We need a greener way of banking. Photo: Flickr/Ryan Hyde
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Caroline Lucas: We need to invest in a positive, green and socially just future

The Green MP lays out her proposal for green infrastructure quantitative easing.

Next week the Conservatives will present their first Budget as a majority Government.

The context is grim.

Progress on child poverty, surely a bellwether for good government, has stalled – with one in six children living in poverty. And when we consider how the Government is doing when it comes to keeping children warm in their homes, things look just as bad.  Last year, 2.23 million children in England were living in fuel poverty, whilst an estimated 65 people a day die in the UK in winter as a result of illnesses due to cold homes.

Added to these shocking figures is the fact that so-called improvement in our economy remains extraordinarily skewed towards London and the South East, with Government figures showing that almost 40% of the UK’s economic activity is happening in just those two regions. The jobs that have been created in recent times are, all too often, short term and insecure.

Some parts of the forthcoming Budget, like the £12 billion cuts to social security spending, we already know about. The other announcements, which will trickle out over the next few days, will no doubt also serve to lock the country into further austerity and bring our public services ever closer to breaking point.

Ministers know that alternatives do exist.

One such alternative offers a route to rebuilding our economy, tackling climate change, and providing decent long terms jobs in every city, town and village across the UK.

It’s known as Green Infrastructure Quantitative Easing (GIQE), a concept first proposed by the Green New Deal Group and an idea that, if you can get past its unappealing name, basically means investment in a positive green and socially just future.

GIQE could contribute to strengthening the UK economy via a carefully costed, nationwide programme to train and employ a ‘carbon army’. This army would be at the frontline of the fight against cold homes by making all of the UK’s 30 million buildings energy efficient, and, where feasible, fitted with solar panels. This would, in the first instance, dramatically reduce energy bills and fuel poverty, whilst also cutting greenhouse gas emission and cutting current dependence on imported energy.

Secondly, a GIQE programme could also help tackle the housing crisis by financing the construction of new affordable housing that’s highly energy efficient and built predominantly on brownfield sites.

Thirdly, GIQE could help finance improved regional public transport networks to help revitalise local and regional economies. That’s more and better buses, trains and coaches, helping people to get around their communities and stay connected.

Quantitative Easing is already back on the global economic and political agenda. The growing threat of deflation has meant that Japan has reintroduced QE, and the European Central Bank has begun its own programme to deal with the serious economic problems of the Eurozone.

Here in the UK, our export markets face global threats that include a slowdown in the US and Chinese economies plus the financial fragility of the Eurozone – compounded only this week by the ongoing crisis in Greece.

Moreover, domestic economic difficulties, including inadequate tax revenues, a deficit that is likely to prove to be stubbornly high and the spectre of deflation - none of which are encouraging consumers to spend or business to invest- mean the time is ripe for a new round of QE.

The scope of the GIQE energy efficiency initiative would be huge – and ambitious: There are around 28 million dwellings and 2 million commercial and public sector buildings in the UK. But we should be ambitious – on behalf of the unemployed who needs jobs, the families who need affordable housing and the climate that needs our protection.  It has been estimated that nearly £500bn of investment in new low-carbon infrastructure is required over the next 10 years, of which £230bn will be required for energy efficiency alone. A ‘Green Infrastructure QE’ programme would likely cost £50 billion a year over the next ten years.

To put this into context, between 2009 and 2012 the Bank of England e-printed £375 billion of conventional QE, at an average of £125 billion per year.

This was the equivalent of over £6,000 for every man woman and child in the UK. Yet this considerable sum of money mostly benefitted the banks and investors by inflating house prices, the stock market and commodities. It had very little impact in terms of generating real economic activity on the ground or delivering concrete social and environmental benefits. Green QE is designed to achieve far more – targeted far more effectively.

The actual mechanism is relatively straightforward. The Bank of England would e- print tens of billions of pounds annually, as it did during the last round of QE, and a considerably enlarged publicly owned Green Investment Bank (GIB) would issue investment bonds to be bought by this QE programme. This would effectively leave the money required to fund green investment both debt and interest free, in the hands of the Green Investment Bank (GIB)[iii], to be invested over a realistic time scales and so be non-inflationary.

Mark Carney, the Governor of the Bank of England, is on record in a letter to me saying that, if the government requested it, a next round of QE could be used to buy assets other than government debt – thus clearing the way for the kind of ambitious green infrastructure programme we urgently need.

Since QE involves the central bank putting new money into circulation, by creating e-money and using it to buy assets, this programme will not increase the UK’s repayable debt levels. Professor Werner, Director of the Centre for Banking, Finance and Sustainable Development at the University of Southampton, and the creator of the quantitative easing concept, explains that since the central bank can simply keep the assets on its balance sheet, there is no need for taxpayers to repay this debt or for it to be considered as an expansion of public debt.

Indeed, this is completely consistent with the most recent UK quantitative easing programme. This saw the Bank of England, which is owned by the UK government, buy UK government debt in the form of gilts. The net result is that one arm of the government ends up owing debt to another arm of the government. If accounted for like a commercial enterprise this debt would, as a result, show as cancelled because you cannot, of course, owe yourself money. This is precisely why George Osborne could cancel the interest payments on the £375 billion of gilts held under his previous quantitative easing programme.

In the case of GIQE, bonds issued by the Green Investment Bank will never need to be repaid. This means that the GIB will in turn not need to demand repayment of the loans they grant to local authorities and others to fund green investment.

One further and crucial benefit of GIQE is that it would increase the tax by increasing the number of people in well-paid employment in the UK. This in turn would have benefits for deficit reduction, contributing to that all important confidence that’s needed to unlock additional private funding from pension and insurance companies, through to individual savers.

Taken together, this all adds up to providing the scale of long term investment required to create the sustainable economy the UK needs. GIQE could achieve all this and it would do so while benefitting every single part of the UK.

GIQE is ambitious, because it has to be. The status quo – of an economy that fails to lift children out of poverty and sees older people die in their homes because of the cold – is a resounding failure.

It’s not just the Government who should look closely at the significant benefits of Green Infrastructure QE. The Labour Party, so short of fresh thinking in recent years, should be closely examining this proposal too. Labour leadership candidates must answer a simple question: if not this, then what? We need a plan to create jobs in every constituency across Britain – I hope those candidates will join me in making the argument for a fairer, greener economy fit to serve all of us for years to come.

Britain needs more decent jobs. We need a credible plan of action on climate change. We need bold action to tackle the housing crisis. It’s time that both the Government and the Opposition, rather than continuing to hand money over to the banks as they have done since the financial crisis, will seriously consider this plan to build a resilient economy, protect our shared environment and create thousands of new well paid jobs.

Caroline Lucas is the MP for Brighton Pavilion.

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"We repealed, then forgot": the long shadow of Section 28 homophobia

Why are deeply conservative views about the "promotion" of homosexuality still being reiterated to Scottish school pupils? 

Grim stories of LGBTI children being bullied in school are all too common. But one which emerged over the weekend garnered particular attention - because of the echoes of the infamous Section 28, nearly two decades after it was scrapped.

A 16-year-old pupil of a West Lothian school, who does not wish to be named, told Pink News that staff asked him to remove his small rainbow pride badge because, though they had "no problem" with his sexuality, it was not appropriate to "promote it" in school. It's a blast from the past - the rules against "promoting" homosexuality were repealed in 2000 in Scotland, but the long legacy of Section 28 seems hard to shake off. 

The local authority responsible said in a statement that non-school related badges are not permitted on uniforms, and says it is "committed to equal rights for LGBT people". 

The small badge depicted a rainbow-striped heart, which the pupil said he had brought back from the Edinburgh Pride march the previous weekend. He reportedly "no longer feels comfortable going to school", and said homophobia from staff members felt "much more scar[y] than when I encountered the same from other pupils". 

At a time when four Scottish party leaders are gay, and the new Westminster parliament included a record number of LGBTQ MPs, the political world is making progress in promoting equality. But education, it seems, has not kept up. According to research from LGBT rights campaigners Stonewall, 40 per cent of LGBT pupils across the UK reported being taught nothing about LGBT issues at school. Among trans students, 44 per cent said school staff didn’t know what "trans" even means.

The need for teacher training and curriculum reform is at the top of campaigners' agendas. "We're disappointed but not surprised by this example," says Jordan Daly, the co-founder of Time for Inclusive Education [TIE]. His grassroots campaign focuses on making politicians and wider society aware of the reality LGBTI school students in Scotland face. "We're in schools on a monthly basis, so we know this is by no means an isolated incident." 

Studies have repeatedly shown a startling level of self-harm and mental illness reported by LGBTI school students. Trans students are particularly at risk. In 2015, Daly and colleagues began a tour of schools. Shocking stories included one in which a teacher singled out a trans pupils for ridicule in front of the class. More commonly, though, staff told them the same story: we just don't know what we're allowed to say about gay relationships. 

This is the point, according to Daly - retraining, or rather the lack of it. For some of those teachers trained during the 1980s and 1990s, when Section 28 prevented local authorities from "promoting homosexuality", confusion still reigns about what they can and cannot teach - or even mention in front of their pupils. 

The infamous clause was specific in its homophobia: the "acceptability of homosexuality as a pretended family relationship" could not be mentioned in schools. But it's been 17 years since the clause was repealed in Scotland - indeed, it was one of the very first acts of the new Scottish Parliament (the rest of the UK followed suit three years later). Why are we still hearing this archaic language? 

"We repealed, we clapped and cheered, and then we just forgot," Daly says. After the bitter campaign in Scotland, in which an alliance of churches led by millionaire businessman Brian Souter poured money into "Keeping the Clause", the government was pleased with its victory, which seemed to establish Holyrood as a progressive political space early on in the life of the parliament. But without updating the curriculum or retraining teaching staff, Daly argues, it left a "massive vacuum" of uncertainty. 

The Stonewall research suggests a similar confusion is likely across the UK. Daly doesn't believe the situation in Scotland is notably worse than in England, and disputes the oft-cited allegation that the issue is somehow worse in Scotland's denominational schools. Homophobia may be "wrapped up in the language of religious belief" in certain schools, he says, but it's "just as much of a problem elsewhere. The TIE campaign doesn't have different strategies for different schools." 

After initial disappointments - their thousands-strong petition to change the curriculum was thrown out by parliament in 2016 - the campaign has won the support of leaders such as Nicola Sturgeon and Kezia Dugdale, and recently, the backing of a majority of MSPs. The Scottish government has set up a working group, and promised a national strategy. 

But for Daly, who himself struggled at a young age with his sexuality and society's failure to accept it, the matter remains an urgent one.  At just 21, he can reel off countless painful stories of young LGBTI students - some of which end in tragedy. One of the saddest elements of the story from St Kentigern's is that the pupil claimed his school was the safest place he had to express his identity, because he was not out at home. Perhaps for a gay pupil in ten years time, that will be a guarantee. 

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