £1tn over 20 years and devolve power out of London if Boris Johnson's government genuinely wants to “level up” the country, reducing the gap between the poorest and richest areas.

In a report to be published on Thursday, the UK 2070 Commission led by former civil service chief Bob Kerslake, said the government must match its rhetoric with money and policies. “The gap is enormous, the biggest gap of any large economy in the developed world, and it is getting wider,” Lord Kerslake told the Financial Times.

They added that:

He compared the amount required to transform the British economy with the £1.5tn spent on the former East Germany over 25 years. But he refused to be drawn on how the government should pay for it. To date only around £100bn has been earmarked for infrastructure over five years.

No doubt there are some, probably in Tunbridge Wells, who will see no reason for any of this. Such has been the attitude of many on the right for a very long time: they would argue that the differences in wellbeing that are witnessed in the Uk are just the result of market forces, whilst ignoring how these have been massively distorted by the activities and actions of many, largely Tory governments over decades of bias towards London and the south-east.

Now is the time for change. Bob Kerslake is right. And the cost will be significant. But I have already shown how to raise £100 bn a year for investment in the UK. As I noted last September of the Green New Deal:

  • This transition can be paid for without increasing taxes;
  • About £100 billion a year is paid into UK pension funds and all of that money gets tax relief from the government. The total tax subsidy costs £54 billion a year. We say 25% of those contributions should go into Green New Deal Investment in exchange for that tax relief. That would supply about £25 billion a year to the Green New Deal;
  • About £70 billion is saved in ISAs a year. If ISA tax relief was dependent on these funds being invested in the Green New Deal in future at a government-guaranteed rate of [1.85%, which is the average cost of UK government borrowing] we think that all this money might be available to the Green New Deal.
  • Right now these two sources of funds should, by themselves, fund the whole cost of the Green New Deal.

And as I see it there is little difference between much of what the Green New Deal is about and this levelling up process. We have always argued that the Green New Deal is about creating jobs in every constituency.

My point is simple: the money to fund the levelling up of the UK exists; we just need to tap into it.

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4 Responses

  1. Andrew says:
    February 27 2020 at 12:06 pm

    Devolution is just as important. The entire country cannot be run by one person in London.

    We already have one of the most centralised systems of public administration in Europe, if not the world, with power centralised in London – and not just in London, but in Whitehall – and as we have seen in recent weeks the power held by government ministers is itself is being concentrated further in Number 10 and indeed in the hands of the Prime Minster and his principal adviser.

    This is the elective dictatorship we have chosen for at least five years.

  2. Graham Hewitt says:
    February 27 2020 at 1:14 pm

    I also blame the LibDems for some of this centralised dictatorship and for enabling FPTP to be consolidated and therefore preventing any check to the likes of Johnson and his Svengali. They had the chance to introduce an effective system of PR and blew it, by choosing the wrong one and allowing the Tories to destroy the opportunity for goodness knows how long – at least a generation, to coin a phrase, and more likely several.

  3. Neil Ferguson says:
    February 28 2020 at 5:07 pm

    Something that caught my eye:

    “The Bank of England will stress test its major banks and insurers against different climate pathways, including the ‘catastrophic’ business-as-usual scenario and the ‘ideal — but still challenging’ transition to net zero by 2050, as well as the late policy action scenario.”

    https://www.current-news.co.uk/news/net-zero-could-be-the-greatest-commercial-opportunity-of-our-time-but-requires-a-whole-economy-transition

    If companies like BP won’t commit to net zero targets on all of the carbon emissions they facilitate, then I wonder if this could focus minds by asking “what happens if people drastically reduce their oil usage, so BP finds itself unable to repay its corporate debt to the banks and insurers holding it?”