| The writer continued, “…Stepping up investment in infrastructure will not only stimulate the economy in the short-term, but will also increase the potential for future growth…” They did not speculate extensively on where the money for investment was to come from, but it was clear that they were supporting the UK Government’s new planning legislation, in which the presumption for development will apparently always take precedence over objections to development. The Times writer did not make a very clear distinction between sustainable and unsustainable development, and considered building a gargantuan new airport in the Thames Estuary as valid a project as new wind power research in Aberdeen.
The Times appears to have understood that Britain’s energy infrastructure needs some concentrated attention : “Renewing Britain’s energy infrastructure is one of the biggest challenges that the country faces but it also presents a huge opportunity.” Part of the Coalition Conservative-Liberal Democrat Government’s Electricity Market Reform seeks to apply state subsidies to low carbon generation, although rewarding power generated from existing nuclear power stations cannot possibly stimulate the new nuclear builds that the Government are keen on.
Just as the Conservative Party Conference was about to launch, news came that a man from HM Treasury didn’t like the idea of heavy investment in Britain’s economy. Select Committee chairman Andrew Tyrie criticised plans for state support for a “green economy”, amongst other things. He was clearly not in favour of heavy spending, which would include not only nuclear power subsidies, but also the outline for a Green Investment Bank, lending to homeowners and landlords to renovate homes for energy conservation. “The Big Society; localism; the green strategy – whether right or wrong; these initiatives have seemed at best irrelevant to the task in hand, if not downright contradictory to it”, he is reported as saying, “…the age of abundance has been replaced by the age of austerity. Current policy does not adequately reflect that fact”.
This criticism aside, it hasn’t stopped Chancellor George Osborne setting out to create an entirely new financial product, that looks and feels a lot like Quantitative Easing, but isn’t. This “credit easing”, as known as the “Bennie”, is an attempt to keep the money off the state budget, whilst also not printing any new currency. It’s technically a derivative, and that should ring a few alarm bells, if anything should. Osborne wants us all to go back in time and use non-money to create a market – this could all end in a bubble and tears.
And Osborne isn’t the only person trying to manufacture economic activity from thin air. A consortium is going to offer cheap loans under a “Green Deal” to implement consumer energy conservation projects. So, not only will Osborne be creating dodgy financial products, but British Gas, EdF, E.On, B&Q and Goldman Sachs want us to get deeper into individual debt. Yes, Goldman Sachs.
Are you thinking what I’m thinking ?
“The Times, Saturday 1 October 2011”
“Re-engineering the Economy”
“Britain requires more ambitious investment in infrastructure and more
activist industrial policy to underpin long-term recovery”
“Reviving the British economy is a huge challenge. The task involves
much more than clearing up the mess caused by the financial meltdown
in 2008. It is much bigger than battling against the headwinds from
the eurozone debt crisis and the slowdown in the global economy.”
“For years, Britain lived beyond its means, buoyed by ever increasing
debt and an unsustainable boom in financial services. Now that the
party is over it is clear that other areas of the economy have
atrophied. Manufacturing has continued to shrink and the underlying
infrastructure of the economy has been starved of resources.”
“What Britain needs now is thus not merely recovery from recession: it
is a comprehensive re-engineering of the economy. At the heart of this
process should be a more ambitious approach to infrastructure
investment and more activism in industrial policy. In The Times today,
David Wighton looks at six good ideas for projects that could boost
Britain’s economic prospects and quality of life. They range
from an motorway linking Oxford and Cambridge to a testing ground for
wind turbines in Aberdeen.”
“Stepping up investment in infrastructure will not only stimulate the
economy in the short-term, but will also increase the potential for
future growth. Upgrading our transport, energy and telecoms networks
will help to rebalance the economy away from financial services and
the South East.”
“But to do so on the scale required will need a big cultural change.
Too often, ambitious projects get nowhere because they are deemed too
difficult, too expensive or too politically unpopular. If Britain is
to remain competitive, particularly with emerging economic powers in
Asia, we must stop saying no.”
“The Olympic Park development shows that Britain can carry out big
projects very successfully. Clearly, public money is short. But there
is a huge amount of private funding looking to invest in British
infrastructure. What is needed more than anything is for politicians
to confront opposition to big projects and to prevent schemes getting
bogged down for years in the planning process.”
“The shambles that is government airport policy is an example. To
remain internationally competitive, London needs a hub airport with
more capacity. Because of local opposition, the Lib-Con coalition
ruled out a third runway at Heathrow. The Government should reopen
that debate but Philip Hammond, the Transport Secretary, offers little
hope of that prospect. “There will never be another runway at
Heathrow,” he says in an interview with The Times today. In that case,
the Government must look seriously at alternatives, including a £50
billion airport in the Thames Estuary.”
“Renewing Britain’s energy infrastructure is one of the biggest
challenges that the country faces but it also presents a huge
opportunity. There is a chance for British companies to build a
leading global position in renewable energy technology. The Government
rightly believes that it should be actively involved in supporting the
development of that industry. It should extend this activist approach
to other areas of the economy, particularly in science and technology.
The UK has a headstart on the genome. We cannot squander it.”
“The coalition has inherited some promising initiatives from Lord
Mandelson, the former Business Secretary, including plans for a
network of centres to help to commercialise more of the world-class
technology coming out of British universities. These have huge
potential but will only succeed with proper funding and real
engagement by ambitious businesses.”
“Re-engineering the British economy is a daunting prospect. But our
Victorian forebears would have risen to the challenge. The alternative
is long-term relative decline.”
“Anti-Business, As Usual”
“Ed Miliband’s conference speech has jeopardised Labour’s relations
with enterprise”
“Labour’s prospects of returning to government dimmed this week as the
party appeared to turn its back on business. As the Conservatives
gather in Manchester for their conference next week, they face a
slowing economy, a debt crisis in the eurozone and a domestic growth
strategy that appears inconsistent and incoherent even to their most
financially minded MPs. But one thing fewer that they have to worry
about is the threat of a credible opposition. The reason is that Ed
Miliband boldly took his party in the wrong direction in its relations
with people who create wealth and can foster growth in output and
employment in this country.”
“The speeches at Labour’s conference in Liverpool this week by Ed
Miliband and Ed Balls, the Shadow Chancellor, repeated the party’s
refusal to acknowledge that, in its last few years in charge, money
was going out at a much quicker pace than it was coming in. This is an
intransigent stance that Labour will regret.”
“Until the party’s most senior people show the seriousness that is due
about the public finances, a course that would involve spelling out
which cuts they would keep, they cannot hope to inspire any economic
confidence. Business deserted Labour in 2010 and, even though vigorous
growth is still elusive, there is as things stand little chance of its
coming back.”
“What little prospect there was of an immediate reconciliation between
the Labour Party and commercial sector was indeed shattered by Mr
Miliband’s speech. Though he claimed later, in his salvage round of
interviews, that we was “against business as usual” he left the
impression that he was, in fact, “against business, as usual”. To any
disinterested observer, it would have felt as if normal service were
being resumed in the Labour Party. It is hard not to gain the
impression that there is nobody in the party’s ranks who has any real
understanding of business.”
“It is not that there is nothing in Mr Miliband’s distinction between
good and bad business. When a business trades on employees who are
educated and kept healthy at public expense and when a company
benefits from the rules of contract and tort that underpin free
exchange, private enterprise overlaps with public questions. But no
serious business leader disputes this. On the contrary, this is
something that every respectable business would find obvious.”
“Mr Miliband’s serious error was to suggest that the bad businesses –
and quote who those are beyond Sir Fred Goodwin and a few unspecified
asset strippers, nobody is really sure – had been fleecing the country
for three decades. It is true that the actions of a greedy minority
can throw the reputation of the market’s order into disrepute. The
rules that prevail in the marketplace must be fair and, to that
extent, capitalism must be underpinned by a moral virtue.”
“The classic account of the social democracy that Mr Miliband espouses
was written by Tony Crosland in his seminal volume “The Future of
Socialism”, published more than 50 years ago. It rests on economic
growth, the proceeds of which pay for the social projects of a Labour
government. That project is inconceivable without the entrepreneurs
who create the wealth that the politicians seek to distribute. In a
single speech, Mr Miliband has begun to unravel a relationship that
his party needs.”
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