Green Investment Bank…..the shape of things to come?

Rumours abound that Alistair Darling will announce in the Budget a ‘Green Investment Bank’ which is something of an eye-catching proposal. This follows Ed Miliband, who is doing himself no harm if he wants to ingratiate himself with the left, hinting strongly that a ‘Peoples Bank’ will feature heavily in the Labour manifesto. Obviously we have decided to eschew regulation of current banking practices with subtle attempts to bring down the system ‘from within’.

Firstly, it’s worth saying of both proposals that regardless of their merits this should not be the case; that the ‘light Labour touch’ when it comes to the markets following its acceptance of the Blair/Giddens ‘Third Way’ has been shown to be desperately wanting in the current crisis. It’s a great irony of history that precisely now is the time for a radical, Labour critique of how things are and now that is at its most lacking.

Secondly, I have to say I prefer the proposal of Miliband to Darling when it comes to assessing their relative ‘radical’ merits. Typically, what we have from Darling is glorified PFI;

The green bank, designed to help finance projects such as railways, offshore wind power generation and eco-friendly waste management, will be half-funded from government asset sales with the remaining one billion pounds coming from the private sector.

“The high risk profile of these investments, which are in new and unproven technologies means an initial government investment is needed to draw in investors,” the source said.

It’s shameful to have to reiterate the limitations of the market and private finance time-after-time in reply to proposals from Labour ministers. Rhetoric bemoaning public service ‘wasteage’ would be much better directed against the monumental waste of time and money that is directed towards making leopards change their spots and to change the private sector into this benign social force.

One of the things about the enviroment as an issue is that it is something that most keenly (in its own distorted way) highlights the structural deficiencies of the system as it is (which is why right-wingers habitually argue passionately against climate change, for example, it disrupts the idea that capitalism is a brilliantly functioning system). So, while Darling’s proposal is a welcome step in a promising direction it’s worth looking under the surface and seeing how once again, ‘New Labour’, is behind the times in the solutions to problems it puts forward….

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About darrellgoodliffe

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2 responses to “Green Investment Bank…..the shape of things to come?”

  1. asquith says :

    You know, there already exist green banks such as Triodos, without any particular need for the state to set them up, just as there is a “People’s Bank” already with us, the Co-Op, which I transferred to because I was so enraged at bankers being bailed out & continuing to mock us.

    Reports show that thousands of people have made their own decision to head in this direction. Of course there is some place for government regulations & that but we mustn’t lose sight of the fact that a lot of work has to be undergone by consumers, who are of course a massive lobby on businesses, & in recent years have prompted companies to make quite real advances in animal welfare, sustainability etc.

    I see the main role of the state in this as enforcing standards, setting legal definitions & so on so that people who want, say an organic chicken or a bank that doesn’t invest in toxic waste or child soldiers can get that. They should certainly hold businesses to their own claims, which should have a legal definition. So if you outlined a form of bank regulation that should have existed prior to 2008 I might well agree, depending on the detail of what is said.

    But as you’ll remember, that leaves me a lot more sceptical of the activist government reflex than you’re going to be 🙂

    Mind you, I’m as infuriated as anyone that we apparently have little or nothing to show for the state’s stake in these here banks. If they are to be taken out of government hands, which they presumably will, they should definitely look at ways of reducing &/or mutualising them rather than just giving them back to the same areswipes who got them that way in the first place. Also the state is already involved in infrastructure, notably roads. So we’ll see.

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  2. darrellgoodliffe says :

    Asquith,

    I am aware those things exist and like yourself think they are wholly a good thing. I agree there needs to be regulation but in my eyes there also needs to be active intervention to ‘level-up’ as well. Agreed on most of what you say though like you say I am a lot more in favour of state action than yourself.

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