The crisis remains an investment crisis

investment, pic by 123rf.comPrior to the recent G20 meeting leading international economic bodies such as the IMF and the OECD made tentative calls for increased investment, although this was often confused with increased spending. This is a belated or partial recognition of the real source of the crisis in the advanced industrialised countries. In terms of actual changes to policy it seems to have made no impact at the G20 whatsoever.

As the world economy is once more slowing and there are again a series of spurious explanations offered for this, it is worth revisiting the actual causes of the ongoing crisis which first became widely apparent in 2007. In this piece the advanced industrialised countries as a whole will be the reference point, using aggregate data for the OECD. But each individual economy within the OECD simply provides its own unique combination of these common factors, including Britain. Continue reading

Labour’s economic alternative should centre on a national investment bank

investment, pic by 123rf.comLabour is now carrying out extremely effective campaigning against Tory policies – on tax credits, on the sweetheart Google taxation deal, in support of the junior doctors and pinning the responsibility for the crisis in the NHS squarely on the Tories. This excellent work needs to continue and be strengthened.

But in the forthcoming budget Labour must also set out the framework for a comprehensive macro-economic alternative to Osborne’s austerity. This article argues why the centre piece of this should be to reinforce the existing pledge to increase infrastructure investment with the establishment of a National Investment Bank. Continue reading

Demand doesn’t create its own supply – a national investment bank is needed

investment, pic by 123rf.comThe second [pillar of my leadership] is a new economy that puts public investment front and centre stage: in science, technology and the green industries of the future. Instead of Osborne’s economic house built on sand, our focus will be on the reindustrialisation of Britain for the digital age, driven by a national investment bank as a motor of modernisation – and sustainable growth that will slash the welfare bill in the process”

So says Jeremy Corbyn writing in the Guardian. The economic policies of John McDonnell and Jeremy Corbyn are blowing away some of the accumulated cobwebs of British post-World War II economic policy. Almost literally, they are a breath of fresh air. Continue reading

More than platitudes needed to restore our manufacturing base

We live in a deeply divided country. The gaps between wealth and poverty have never been so pronounced.

We live in a country where financial speculators who gamble with our economy are rewarded with excessive incomes many of us could not make in a life-time.

Our economy, politics and public investment are all tailored towards maintaining an over-reliance on the financial sector of the City of London. This has led to vast regional inequality, with Britain being home to nine out of ten of Northern Europe’s poorest regions. Continue reading

Ed Miliband is right, Britain lacks local banks – RBS could fill that void

Why not convert a large, publicly owned bank into a network of local banks like those that operate successfully in Germany? Ed Miliband’s speech to the British Chambers of Commerce marked an important step towards filling a vital gap in our banking system – the place where you live.

The UK banking system, dominated by a handful of national and international banks, is highly unusual internationally. Many of our industrial competitors, including Germany, France, Switzerland, Canada and the US, have a diverse range of successful financial institutions in their economies. Crucially, they all have financial institutions that are wedded to their local area. The Labour leader has now come out in favour of a new UK network of local banks, which would finally give British small businesses and local communities the sort of financial services enjoyed in other countries.

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