Just one thing: beef up the Green Investment Bank

If George Osborne does one thing today he should use the Green Investment Bank to create jobs and transform the economy. The collapse in private sector investment is the biggest single factor behind the UK's stagnation, with investment by firms down some £48bn from its 2008 peak.

And Britain's infrastructure is clapped out - Professor Dieter Helm has estimated that £500bn will be needed, over the next decade, to bring it up to international standards. Investment now in green infrastructure - from improved public transport to renewables - means new jobs and a future-proofed economy.

Bribes for the super-rich, like the expected reduction in the 50p tax rate, won't even begin to deliver this. Corporate profits have risen over the last year, but this hasn't led to greater investment - quite the opposite, with retained earnings by large companies at record levels. To meet the challenges, government has to take a lead. A fearful private sector won't do it alone.

Yet the government's flagship initiative, the Green Investment Bank, is a pathetic, stunted creature. It's not a bank - it has no powers to borrow. It has a £3bn cash pot - a tiny sum when set against the scale of the tasks ahead. It can only invest on strictly commercial terms. Granting the GIB the power lend and borrow, letting it invest in long-term projects, and beefing up its capital stock - perhaps through a part-merger with RBS - would turn it into a serious proposition, able to take a lead in major infrastructure projects and develop an expertise.

On current showing, the Chancellor's economic record is poor. His entire fiscal strategy boils down to an economically illogical and socially damaging commitment to austerity. If he can manage one valuable step, creating a Green Investment Bank worthy of the name should be it.

James Meadway is the senior economist at the New Economics Foundation

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David Cameron’s speech: a hymn to liberalism from a liberated PM

The Prime Minister spoke with the confidence of a man who finally has a full mandate for his approach. 

At every one of his previous nine Conservative conference speeches, David Cameron has had to confront the doubters. Those Tories who rejected his modernisation of the party from the start. Those who judged it to have failed when he fell short of a majority in 2010. Those, including many in his own party, who doubted that he could improve on this performance in 2015. Today, rather than confronting the doubters, he was able to greet the grateful. As the first majority Conservative prime minister for 18 years, he rightly savoured his moment. "Why did all the pollsters and pundits get it so wrong?" he asked. "Because, fundamentally, they didn't understand the people who make up our country. The vast majority of people aren't obsessives, arguing at the extremes of the debate. Let me put it as simply as I can: Britain and Twitter are not the same thing." Labour should pin that line to its profile. 

With a full mandate for his approach, Cameron went on to deliver his most unashamedly liberal speech to date. Early on in his address, he spoke with pride of how "social justice, equality for gay people, tackling climate change, and helping the world's poorest" were now "at the centre of the Conservative Party's mission". A lengthy section on diversity, lamenting how "people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names", was greeted with a standing ovation. Proof, if needed, of how Cameron has changed his party beyond recognition. The former special adviser to Michael Howard, who avowed that "prison works", told his audience that prison too often did not. "The system is still not working ... We have got to get away from the sterile lock-em-up or let-em-out debate, and get smart about this." From now on, he declared, the system, would "treat their [prisoners'] problems, educate them, put them to work." 

There were, of course, oversights and lacuna. Cameron reaffirmed his commitment to a budget surplus but glossed over the unprecedented, and many believe undeliverable, that will be required to achieve it (and which may fail to do so). He hailed the new "national living wage" with no mention of the tax credit cuts that will leave the same "strivers" worse off. His "affordable" starter homes will be unaffordable for average-earning families in 58 per cent of local areas. But it is a mark of Cameron's political abilities that it was easy to forget much of this as he spoke. Like George Osborne, he deftly appropriated the language of the left ("social justice", "opportunity", "diversity", "equality") to describe the policies of the right. Cameron is on a mission to claim ownership of almost every concept associated with Labour. The opposition should not sleep easily as he does so. 

There was little mention of Labour in the speech, and no mention of Jeremy Corbyn by name. But when the attack came, it was ruthlessly delivered. "Thousands of words have been delivered about the new Labour leader. But you only really need to know one thing: he thinks the death of Osama bin Laden was a 'tragedy'". The description of Corbyn as the "new Labour leader" shows the Tories' ambition to permanently contaminate the party, rather than merely the man.

There are plenty of potential landmines ahead for Cameron. The comically lukewarm applause for his defence of EU membership was a reminder of how divided his party is on this issue. But today, he spoke as a man liberated. Liberated by winning a majority. Liberated by not having to fight an election again. Like a second-term US president, he was able to speak of how he was entering "the second half of my time in this job". Tributes to Osborne (the "Iron Chancellor) and Boris Johnson (greeted with a remarkable standing ovation) alluded to the contest to come. But whoever succeeds him can be confident of assuming a party in good health - and more at ease with the modern world than many ever thought possible. 

George Eaton is political editor of the New Statesman.