North of England rail investment plans. The Government released its Integrated Rail Plan for the North and Midlands last week, a proposal for £96bn in rail spending covering HS2, Northern Powerhouse Rail and Midlands Rail Hub. However previously announced plans for the first two were significantly cut (Guardian summary here), with the eastern leg of HS2, formerly due to go to Leeds and Sheffield, now to terminate in the East Midlands; and the Leeds-Manchester high speed line (via Bradford) abandoned altogether. The Government justified the cuts by saying that the new plans would enable more local services to be upgraded, with the benefits arriving sooner.
The missing money. The Northern Powerhouse Partnership calculates that the overall saving from downgrading the pledges on HS2 and NPR is £14 billion. Watch ITV’s Anushka Asthana explain the Northern Powerhouse Partnership’s analysis of the cuts.
Sunak’s investment cap. The New Statesman’s Stephen Bush blamed “Rishi Sunak’s self-imposed straitjacket on infrastructure spending” for the cuts, with the Chancellor in his Budget capping investment spending at 3% of GDP. The Independent reported that the Integrated Rail Plan “became a battleground to control spending by Rishi Sunak’s Treasury”. But Tim Pitt, former advisor to two Conservative Chancellors, argued that “Treasury hawkishness” was not to blame. He emphasised other constraints on investment spending, such as supply constraints and value for money.
Social care funding. The Commons narrowly voted to accept the Government’s amended £86,000 cap on lifetime care costs, which will mean households with only £100,000 in assets lose almost all of them while richer households retain most of their wealth (BBC infographic here.) Sir Andrew Dilnot, author of the Government’s social care review in 2011, said that the new rules would not address the “catastrophic costs” of social care for the less well off.
Reforming immigration and NHS charging. IPPR’s Marley Morris and Shreya Nanda published a report calling for reform to the system of charging migrants for healthcare. The report highlights the adverse impacts of the NHS charging system and draws on best practice from other European countries that have fairer systems for residents without immigration status.
Disabled claimants take the DWP to court. A group of benefit claimants have taken a judicial review case to the high court to argue that the decision to not extend the £20 per week uplift to Universal Credit to those on legacy benefits was discriminatory, as over a million disabled people lost out.
A radical CBI? Tony Danker, Director General of the CBI, gave a speech to its annual conference dubbed as a “damning critique of free-market capitalism”. It exemplifies the new consensus (though not in the Government) around the importance of state intervention and industrial strategy. Danker noted that “we’ve had five decades where the free market has palpably failed” and called for a “partnership with government.”
UK’s first freeport opens in Teeside. The UK’s first Freeport opened on Teeside, with 7 more to follow in England. Read Tax Justice UK’s Tom Peters’ piece on the “false promise” of freeports which risk “signing away sustainable local development for a reheated Thatcherite race to the bottom”.
Cambo and tax havens. Siccar Point Energy, a private equity-backed firm behind the proposed Cambo oilfield, is not forecast to pay taxes for many years because of favourable UK tax rules and a tax loophole in Luxembourg, as Diarmid O’Sullivan explains.
Plenty of headroom to invest in climate action. Commenting on the latest ONS figures on the public finances, NEF’s Frank van Lerven explains why low debt servicing costs enable “more headroom for borrowing to bring the economy to full output capacity by supporting the low-carbon transition and well-paid green jobs.”
Green competition policy in the EU. The European Commission has altered its state-aid rules to incentivise companies to decarbonise. The changes mean that “negative externalities” will become a criterion for refusing to grant state aid subsidies for private companies, and it will be easier to succeed “for the acquisition of zero/low carbon emission vehicles and for investments in the related recharging and refuelling infrastructures”.
What is the appropriate policy response to persistent inflation? After last month’s inflation figures from the ONS showing average prices rising at their fastest rate in 10 years, some economists, such as the FT’s Martin Wolf, have started to worry that inflation is not transitory after all. The FT’s Martin Sandbu disagrees, explaining why “inflation panic-mongers should not declare victory” as bottlenecks are beginning to ease in areas such as semiconductors as “supply is expanding because the demand is there”. NEF’s Alfie Stirling explains in one chart why inflation is not being driven by sustained domestic pressure and why more needs to be done to boost incomes and address the cost of living.
“We’re going back into a world of aristocracy. Capitalism’s over.” The New Statesman profiled Gary Stevenson, an economist and city trader who became a multimillionaire betting interest rates would never rise after the 2008 financial crisis and is now a campaigner for equality.
Private equity and monopoly power. Nick Shaxson explained "how finance drives monopoly" in the Counterbalance’s latest newsletter, looking at debt-fuelled private equity’s role in buying out companies across the UK economy and how to stop it.
Unlocking the financial levers for a local just transition. CLES’s Antonia Jennings and Ellie Radcliffe hosted a workshop exploring how to finance “locally-owned climate-related initiatives that deliver social value for communities” through community municipal investments, untapped local finance and national funding streams.
Social and political change. A new report from the IPPR and Runnymede Trust looks at the success and failure criteria of four social movements over recent decades. It finds that successful movements need ‘reformers’ inside and outside of government to create a language and policy agenda that mainstream voters, media and political parties can adopt. ‘Rebels’ are still valuable by increasing the salience of an issue and changing power dynamics, but they rarely deliver the change they are demanding. IPPR’s Harry Pilter-Quinner discusses the findings in relation to the climate movement.
Conservatives and the climate movement. Environmentalist George Monbiot wrote a Twitter thread arguing that the climate movement should not appeal to conservatives in rich countries, as the notion of climate justice is “fundamentally at odds with the conservative mindset”. Sam Hall, head of the Conservative Environment Network, disagreed, arguing that “securing the consent of the largest political constituencies within those countries” is critical for decarbonising wealthy countries and increasing climate finance to poorer countries.
For and against the Green New Deal. In his Guardian column Aditya Chakrabortty attacked the concept of the Green New Deal as “muddled, top-down, technocratic and unworkable”, and argued for “a more focused, locally rooted and inclusive politics based around asking people what they actually need in their lives, and working out how to fit those things within an environmental framework.” James Meadway responded, defending the concept and stressing the need for state-led (and global) policy as well as local initiatives.
Reframing the costs of net zero. A new peer-reviewed paper by Alexandre Köberle and colleagues looks at how climate mitigation costs have been developed and illustrates how better presentation can reframe climate action as a way to increase economic welfare, rather than on its losses in public policy debates. (Twitter thread summary)
Carbon removal. Political ecologist Wim Carton and colleagues explained the problems of relying on a market-led approach to carbon removal in net zero pledges.
The market cannot solve the climate crisis. Economic historian Adam Tooze criticised the market-led approaches to tackling climate change on offer at COP26: “At this point those promising trillions in private funding to fight the climate crisis reveal themselves to be the true utopians, just utopians of a neoliberal variety.” Instead, Katie Gallogly-Swan and Rebecca Ray argued that world leaders “must recognise that only public purpose, not private profit, can tackle interconnected global crises”.
Is the UK post-neoliberal yet? PEF Council member Stewart Lansley questioned recent commentary that “British politics is undergoing a post-neoliberal shift” following the reflationary Autumn Budget, quoting free-market economist Robert E Lucas: “we are all Keynesians in a foxhole”. Lansley argues that a post-neoliberal politics would be signalled by more support for a fairer social security system and less wealth inequality on the centre-right.