Britain celebrates (Japanese) state investment

It seems like everyone is investing in British infrastructure except for the British government

Duncan Wheldon at the TUC points out something:

David Cameron has arranged for a state-backed lender to step into the breach and help finance infrastructure projects, including wind farms, in the UK to the tune of ‘billions of pounds’.

The state-backed lender is the Japanese Bank for International Cooperation.

Given that the UK’s own Green Investment Bank is currently limited to £3bn it is perfectly possible that the UK’s green industries will recieve more funding form the Japanese state than the British one. This strikes me as an odd development.

None of this is new, of course. Foreign investment banks have been buying up British industry for years. As I wrote at Left Foot Forward, the China Investment Corporation now owns 9 per cent of Thames Water, and Abu Dhabi owns another 10 per cent:

With Thames Water now almost a fifth owned by foreign governments, and vast amounts of foreign state ownership in other public infrastructure companies from trains (Arriva) to postal services (DHL) and energy (EDF), the government will have an increasingly hard line justifying its long-held belief that private companies are inherently more efficient than state-owned ones.

Indeed, with the opening of the London-Frankfurt line in 2015, Deutsche Bahn will be operating on British soil under its own name for the first time.

Britain is finally getting a start on investing in our own infrastructure, rather than waiting for others to do it for us. As Joe Manning wrote yesterday, London boroughs aren't waiting for central government to get started, pooling their resources to get a better return for their money and improve the city with one move. It makes sense:

Pension funds have long time horizons. This means that they are well placed to invest in the infrastructure that is crucial to economic growth but will not realise immediate returns, such as new transport connections. In fact, there is a near perfect match between pension funds' appetite for long term assets and the need for long term financing of infrastructure.

Or we could do nothing. That seems like a popular plan.

A French wind turbine. Ours are Japanese. Credit: AFP

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Heathrow decision: 6 things we learnt about the third runway plans

Affected homeowners will get 25 per cent extra for their homes. 

After years of ferocious campaigning by both Heathrow and Gatwick to be the site of a new airport runway, Heathrow has triumphed. The government has accepted the recommendations of the Airports Commission and backed a third runway at Heathrow.

Confirming the decision, the Transport secretary Chris Grayling said: “The decisions taken earlier today are long overdue but will serve this country for generations to come."

So what happens now? Here is what we learnt:

1. It’ll be a while

Grayling said the draft policy statement will be published early in 2017. There will then be a full public consultation, before MPs get a chance to debate the details and vote on the proposals.

Only after that, will Heathrow be allowed to submit a planning application for the third runway.

2. Affected homeowners get a bung

Building a third runway will require the destruction of local homes, and Grayling said these homeowners can expect to be paid 25 per cent above the market rate. All associated costs, like stamp duty and legal fees, will be covered. 

3. So will the local communities

The government is promising £700m for insulating homes against noise, and it is floating the idea of a Community Compensation Fund that would make a further £750m available to local communities, although the details will be confirmed through the planning process. 

4. No flying at night

The government is demanding that flights are banned for six and a half hours a night to give locals some peace. Heathrow will also be expected to continue to give local residents a timetable of aircraft noise.

5. Air quality matters

Heathrow’s successful proposal included an ultra-low emissions zone for all airport vehicles by 2025. The airport can only get planning approval if it can meet air quality legal requirements. 

6. There will be a by-election

Zac Goldsmith, the MP for Richmond Park, is to resign in protest at the decision, and is expected to run again as an independent candidate. Speaking in the Commons, he warned that the decision to choose Heathrow was full of legal complexity and "will be a millstone around the government's neck". 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.