What's the deal with the New Green Deal?

The same old mistakes are made again today by those who pull the levers.

Britain is not heading for a new economic disaster; it has sustained one long-term national and personal debt crisis. One group, the Green New Deal Group, has been consistent with its critique: economic failure caused public debt to rise and this is where the crisis lies.

The same old mistakes are made again today by those who pull the levers. Unemployment figures are down but this is sustained by part-time or zero-hour contracts and underemployment. Tony Dolphin said in 2012 on these pages: "We know there are many reluctant part-time workers because the Office for National Statistics asks those who are working part-time if they would prefer to be working full-time and 1,418,000 are currently saying "yes" – the highest number since comparable records began in 1992 and an increase of 700,000 over the last four years.”

While the number of unemployed is reduced the amount of work being done doesn't rise. Jobs aren't being created quick enough, it's just more jobs have more people working them. That's not what we had in mind when criticising employment rates.

Another mistake is bank bonuses. In the days before the Big Bang (deregulation of the financial markets in 1986), back when bankers were more trusted than the police, the NHS, and the press, UK merchant banks paid bonuses of around 3-4 per cent of a salary, while some firms only gave Christmas hampers as thanks.

In 1997 the city bonus pool hit £1 billion for the first time. Ten years later: £9bn, 4,000 bonuses of which reached above £1m, a few hundred over £5m, and twenty-odd over £10m. Even after RBS was bailed out, post-Libor scandal, bankers were paid bonuses of £7bn.

And here's another kick in the teeth: according to the figures from the Office for National Statistics, banks and insurers delayed about £700m of bonuses so as not to pay the 50p top rate of income tax.

This is where better control of banks is needed. In 2008 the Green New Deal Group argued that, in the face of economic collapse, government should not revert to type, hoping the market would fix things, but actively intervene. In their second report in 2009, The Cuts Won't Work, the group warned of complacency around freezes to inter-bank lending and the rise of high city bonuses.

Cash injections to save the world, bailouts to save the banks – these are all vindicated in theory as in practice. Quantitative easing was not able to save the country from unemployment, low wages, and low investment because in the following years we had a government that were ideologically committed to austerity. But none the less creating more money and spending more to save later should appeal.

The Green New Deal would be funded through tackling tax evasion and avoidance, a programme of Green Quantitative Easing would generate jobs and economic activity, investment would be made through bailed out banks at sustainable rates of interest, and buying out PFI debt using Green QE money would ensure no more money is wasted through it.

But where further? A local Green New Deal could fund regional and community banks which in turn invests in small and medium enterprises and lends to local people at reasonable rates of interest, putting out of business payday lenders, home creditors, and loan sharks who suck money out of the real economy and profit from people's debt.

Giving this kind of boost to high streets and local communities would provide more jobs, more money in people's pockets, and stop high roads becoming a miserable mix of pawnbrokers, betting shops, and empty fronts.

As opposed to the political status quo, the Green New Deal Group called for a Keynesian solution of more spending to meet economic crisis head-on. It feels vindicated in its decision and continues the same for today. Seeing this through at a national and local would do a great deal to improve on what this government has done so much to ruin.

Photograph: Getty Images

Carl Packman is a writer, researcher and blogger. He is the author of the forthcoming book Loan Sharks to be released by Searching Finance. He has previously published in the Guardian, Tribune Magazine, The Philosopher's Magazine and the International Journal for Žižek Studies.
 

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Northern Ireland's political crisis ups the stakes for Theresa May

Unionism may be in greater immediate danger in Belfast than Edinburgh.

 Sinn Féin have announced that they will not put forward a candidate for deputy first minister, and barring a miracle, that means today's 4pm deadline for a new power-sharing executive will come and go. What next for Northern Ireland?

While another election is possible, it's not particularly likely. Although another contest might change the political composition at Stormont a little, when the dust settles, once again, the problem will be that the DUP and Sinn Féin are unable to agree terms to resume power-sharing.

That means a decade of devolved rule is ending and direct rule from Westminster is once again upon us. Who benefits? As Patrick explains in greater detail, a period of direct rule might be good news for Sinn Féin, who can go into the next set of elections in  the Republic of Ireland on an anti-austerity platform without the distracting matter of the austerity they are signing off in the North. The change at the top also allows that party to accelerate its move away from the hard men of the north and towards a leadership that is more palatable in the south..

Despite that, the DUP aren't as worried as you might expect. For one thing, a period of devolved rule, when the government at Westminster has a small majority isn't without upside for the DUP, who will continue to exert considerable leverage over May.

But the second factor is a belief that in the last election, Arlene Foster, their leader, flopped on the campaign trail with what was widely derided as a "fear" message about the consequences of the snap election instead of taking responsibility for involvement in the "cash for ash" scandal. That when the votes were cast, the Unionist majority at Stormont was wiped out means that message will have greater resonance next time than it did last time, or at least, that's how the theory runs.

Who's right? Who knows. But for Theresa May, it further ups the stakes for a good Brexit deal, particularly as far as the Irish border is concerned. A lot of the focus - including the PM's - is on her trip to Scotland and the stresses on that part of the Union. It may be that Unionism is in greater immediate danger in Belfast than Edinburgh.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.