I was at a meeting of the Green New Deal Group in parliament last night.
Let me leave aside the increasing absurdity that I feel surrounds that place and the posturing pretence that goes with it. We were there to discuss a new report to be published by the Group, of which I was a founder member back in 2007.
The report in question, to which I have contributed, comes out next week. That contribution is, I admit, based on the Taxing Wealth Report 2024, which is why I really did have to produce a summary of it yesterday, because I circulated it at the meeting last night.
However, others including the New Economics Foundation and the Womens' Budget Group have also contributed to a series of new notes that were published yesterday by the Group on the theme of how to pay for a Green New Deal. The section from its website on the five related briefing sheets that have been produced is as follows:
Personal taxes – we could raise about £28 billion a year by taxing income from wealth more effectively and scrapping the reduced rate of national insurance for high earners.
Corporate taxes and subsidies – we could raise about £25 billion a year by closing a loophole for oil and gas investment, reducing a hidden subsidy paid to commercial banks, and ensuring all companies file their tax returns correctly.
Harnessing private finance – the Bank of England could steer investment away from fossil fuels and into green projects by fully recognising the risks of fossil fuel investments, refusing to accept fossil fuel assets as collateral, and introducing a lower interest rate for banks lending to green projects.
Putting savings to productive use – as much as £100 billion a year could be found for investment in Green New Deal projects if new savings in ISAs, and some pension contributions, were required to be invested in this way. This would help ensure that savings which benefit from tax-free status are benefiting society in return.
Public sector borrowing – a summary of why government can and must borrow to invest in a Green New Deal, without fear of simplistic ‘fiscal rules
As will be apparent, not all the approaches exactly tally with those I have used. But, the key messages are threefold.
First, a Green New Deal can be financed.
Second, doing so is not hard.
Third, to deny this is to deny the truth.
This combined effort is of value for this reason.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
So a combo of £53bn (tax) and £100bn (private finance) would deliver circa £153bn/year. That would fund quite a bit. Putting this into perspective, Draghi (ex Pres of the ECB) is writing a report on funding the EU’s “green deal” – & is talking about a similar split 33/66 between public and private finance. Headline figure is Euro500bn/year – so the £153bn is quite respectable. Which leaves the open question: how to pressure the politicos? – who seem to have purchased tin-ears wholesale.
I wish I knew the answer to that
My job is to help the campaigning specialists answer the question, how will you pay for it?
If I may add something: next week in Bx I have organised a meeting amongst the major (industry) lobby groups addressing these points: where are we on de-carb, cost of energy, where does the money come from. I am doing a 10 minute presentation on each to “stimulate” discussions (which will be round-table/boardroom style).
Reading through assorted Commission docs in preparation – one thing struck me: there is an assumption that “get the right policy” and results will happen (via “markets”). Since 2000, the EU has being developing de-carb policy @ high speed…….the result is pathetic. Arguably, the only successful de-carb policy was that of renewable subsidies – all persued by member states and having exactly zero to do with EU/EC “policy” (DG Competition acting as a rubber stamp for each subsidy programme).
What is needed is a more pragmatic approach to de-carb. Where opportunities are developped in an ad-hoc fashion – if it works – press the loud pedal. Let me give you an example/readers a free gift: Rockwool has a massive factory producing insulation outside of Bridgend. It emits massive amounts of (high-temp) heat and is surrounded by countryside. The UK imports large amounts of fruit ands veg from the Netherlands (greenhouses heated by nat gas – the main cost input) and Spain (where water is running out). It is possible to re-use the waste heat from the Rockwool factory (for a nominal price) plus the Co2 (greenhouses need CO2) and deliver ultra-low cost fruit & veg. Note: Bridgend sits in an area of high unemployment.
All European countries have a myriad of similar business opportunities. That they are invisible @ a policy level shows a total failure to look @ the real world and develop real world solutions. The policy-markets process needs to be broken. We are in an emergency situation in which ad-hoc, do it fast, if it works, roll it out, approach is key. This approach has been, literally, battle tested, on-going in Ukraine, & “Fighter” by Len Deighton, the latter showing that in an emergency situation, “the usual channels” need to be bypassed because they were designed for “steady-state” situations.
I recently read ‘Fighter’. When reading the descriptions of the differences in how the Nazis and Britain treated the actual fighter pilots and their air-crews, it was difficult not to think our guys were fighting for the wrong side. I concluded we defeated the Nazi tyrants so our existing upper class tyrants, their existence as such cloaked by our schooling, could go back to business as usual.
The Dambuster story makes that very clear.
Can we do this AND fix the NHS and Care services? By fixing I mean paying Jnr Doctors at least 80% of what they are demanding. AND at the same time can we renationalise public services, energy, rail, water?
Not overnight, no, excepting junior doctors.
Nor do I place emphasis on renationalising services, because there are multiple ways to achieve goals there.
But can we be green and have good public services. We really do not have another option.
After World War II when Britain was broke, it founded the welfare state, including the NHS, started to build 4.5-million houses, 80% of which were affordable housing, we had cheap rail fares and cheap energy, and people could get a 3.5% 25-year fixed rate mortgage. It could be done back then, and now, after economies of scale, it should be possible today (though it would take several years to do).
That’s affordable in the sense the housing was genuinely affordable for many people as opposed to the 80% of market value the term has been corrupted to mean today.
I do not want to get too far ahead of myself, but I am concerned about how the money available, that you have done such an excellent job uncovering, might be spent.
On a macro-level I think we should definitely not be giving vast amounts of public money to the kinds of monopoly seeking, speculative “investors” that are currently building, and therefore owning, our present Green infrastructure.
Green energy supply needs to be publicly owned.
If it is not we will find, that Green energy mysteriously costs just as much or more than the Fossil fuel energy currently owned by exactly the same people.
Such a system would also give its owners exactly the same kind of power over our national supply and security that they have already demonstrated by their refusal to bid for new contracts unless energy prices are high enough.
On a micro-level we will need to provide a much better system for Greening our badly heated and insulated housing than that provided last time round by New Labour when they put their faith in “market-Based” solutions.
They ended up with the kind of multi-level subcontracting system that is only good at profit gouging and avoiding accountability, but delivers incompetence, a rotten service and the kind of gross misuse of public money seen in the scandals of PPE and HS2.
For example, an elderly relative had a new boiler fitted by sub-sub contractors working from the firm that had the Government Warm Front contract.
It didn’t work from day one.
After phone calls, letter writing and sending emails, a self-employed inspector working for a different sub-contractor was sent who identified several major problems.
A gas engineer from yet another sub-contractor came and did what he could.
As a result, and only because of regular maintenance, excessively expensive because of the initial botched fitting, the boiler limped along for another 5 years before it had to be replaced.
I am very concerned that the same fate will befall any green-spending by the next government.
I accept that this is a real concern
Replying to Mike Parr’s comments about the Rockwool factory in Bridgend, it is a shame that more use couldn’t be made of the totally natural and sustainable ‘real wool’ produced every year by the million or so sheep in Wales for insulation. It is now of so little value to farmers that many either burn or bury it as it costs more to shear a sheep than the value of the fleece.I can testify as to its insulating qualities as I have put it in my roof and didn’t even have to make a fire last night, despite the frost!
Buy food online from a farm and wool is invariably used for the packaging these days. Very good it is too. I don’t have a loft (ground floor flat) or else I’d be saving it.