planB

Rebuilding Britain and a Good Society

PLAN B

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Compass

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+ 1

Howard Reed

About CompassCompass is an ideas and action based pressure group with over 50,000 members and supporters around the country.

We are committed to help build a Good Society; one in which there is far greater social, political and economic equality; where democracy is deepened at every level of the state, our workplaces and communities; where the sustainability of the planet is made an urgent priority and we recognise our interconnected fate across all nations; a society where the market is made to work as the servant of society.

We organise regular events and conferences that provide real space to discuss policy, we produce thought provoking pamphlets and we encourage debate through our website. We campaign, take positions and lead the debate on key political issues. We’re developing a coherent and strong voice for those that believe in greater equality and democracy as the means to achieve radical social change.

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1 | www.compassonline.org.uk

PLAN B + 1Rebuilding Britain and a Good Society

Howard ReedDecemBeR 2012

AcknowledgementsThank you to the Andrew Wainwright Reform Trust who generously continue to fund our work on political economy.

Thanks go to Colin Hines for help with the Birmingham case study in Section 3 and David White for help drafting the letter in section 4.

As ever, thank you to the Compass members and supporters who make everything we do possible.

About Plan BThis document was produced in partnership with the Friedrich Ebert Stiftung (London) and we’re incredibly thankful for their ongoing support.

About the AuthorHoward Reed is Director of the economic research consultancy Landman Economics, which special-ises in complex econometric modelling work and policy analysis. In addition to co-editing last year’s original Plan B report with Neal Lawson, Howard’s recent projects include Where the Money Goes (with Tim Horton of the Fabian Society), funded by the TUC and UNISON, which looked at the distributional impacts of the spending cuts announced by the coalition government in the 2010 spending review, In the Eye of the Storm funded by the NSPCC, Action for Children and the Children’s Society which looked at the distributional impact of Coalition Government policies on families with children, and Where Have All the Wages Gone? (with Jacob Mohun Himmelweit) which looked at the decline in wages as a share of national income in the UK over the last three decades. His recent work also includes a Touchstone report Fairness and Prosperity, which looked at the potential for a more equal distribution of income to improve the UK’s economic performance. Other recent clients for Landman Economics research include Action on Smoking and Health (ASH), Oxfam and the Welsh Government.

Plan B + 1 | 3

contents

Foreword by Neal Lawson 4

Introduction 5Plan A: The unfolding of a British economic disaster 6The failure of “Plan A Plus” 11Plan B: The priorities for action now 14Persuading the public 18Conclusion 19

Endnotes 20


Foreword

Britain’s economy is going seriously wrong. The impact on people’s lives and businesses could not be more profound. At the same time the political reality, despite the wishes of some, is that the Coalition Government looks like it will last the full term. That means it has another two and a half years to determine the course of the the economy. But the perilous state of the economy should take us beyond the blame game of daily politics. In this moment of crisis, what matters is what works. The question is therefore what can get Britain growing again in a fair, sustainable manner? What will tempt businesses to invest and get people back into work, earning more, spending again and paying taxes? In doing so, how can we speed up the transi-tion to a sustainable and fair economy? By fair, we mean polices that will close the shocking income, wealth and opportunity gap in Britain. By sustain-able we mean economic activity that reduces the throughput of raw materials and the output of carbon emissions.

It doesn’t matter what the plan is called, who proposes it or who gets the credit. What matters is that decision makers and influencers recognise that we are not in a good place. Gerard Lyons, Chief Economist at Standard Chartered Bank outlines our current direction clearly: “Cut. Economy shrinks. Firms don’t spend. People can’t. Debt dynamics worsen. So Cut”.1 We have to get out of this vicious cycle.

Of course getting George Osborne to shift will not be easy – but shift he must. It will take a broad coalition working in the long-term interests of the country to manoeuvre him and the govern-ment into a different position. We show in this report that one year on from the publication of the original Plan B, not only do the facts paint a clear picture but such a coalition for an alter-native is taking shape that is either predicting unnecessarily prolonged gloom and/or the need for active state intervention to get the economy moving again. This emerging coalition includes:

�� Confederation of British Industry�� The International Monetary Fund�� Mark Carney, the next Governor of the Bank

of England

�� EEF, the manufacturers’ organisation�� The National Institute of Economic and

Social Research�� McKinsey & Company�� Rachel Lomax, former Deputy Governor of

the Bank of England �� Martin Wolf, Financial Times�� The Aldersgate Group�� The British Chambers of Commerce�� Trades Union Congress�� Lord Heseltine, author of No Stone Unturned

in the Pursuit of Growth �� Adam Posen, former member of the Bank of

England Monetary Policy Committee

These are just some of the organisations and individuals that know we have to try something else, something better. Now is not the time for political point scoring or posturing, but rolling up our sleeves, finding out what’s happening, why our current policy path isn’t working and why – and charting the right course for the British economy. Indeed, it can be said that none of the mainstream political parties have a sufficient policy programme to get Britain working again in a way that is genuinely sustainable and fair. Furthermore, the whole crisis can be explained by both market and state failure – neither have done their job properly.

The Conservative Party has always survived and thrived when it has adapted to the real world around it. It must adapt again on the economy – only this time with some urgency. They are already starting to shift ground; they are investing £77m more in tax collection and £5bn more in capital spending was announced during the Autumn Statement. It’s just a shame they are cutting other public spending to fund it.

We call on the Government to host a new year summit of all the experts and interested parties to examine what is going wrong, understand why and begin to plot a new economic path that can be unveiled in the budget. Sooner or later different policy options will have to be tried, the only question is when. Politics and sectional interest cannot be allowed to act as barriers to a new direction. Let’s prove that we are all in this together.

Plan B+1 explains why this coalition is taking shape and what more needs to be done to rebuild Britain’s economy in a way that is truly sustain-able and fair.

Neal Lawson, Chair, Compass

4 | www.compassonline.org.uk Plan B + 1 | 5

Introduction

In the June 2010 ‘Emergency Budget’2, the Chancellor of the Exchequer, George Osborne, set out the Coalition Government’s Plan A – an attempt to eliminate the “structural deficit” of £110 billion (over 7 per cent of GDP) in the UK’s public finances in five years – with 77 per cent of the fiscal gap to be closed through spending cuts rather than tax rises. Compass’s initial verdict was that this “£100 billion gamble”3 risked under-mining the nascent recovery from the worst recession since the 1930s which had begun in the last 18 months of Gordon Brown’s Labour Government.

A year later, as the evidence of the Coalition’s economic problems was beginning to mount, Compass published a response to Osborne’s insistence, during that Emergency Budget statement, that there was “no plan b”. Plan B4

criticised the Coalition Government’s “economic sado-masochism” and argued that “in short, it looks increasingly likely that a severe economic slowdown – in the worst case, a double-dip recession – is going to be upon us in 2012, wrecking the prospects for Plan A. Indeed, Plan A is making a double-dip considerably more likely than would otherwise be the case.”5

A year on from Plan B, we take no pleasure in noting that the double-dip recession has come to pass – and, worse, that there is an increasing like-lihood of a triple-dip as the Coalition’s austerity measures continue to diminish the prospects for sustainable growth. As the evidence mounts that George Osborne’s strategy isn’t restoring the economy to health, but is inflicting unneces-sary and long lasting damage to our social and economic fabric, pressure builds for an alterna-tive approach. Plan B: A good economy for a good society outlined a starting point for “a new economic paradigm… that will prioritise fairness over greed, the needs of productive capital over finance capital, the long term over the short, and the needs of the people and the planet over the excessive and undeserved profits of the few”.6

Twelve months on it is time to review progress and set out a new agenda to get the economy moving.

Plan B+1 has three sections. Section 1 assesses the true scale of the failure of Plan A; economic stagnation, stubbornly high budget deficits, rising debt, and increased inequalities. Section 2 looks at “Plan A plus” - the policies which the Coalition Government has been attempting to implement as alternatives to Plan B, and finds that none of them have worked particularly well. Section 3 provides an update of Plan B for the state which the UK finds itself in, halfway through the austerity parliament. Rather than restating the prescription of twelve months ago, the focus is on the key policy priorities to kick-start a fair and sustainable recovery. Finally, in Section 4 we look at how to persuade the public that a new course has to be set for the economy.


Section 1Plan A: the unfolding of a British economic disaster

This section demonstrates that Plan A is failing even on its own terms – and is creating an unprecedented economic disaster in the UK.7

cutting to stand still: the non-disappearing deficit

The key test of the effectiveness of Plan A on its own terms is whether the deficit is falling – and if so, how fast. Table 1 shows Public Sector Net Borrowing (PSNB) as a percentage of UK Gross Domestic Product (total output), comparing three sets of figures:

�� The Office for Budget Responsibility (OBR)’s initial forecast in June 2010 before the Emergency Budget – labelled “Labour plans” as the forecasts were based on the fiscal plans of the Labour Government which left office in May 2010. �� The OBR forecasts published at the time

of the June 2010 Emergency Budget which show the effect of George Osborne’s policy announcements on the forecast plans. �� The forecasts published in the December

2012 Autumn Statement which give the most up-to-date assessment from the OBR.

The initial Labour plans to close the deficit (often referred to as the “Darling Plan” after

Alistair Darling, Chancellor of the Exchequer from 2007 to 2010) assumed a reduction in the PSNB from 11.1 percent of GDP in 2009/10 to 6.6 percent of GDP in the current fiscal year, 2012/13. This would have been a fall of around two-fifths in the total size of the deficit. The plans announced in the June 2010 Budget were for a quicker tightening – for the deficit to be halved by 2012/13 (from 11% of GDP to 5.5%). But instead, the projected outrun for 2012/13 in the December 2012 Autumn Statement forecasts is that the deficit will be 6.9% – over £20 billion worse than forecast in the June 2010 Budget, and around £5 billion worse than the plans set out by Alistair Darling before the 2010 election.

Labour had planned £42 billion of spending cuts and tax rises during the 2011/12 and 2012/13 tax years. The tax and spending plans announced by George Osborne in the June 2010 Budget and the Autumn 2010 Spending Review added £22 billion of austerity measures by 2012/13 on top of the Labour plans. And yet, despite all this extra austerity, the deficit is closing much more slowly than was forecast in the June 2010 Budget. George Osborne does not now expect the UK economy to achieve “cycli-cally adjusted budget balance” – i.e. eliminating the ‘structural’ deficit in the public finances – until 2018, three years later than originally planned. This is worth emphasising: Two and a half years after the Coalition took office, its central self-appointed aim of closing the “struc-tural deficit” is further away than when it first came to power! At this rate, we can expect that by 2015, the aim will be to close the structural deficit by 2021.8

Table 1. PSNB outruns and forecasts, 2009-2016 (% of GDP): 2010 OBR forecasts compared with 2012 OBR forecasts

Forecasts 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Labour plans 11.1 10.5 8.3 6.6 5.0 3.9

June 2010 Budget 11.0 10.1 7.5 5.5 3.5 2.1 1.1

Dec 2012 Statement 7.9 6.9 6.1 5.2 4.2

Source: Labour plans - Office for Budget Responsibility Pre Budget Forecast, June 2010. June 2010 Budget – OBR, Economic and Fiscal Outlook, June 2010. Dec 2012 Statement – OBR, Economic and Fiscal Outlook, December 2012.


The economic consequences of austerity

The main reason why the deficit has failed to close anything like as fast as the Coalition Government thought it would is that the economy has performed much worse than anticipated in June 2010. Figure 1 shows the OBR forecasts for UK Gross Domestic Product set out in the June 2010 Emergency Budget and compares them with the GDP outcomes and forecasts in the December 2012 Autumn Statement. In June 2010, the OBR forecast that by the end of the 2012/13 tax year, UK real GDP would be 7.8 percent higher than in 2009/10. By December 2012 the OBR were forecasting that GDP would be 2.5 percent higher than in 2009/10 – a shortfall of 4.7 percent, or around £75 billion at 2012/13 prices, compared with the June 2010 forecast. Even more worry-ingly, most of the 2.5 percent increase in real GDP occurred in the 2010/11 fiscal year – the first year of Coalition Government, when only minor spending cuts and tax increases were made. In 2011/12 and 2012/13, as spending cuts and tax increases began to bite, the economy grew only 0.6 percent in total. If growth in the next two fiscal years – 2013/14 and 2014/15 – is only as strong as growth in the last two fiscal years, this would mean that output would be around 10 percent lower by the time of the

2015 election than was forecast in the June 2010 Budget. In April 2012 prices that would be a shortfall of around £160 billion. Assuming that the long-run average ratio of tax to GDP in the UK economy is around 40 percent, this means that – if we were to assume that the shortfall in GDP is entirely a consequence of austerity – tax receipts will be around £64 billion lower by the 2015 election than they would have been in the absence of the austerity measures. This is equal to around half of the entire fiscal consolidation between 2010-11 and 2015-16.

multiplier mania

So why has it gone so wrong? One important answer can be found in the central debate over the wisdom of austerity in the current global economic depression. Key to this is the “multi-plier” – the extent to which fiscal tightening has knock-on effects on output. If the multiplier is 1, then a reduction in the budget deficit of 1% of GDP reduces output by 1%.9 The size of the multiplier is a crucial determinant of whether the kind of austerity measures imposed by the Coalition are a good idea or not. As the respected economist (and director of the National Institute for Economic and Social Research) Jonathan Portes pointed out in a blogpost in October

100

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2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Rea

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P (2

009/

10 =

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)

Fiscal Year

Jun-10

Dec-12

Figure 1: OBR Economic growth projections at June 2010 Budget, and comparisons with December 2012 Autumn Statement

Source: Office for Budget Responsibility, Economic and Fiscal Outlook June 2010 and December 2012.


201210, in the summer of 2010 debate over the size of the multiplier essentially fell into three camps:

�� One group of economists and policy-makers – the “austerity fetishists” -argued that the multi-plier was zero, or possibly negative; that is, that large-scale spending cuts and tax rises would have no impact on GDP growth – or perhaps even increase GDP growth by boosting business confidence and shrinking the “unproductive” public sector of the economy. (In the UK, this group included most of the Conservative Party and the right wing ‘Orange Book’ Liberal Democrats most enthusiastic for the current Coalition Government.)�� The mainstream view in economic commen-

tary was that the UK would be able to “grin and bear it” over the five year time horizon for austerity – in this view, the multiplier was positive, but relatively small. This was the view of the Office for Budget Responsibility, which used multiplier estimates for spending cuts and tax increases as follows:

• Capital spending reductions: 1.0• Other spending reductions: 0.6• VAT rises: 0.35• Other tax rises: 0.3

It was also the main stated view of the International Monetary Fund and NIESR, as well as centrist Liberal Democrats and the likes of the Progress grouping in the Labour Party. �� A third view, articulated by the economists

Paul Krugman and Brad de Long in the United States, and by the authors of Plan B in the UK (as well as other respected commen-tators such as Martin Wolf of the Financial Times) was that in the current environment of economic depression, with interest rates close to zero (and hence the effectiveness of monetary policy as a counter-cyclical policy exhausted), multipliers were likely to be substantial. This is the view that the IMF and NIESR have now shifted to in the last three months as a result of new research on the size of multipliers since the onset of the Great Recession.11

The evidence on the (lack of) growth since the Coalition Government’s austerity measures began to ‘bite’ in early 2011 strongly suggests that multipliers have risen over the period. Respected macroeconomist Duncan Weldon of the TUC has recently calculated the growth rate for each fiscal year between 2010/11 and 2015/16 which would be implied by a multiplier of 0.9, 1.3 and

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

OBR estimate June 2010

Estimate with multiplier of 0.9



OBR actual and forecast

Figure 2. UK growth estimates under different multiplier assumptions compared with actual growth 2010-12, and OBR 2012/13 estimate

Source: Duncan Weldon, “Higher Multipliers and the UK: Some quantification”, TUC Touchstone blog, 15th October 2012, http://touchstoneblog.org.uk/2012/10/higher-multipliers-the-uk-some-quantification/; OBR Economic and Fiscal Outlook December 2012.


1.7. (0.9 to 1.7 is the estimated range for the multiplier since the onset of the Great Recession implied by recent IMF research.) Figure 2 shows the implied multiplier effects on growth, with the actual growth rates in 2010/11 and 2011/12, and the OBR’s most recent forecast for 2012/13, for comparison.

Figure 2 suggests that for 2010/11, the OBR’s estimate (based on a multiplier, weighted to take account of the balance between spending cuts and tax rises that year, of around 0.9) was roughly correct in terms of its implication for economic growth. For 2011/12, the OBR was far too opti-mistic; the implied multiplier based on actual growth of 0.5% is somewhere between 1.3 and 1.7. If the OBR forecast for 2012/13 of 0.1% growth is correct, the implied actual multiplier for this year is more than 2. Table 2 below shows the implied actual multipliers for the first three fiscal years in the current parliament.

Taking these estimates at face value, the multi-plier for the UK appears to have increased from 0.7 in 2010/11 (comfortably within the range used by the OBR) to 1.5 in 2011/12 (bang in the middle of the IMF’s most recent estimates) to 2.4 in 2012/13 (well above the IMF’s upper bound estimate). A multiplier of 2.4 would be disas-trous for the austerity strategy because it would suggest that for every £1bn of fiscal tightening, GDP falls by around £2.4 billion – which would in turn make the deficit around £1bn worse.12 This would suggest that austerity cannot reduce the deficit under current economic conditions, completely undermining the UK Government’s entire economic policy.

It is important to be clear that the multiplier estimates in Table 2 should be taken as rough indications at best, because they do not control for any other factors which might have affected UK growth over the period 2010 to 2013. Defenders of the austerity programme have argued that UK GDP growth has been lower-than-expected

because of other factors, not because of austerity. Suggested culprits include:

�� Higher-than-expected inflation which has reduced real incomes;�� Weak business investment;�� The economic crisis in the Eurozone;�� Poor export performance by UK businesses;�� Over-restrictive product and labour market

regulation;�� A reduction in the UK’s long-run potential

growth rate.

There are three reasons why this is not a convincing defence of what the current govern-ment is doing. Firstly, many of the external factors blamed for slow growth – for example the crisis in the Eurozone – have been exacerbated by the role of the UK as a cheerleader for austerity over the last three years. Under the previous government Gordon Brown and Alistair Darling played a key role in persuading most developed economies to coordinate a fiscal stimulus in response to the 2008 financial meltdown – a stimulus which had started to produce promising results by 2010. By the same token, Osborne and Cameron played a key role in persuading most developed economies (with the partial exception of the US) to implement co-ordinated austerity from mid-2010 onwards. The economic consequences have been disastrous – turning a severe recession into a depression. Austerity in the UK is partially to blame for austerity abroad, the effects of which have fed back into the UK economy, creating a vicious circle. This fits with research by the IMF showing that fiscal policy multipliers are higher when austerity is coordinated across countries.13

Secondly, many of the other explanations for poor growth performance are themselves (at least partially) consequences of low growth. For example, business investment is weak largely because businesses believe that growth prospects

Table 2. Implied multipliers from actual UK growth statistics

Tax year 2010/11 2011/12 2012/13

Implied multiplier 0.7 1.5 2.4

Source: author’s calculations


are weak under present policies and so it would be difficult to sell additional output because the demand isn’t there.

Thirdly, some of the explanations for poor growth are largely themselves a consequence of failed policies to boost growth undertaken by the Coalition Government. Many of these policies are discussed in Section 2 of this report.

The human cost of austerity

The failure of austerity on the Government’s own terms (to eliminate the “structural” deficit in the public finances) is bad enough. However, the human cost of austerity amounts to far more than a row of red lines on an OBR spreadsheet. There is mounting evidence that the particular set of austerity policies pursued by the Coalition have led to increased inequality and poverty, reduced employment opportunities (in particular those in good quality jobs) and widened regional dispari-ties. In particular:

�� My own research for a consortium of chil-dren’s charities earlier this year showed that the tax, benefit and tax credit changes being introduced in this parliament (including the new Universal Credit) have a regressive impact overall, with the poorest forty percent of families with children losing over half as much again as the richest half of the popula-tion in percentage terms, and lone parents (90 percent of whom are women) being particu-larly hard hit.14 The below-inflation uprating in most benefits and tax credits announced in the 2012 Autumn Statement makes these distributional outcomes even worse;�� My research for the TUC uses data on house-

holds’ use of public services such as health, education and social care to show that the spending cuts originally set out in the 2010 Spending Review to be implemented by the end of the 2014-15 tax year are deeply regres-sive, reducing the living standards of the poorest families by far more than the richest. Further cuts now pencilled in for the period after 2015 (as a result of the government’s failure to close the ‘structural’ deficit) mean that funding for public services will be cut by around £7,000 per family per year by 2018.15

�� The working age employment rate remains significantly lower, and unemployment significantly higher, at the end of 2012 than in mid-2008 at the start of the Great Recession. The TUC has calculated that on current trends, UK unemployment will not return to pre-recession levels until the end of 2016. Furthermore, 62 percent of the increase in employment levels over the twelve months between September 2011 and September 2012 was in part-time jobs whereas only 38 percent was full-time jobs (part-time jobs make up around 27 percent of jobs in total).16

�� Young people are being hit particularly hard in the labour market, with unemployment for men and women aged 18-24 currently running at 18.2 percent.17

Of course, the regressive nature of the fiscal consolidation which this government has chosen to undertake means that Plan A would have had immense economic and social costs even if it had succeeded in eradicating the deficit. In the event, this goal is as far away as ever. If current policies go on as they are, the sad truth is that the human victims of Plan A will be just the first casualties in a permanent “war of austerity” that is going to take a long time to win.


Section 2 The failure of “Plan A Plus”

In this section we examine the attempts to face up to the failures of Plan A through implementing a stealth-like “Plan A Plus”.

It was recently reported that, when asked “what’s your Plan B if Plan A doesn’t work?” a senior Treasury official replied, “we do have a Plan B: it’s to keep doing Plan A for longer”.18 This does indeed seem to be a reasonable descrip-tion of George Osborne’s central strategy; the recent extension of the endpoint for austerity to 2018 makes that clear. However, the Coalition Government has been attempting to implement a “Plan A plus” (or, if you prefer, a “Plan B minus”) using several other initiatives designed to boost growth and reduce the deficit. The problem is that none of these initiatives have worked – and indeed in some cases they have made things worse. This section explains how.

Quantitative easing

In mild recessions and booms, monetary policy (the conventional tool for which in the UK is the Bank of England’s base lending rate) is a flexible instrument for macroeconomic manage-ment (probably more so than fiscal policy). But with interest rates at 0.5 percent since autumn 2008, there is no scope for them to go any lower; conventional monetary policy has reached its limits. Given this situation, since spring 2009 the Bank of England has experimented with unconventional monetary policy in the shape of its Quantitative Easing (QE) programme. QE involves the purchase by the Bank of England of a range of assets (mostly government debt). By July 2012, the Bank had purchased a total of £375 billion of assets.

The main aim of QE was to provide additional stimulus for the economy – initially in addition to limited fiscal stimulus (under Labour in 2009) and then, from 2010 onwards, to offset the contrac-tionary effects of fiscal tightening (austerity) as

well as the continued effects of economic recession. In particular, the Bank was aiming to avoid deflation in the general price level, which can have severely damaging economic effects (as seen in the Great Depression of the 1930s). While the QE programme has helped the UK avoid deflation, and further large declines in real GDP after 2009 have been avoided, beyond this the programme has been ineffectual, and indeed damaging in some ways. Asset prices – particularly for equities and property – have been propped up, but real growth in the productive economy has been extremely limited. Furthermore, the Bank of England’s own analysis suggests that the impact of QE on asset prices has had unfortunate distributional effects largely because of the extreme inequality of UK wealth and asset holdings.19 The existing holders of assets and wealth have benefited at the expense of the asset-poor. Meanwhile, real wages are set to decline by around 5 percent over the three years 2010 to 2013.20

In short, while QE has not been a total failure, it is most unlikely that it represents the best ‘bang for the buck’ from £375 billion of electronically created asset spending (in Section 3 I look at an alternative form of QE which would be much more effective).

Schemes to boost bank lending

One side-effect of the 2008 financial crash was that bank lending to businesses collapsed, as shown in Table 3 below (taken from the Bank of England’s Trends in Lending statistics). Hopes that the banking bailouts of 2008-09 and the QE programme would kick-start lending to busi-nesses through the provision of additional capital to banks have not been borne out; while the pace of decline in total lending slowed in 2010 and 2012, it increased during the first six months of 2012.

Going hand in hand with this, UK business investment performance has been poor; after contracting by 14.4% in 2009 and 0.4% in 2010, investment expanded by only 2.9% in 2011.21 The UK Government has attempted to boost lending with two high-profile schemes:

�� Project Merlin – a voluntary agreement between the Government and the four main


high street banks (the part-nationalised RBS and Lloyds Group, and the privately-owned Barclays and HSBC) finalised in February 2011. Under the agreement, the banks signed up to targets to boost business lending – particularly small business lending. However, by February 2012 it became clear that the banks had missed these targets, and that Merlin had failed. �� Funding for Lending – although the

Government refuses to admit that Project Merlin was a failure, in July 2012 a new scheme, Funding for Lending (FFL), was launched. FFL allows banks and building societies to borrow from the Bank of England at low rates of interest, on the condition that they increase their lending. The early evidence on the scheme’s effectiveness is disappointing; while 35 banks and building societies signed up to the scheme, only six of them actually used any FFL funding in the three months to the end of September 2012, and their net lending was negative by £1bn because existing customers repaid loans faster than new loans were being taken out.22

In short, the recent attempts to boost bank lending to businesses appear to have failed. According to evidence from the Bank of England’s Credit Conditions Survey, the main thing holding back lending appears to be lack of demand for credit rather than supply: “most major UK lenders reported that a lack of confidence among some firms and the wider economic environment were weighing down on demand for credit.”23 This makes sense in economic terms: given that economic growth has been extremely weak, firms are unlikely to want to borrow – or invest – if they can’t be confident that there will be a market for expanded output.

The Business Investment Bank

One of the key recommendations of Plan B was a state-backed Business Investment Bank. As the original document put it:

“The centre piece of a new investment model would be the creation of a British Investment Bank (BIB) modelled on successful arm’s-length banks the world over. Its remit would be to use funds not just to make loans but as a reserve to back a guarantee for invest-ment in key sectors and to leverage in private sector investors. The focus of BIB invest-ment would be low carbon, high employ-ment sectors such as housing, transport and renewable energy.”24

While Vince Cable’s Department for Business, Innovation and Skills has launched a Green Investment Bank (GIB)25, it is unfortunately a feeble and anaemic version of what Plan B suggested. The total amount of Government funding available for the GIB is only £1bn per year for the three years up to 2014-15, and the GIB will only be allowed to borrow to fund additional investments after 2015. This is better than nothing, but not by much; the Coalition version of a Green Investment Bank looks like little more than a token gesture, and is simply inadequate to play a major part in driving the far-reaching shift to a low carbon economy which the UK needs over the next decade and beyond. Given George Osborne’s often-stated hostility to the green agenda, it is not surprising that the GIB has fallen so far short of what was required.

Plans for a £1bn ‘business bank’ were also confirmed in the Chancellor’s Autumn Statement.26 This aims to bring together existing

Table 3. Lending to UK Businesses

Time period 2007 2008 2009 2010 2011 2012q1 2012q2

Net monthly flow (£bn) 7.4 3.8 -3.9 -2.1 -0.8 -3.2 -0.4

3-month annualised growth rate (%) 20.8 10.7 -7.7 -5.2 -2.0 -6.2 -2.9

12-month growth rate (%) 16.8 17.9 -1.8 -7.1 -3.3 -2.9 -3.1

Source: Bank of England, Trends in Lending, October 2012


SME finance schemes and address structural gaps in SME funding. Whilst this is another welcome move the scale of the bank is unlikely to bring around the large and rapid growth in successful SMEs that we need or bring forward the scale of investment urgently required.

Infrastructure investment

Infrastructure investment is a crucial ingredient of any escape strategy from the current economic crisis. Public infrastructure investment spending has been the most serious casualty of the austerity programme. While Public Sector Current Expenditure27 is projected to fall by around 12% relative to GDP growth between 2010-11 and 2015-16, Public Sector Gross Investment (PSGI) is projected to fall by over 40% over the same period. The announcement of an additional £5 billion of public investment in the 2012 Autumn Statement sounds like good news on the face of it – except that:

a. PSGI will still be around £12 billion below its 2011-12 level in real terms by 2015-16;

b. The additional funding merely restores certain capital investment projects rashly cancelled by the Coalition Government in its early days – it doesn’t push forward with new investment above and beyond what was planned by the last government, which is what the UK undoubtedly needs.

Deregulation – how to make our problems worse

One of the main economic policy ‘memes’ propa-gated by George Osborne and other ministers in the Coalition Government is that economic growth in the UK is being held back by an excess of ‘red tape’ and that a large dose of deregulation is needed to make us ‘competitive’. With this in mind:

�� The Government has reversed many of the employment protection measures introduced by the previous Labour Government (for example the qualifying period for unfair

dismissal legislation has increased from six months in the job to two years);�� A new ‘shares-for-rights’ scheme is being

introduced, whereby employees are being encouraged to give up all their employment rights in exchange for a small payment of shares in the company they work for; �� The Government is amending the planning

regulations to make it much easier for devel-opers to overcome local residents’ objections to new residential and commercial develop-ments, and possibly to allow building on Green Belt sites in future.28

The evidence for the potential of these policies to succeed is thin to say the least. A detailed review of the evidence on the relationship between employment protection legislation and economic performance by Stewart Lansley and myself in 2010 concluded that there was essen-tially no evidence of a relationship between the extent of labour market regulation and economic growth or employment. In any case the UK is already the third least regulated labour market in the OECD.29 As regards the planning system, while the UK desperately needs a larger stock of affordable housing, a construction ‘free-for-all’ is likely to have a negative impact on the environ-ment. In short, deregulatory policies are unlikely to produce additional growth – and if they do, it will come at a reduced quality of life for many.


Section 3Plan B – the priorities for action now

In this section we outline the policy measures that need to be taken now and in the medium term if the economy is to start growing in a fair and sustainable way.

So far, this report has laid out the short-comings of Plan A and the additional policies introduced on top of Plan A by the Coalition Government that are at best ineffective, and at worst positively harmful. This final section explores the key features of a Plan B one year on. This Plan B+1 focuses on the more immediate policy recommendations for fair and sustainable growth.

The original Plan B document published last year contained a detailed set of policy measures to create “a good economy for a good society”. The intention in this follow-up report is not to repeat every detail of that policy prescription, but rather to draw out the most important elements to make the most rapid progress in reducing inequalities and moving towards a sustainable economy.

The original Plan B set out a range of short-run measures to boost demand and escape from the slump, combined with longer-term measures to ensure sustainability and stability for the nation’s economy, society and the envi-ronment. One of the main lessons from the 2009 fiscal stimulus is that a short-term boost to the economy does very little good unless it is accompanied by effective long-term reforms – otherwise, the economy will just return (or at least try to return) to “business as usual” once the stimulus is withdrawn.

Therefore, any change in policy will have to legislate simultaneously for the short-run and the long-run. The best short-run reforms are those which make a “sustainable well-being economy” possible in the longer run. In many cases radical action may be preferable to piecemeal reforms.

In particular, Plan B+1 identifies five clear priority areas for action.

1. Green capital investment

The big shift, now, tomorrow, has to be to get government investment in green infrastructure. Britain can’t afford to wait for the banks or corporations to invest while they are waiting for the government to act first. Government has to act first. Borrowing is cheap, people are out of work and jobs need to be done. The focus, given the threat of climate change, has to be on environmentally friendly projects. There are two ways in which the state can invest in green infra-structure; nationally and locally.

National Green Investment As discussed in Section 2 a lot more evidence on the effectiveness of QE has emerged over the last twelve months and the results of the Bank of England’s QE have been at best disappointing and at worst actively harmful.

A clear and obvious alternative exists, which is to use the funds created by QE for targeted investment rather than blindly buying up govern-ment debt and other assets and hoping that some proportion of the extra cash punted out to the commercial banks gets lent out to productive businesses rather than fuelling speculation and financial intermediation. “Green QE” could be used to finance ambitious infrastructure projects such as a Green New Deal to make all UK buildings energy efficient, with a huge payoff in terms of reduced UK carbon footprint. Green QE could also be used to fund improved public transport infrastructure and the building of hundreds of thousands of extra homes on brown-field sites and/or a new ultra speed broadband and fibre-optic network to link up every home and business as well public transport infrastruc-ture – especially trains. It could also be used to provide large-scale capitalisation to fund a Green Investment Bank at full scale which could transform the UK economy, rather than the ‘mini-bank’ which the Coalition has set up.

Local Green Investment It is not just the national state that can act – local government can start investment and already has. This has several advantages – local invest-ment can help rebalance the British economy away from the dominance of the City of London, it can be directed sensitively at local needs and it


allows economic decisions to be taken closer to the people they affect. The Birmingham Energy Savers programme is a great example of what can be done:

In October 2012 Birmingham city council launched its Birmingham energy Savers programme. £75m will be borrowed from the Treasury’s Public Works Loan Board and another £25m will come from the energy companies legal obligations to support cO2 reductions. This is just the first injection of capital to fund a full retrofit programme of homes across the West midlands. Phase one up to 2016 will carry out energy efficiency improvements such as insula-tion, fitting new efficient heating boilers and (where possible) solar panels in 15,000 homes and at least 40 public buildings. A further 45,000 homes and 1,000 commercial buildings will be retrofitted by 2020. With another 22 authori-ties named on its procurement note and with its overall aspiration to retrofit at least 200,000 houses by 2026, Birmingham will have initiated a significant investment programme.

The Treasury loan taken out by Birmingham will be at no long term cost to the taxpayer since payments for the improvements are recovered in instalments through energy bills. This will cover the loan repayment and the low interest rates charged. Homes where the estimated saving on bills equals or exceeds the cost of the improvement work will qualify, and those that cannot achieve this “golden rule” may be eligible thanks to the energy company Obligation – a programme that uses funding from energy firms to help those in hard to treat homes.

The council estimate that 2,000 jobs could be created and safeguarded by the initiative, ranging from installation engineers, to manufacturers and designers. Local universities and research estab-lishments are already involved as they are seen as being at the cutting edge of research and develop-ment of new green technologies.

The project is expected to reduce energy bills for citizens by up to £300 per year, taking 12,000 households out of fuel poverty by 2015. Fuel poverty affects an estimated 27 per cent of the more than 400,000 households in Birmingham. 350 full time equivalent jobs are expected to be created or safeguarded from improving the energy efficiency in 15,000 domestic dwellings by

2015. 3,000 homes will be improved in the first year, 4,500 in year two, 7,500 in year three.

The chosen delivery partner is carillion energy Services, one of the largest national suppliers of heating and renewable energy. As part of the terms of the bid to Birmingham energy Savers they will work with communities, their supply chain, small businesses and social enterprises such as Groundwork to deliver a local solution which creates as much economic and social value as possible in Birmingham. carillion has committed to create and sustain at least 360 jobs through their own investment and skills training – and to generate many more employment opportunities by encouraging their business partners to invest locally in a range of new green energy facilities.30

This is just one example to show what is possible at a local level. If it was replicated across the country, in tandem with Green QE and a well capitalised Business Investment Bank Britain would start to be transformed and the economy would start moving again. This summer’s Olympic Games showed that Britain can build big projects in an impressive way. The legacy of that investment will hopefully ripple out – but new green homes, rail infrastructure and fast broadband for all would guarantee not just faster growth but an environmentally friendly public legacy that would benefit the country for genera-tions. There is now an overwhelming coalition in favour of such measures – from the CBI and Michael Heseltine to the TUC and every point in between.

2. Using tax and benefit reform to drive recovery and promote equality

The original Plan B suggested using increases in in-work and out-of-work benefits to drive recovery (due to the fact that people on low incomes are more likely to spend, rather than save, additional income) while preserving work incen-tives and reducing inequalities. At the same time the document recommended wholesale reforms to the tax system to make it more progressive, to reduce opportunities for avoidance, and to promote a shift to the green economy.

Plan B+1 suggests an extension of this approach with wholesale reform of the tax and benefit


system. The system of tax and transfer payments needs to be reconfigured to ensure that:

1. All families reach a basic minimum standard of living in or out of work.31

2. The tax system is progressive, with people on high incomes paying a higher proportion of their incomes in direct tax than at present;

3. Marginal withdrawal rates on earned income for people on low wages (including second earners in couples) are low enough to make work worthwhile.

There is also growing support for a Mansion Tax, which if levied at a low rate of 1% on proper-ties valued at £2m plus could raise around £1.7bn a year.32

Next year Compass plans to publish new research setting out reforms to the tax and benefit system which would combine a universal family basic income with a new “comprehensive direct tax” which would replace the current income tax and National Insurance Contributions systems. These reforms represent a progressive alterna-tive to the Universal Credit scheme which the Government plans to introduce next year. They would be accompanied by other initiatives such as crackdowns on tax avoidance and evasion by wealthy individuals and corporations, a land value tax and a tax on financial transactions combined with the abolition of Council Tax to ensure a much more progressive and fiscally sustainable tax and benefit system.

3. Fiscal priorities

According to the fiscal plans set out in the 2012 Budget, by May 2015 around £106 billion of spending cuts (at 2015 prices) will have been made compared with May 2010. The priority for a new policy direction should be to take radical action to reverse or counteract the effect of the cuts which have been most economically (and environmentally) damaging. Full-scale tax and benefit reform along the lines suggested earlier could potentially wipe out the regressive impact of the tax/benefit changes between 2010 and 2015, but there is still the issue of the regressive impact of cuts to other public services (health, education, social care etc.) as identified in work

by Tim Horton and myself for the TUC and UNISON.33

How should spending priorities be set? Rather than the current approach of (largely) protecting budgets in the NHS and international devel-opment and ‘salami-slicing’ everything else, it would be better to conduct a fundamental review of each and every component of public spending to evaluate its effectiveness in terms of promoting wellbeing, environmental sustainability and reducing inequality. Such a “zero-based budget review”34 could be used to identify the most important priorities for (an increased level of) public spending. The original Plan B argued for:

“a social investment state [which] recognises the productive long-term benefits of public investment in people, their livelihoods and communities, and directly challenges the ideology peddled by neoliberalism that the state is an unproductive burden on the public sector. Many elements of public expenditure – for example social security expenditure, health, social services and education” – can be seen as ‘preparing’ not ‘repairing’, preventing social problems emerging upstream, not compensating for them when they occur downstream.” 35

The ‘social investment state’ provides a useful conceptual framework for grounding a spending review and in deciding which areas of public spending to prioritise within an overall spending envelope which – while higher than current Coalition plans – will nonetheless be tight. Strategically the decision might, for example, be to invest heavily in childcare, to enable more parents to work, share parenting responsibilities more fairly and boost a labour intensive sector.

4. A new bargain for labour

A government implementing Plan B needs to make large-scale alterations in the labour market to effect a fundamental shift in the balance of income and workplace power in favour of working people on low-to-middle incomes and their families. Policies which need to be consid-ered to do this include:


�� Introducing a living wage across the public sector, private and voluntary sector organi-sations undertaking activity outsourced from the public sector and other sectors of manufacturing and services where the policy is affordable (with the locus of affordable sectors increasing over time);�� Reducing differentials in hourly pay between

the highest and lowest paid employees within organisations (including male-female differ-entials);�� A greater role for industrial democracy and

collective decision-making and employee consultation in the workplace;�� Better paid leave rights and comprehensive

affordable high-quality childcare;�� A more progressive approach to firm

ownership, with worker-owned cooperatives increasingly replacing the traditional share-holder-owned PLC or private equity-based ownership models.

5. Reforming the capital markets: finance, banking and ownership

�� A full separation of retail and investment banking – rather than the ‘ringfence’ recom-mended by the Vickers Commission – is an essential component of sustainable banking reform to avoid another meltdown along the lines of 2008.�� A Financial Transactions Tax, if implemented

at an EU level, could raise billions of pounds of additional income for UK public services each year.36

�� There needs to be provision to use capital controls at either an EU or a national level as a tool to combat financial instability. There is a growing consensus around this and the IMF have recently supported the idea of the re-introduction of capital controls.37

�� The UK banking sector needs to rely a lot less on the ‘too-big-to-fail’ shareholder-owned PLC banks, moving instead to a mixed ownership model, including a larger role for mutually and cooperatively owned banks, and a substantial state-owned sector under democratic control.


Section 4

In this final short section we look at how to persuade the public that a new course has to be set for the economy.

Persuading the public

It cannot be left to elites to plot and direct an alternative path for our economy. The people of alternative path for our economy. The people of

Dear Sam,

Why we are askin

g you to support

a change in eco

nomic policy

The economy isn’

t growing and th

at’s a problem f

or all of us.

The Government h

as tried focusin

g on cutting the

deficit. Of cou

rse all

governments have

to live within

their means over

the long term,

but the

figures show cut

ting sharply has

n’t helped. With

the help of other

s a new

plan is fast eme

rging to rebuild

Britain in a fa

ir and sustainab

le way.

At the moment th

ere is a log-jam

. The Government

wants firms to

invest,

but firms are wa

iting for people

to have the con

fidence to buy.

Cutting

the deficit is j

ust taking more

demand out of th

e economy.

The answer to bo

th the deficit a

nd the slow econ

omy is to have g

overnment

invest more on a

temporary basis

to rebuild conf

idence, demand a

nd to

modernise our in

frastructure. Th

is will give us

better services

such as

improved train t

ravel and faster

broadband and w

ith more people

working

and paying tax t

he deficit can t

hen be paid down

. Borrowing to i

nvest has

never been cheap

er as interest r

ates are at a re

cord low.

We all do this. Ta

ke an easy example

. You’ve just secu

red a new job but

you

have no money so

how do you get

to work? Answer:

you borrow the

money for

the monthly/week

ly bus pass or r

ail fare and you

repay it on pay

day. So

borrowing to ‘in

vest’ in the bus

pass was a rati

onal thing to do

despite

the fact that yo

u had your own p

ersonal deficit.

If government di

d this on a nati

onal and local s

cale then our co

untry

could be transfo

rmed and the def

icit next year a

nd the situation

for many

more of us and o

ur planet would

improve.

Best wishes

From all at Comp

ass

Britain are going to have to want and demand something better and if we can’t persuade them, our case is weak. Not many of them will read this report but as more and more people are finding it impossible to make ends meet they feel that austerity isn’t working. If we could send everyone a letter it could contain a message something like this – which might help people to understand better and demand more of their leaders.


conclusion

The Coalition is clearly getting it wrong. Yet, it is questionable whether an incoming alterna-tive government in 2015 – whether a majority Labour Government or some kind of progressive coalition – will be able to deliver substantially better outcomes for the majority of families in the UK unless politicians embrace a clear and radical alternative to the Coalition’s failed economic strategy. The aim of this report has been to build on the original Plan B vision and continue to flesh out a progressive, radical, deliverable economic programme. Further work is planned over the course of 2013 by Compass and other researchers on the details of this programme.

The country urgently needs a new economic coalition to rebuild our economy and social fabric while refusing to do more harm to the environment. It is a huge task and will not be completed by any single party, group or interest. It needs to be not just a Plan B – but a National Plan – something that involves the whole nation. The moment demands nothing less.


endnotes1 The Guardian Editorial, 14 November, 2012 http://www.guardian.co.uk/commentisfree/2012/nov/14/austerity-economy-europe-king-us

2 HM Treasury, Budget 2010. http://www.hm-treasury.gov.uk/2010_june_budget.htm

3 George Irvin, Howard Reed and Zoe Gannon (2010), The £100 Billion Gamble on growth without the state, London: Compass. http://clients.squareeye.net/uploads/compass/documents/Compass%20cuts%20WEB.pdf

4 Howard Reed and Neal Lawson (eds), Plan B: A good economy for a good society. Compass, October 2011. http://www.compassonline.org.uk/news/item.asp?n=13946

5 Plan B, p11

6 Plan B, p8

7 The original Plan B report refuted the arguments used by Coalition politicians to justify plan B – in particular (a) the claim that the UK was “on the verge of bankruptcy” in May 2010; (b) that the UK had to cut its debt as quickly as possible or risk crippling interest rates on government debt at the hands of the ‘bond vigilantes’; and (c) the idea that “expansionary fiscal contraction” via export-led growth, exchange rate adjustments or increased business investment could lead the economy back to full health by 2015. The arguments in Section 1 of Plan B remain valid, and rather than retreading old ground here, the inter-ested reader is recommended to (re)visit that publication.

8 The extension of the period of austerity also means that Osborne is likely to break one of his fiscal rules, the ‘supplementary debt target’ (to have debt falling as a share of GDP by 2015-16), as it is now likely that total UK debt as a share of GDP will carry on rising into 2015-16 and possibly beyond. The other fiscal rule – the “rolling fiscal mandate” – can never be broken as it merely specifies a plan to achieve structural balance in five years, which can always be promised without ever being achieved.

9 Note that there is not one single multiplier figure which applies to the whole economy; the multiplier is an aggregate referring to the average impact of fiscal policy on output.

10 Jonathan Portes, “More on multipliers: why does it matter?”, Not The Treasury View, 13 October 2012. http://notthetreasuryview.blogspot.co.uk/2012/10/more-on-multipliers-why-does-it-matter.html

11 See IMF World Economic Outlook, October 2012, Box 1.1, p41: “Are we underestimating short-run fiscal multipliers?”

12 On the assumption that the average tax-to-GDP ratio is around 40%, and hence a £1 billion reduction in GDP reduces tax revenue by around £400 million.

13 IMF, World Economic Outlook October 2010, Chapter 3. http://www.imf.org/external/pubs/ft/weo/2010/02/index.htm

14 Howard Reed, In the Eye of the Storm: Britain’s Forgotten Children and Families. NSPCC/Action for Children/The Children’s Society, 2012. http://www.action-forchildren.org.uk/media/4012135/in_the_eye_of_the_storm.pdf

15 See “Families set to lose £7,000 of public services by 2018”, TUC, 26 November 2012. http://www.tuc.org.uk/economy/tuc-21716-f0.cfm The meth-odology for the distributional analysis of public spending used in this TUC research was originally developed by Tim Horton and myself in the report Where the Money Goes, published by TUC in 2010.

16 See TUC Labour Market Report 31, November 2012. http://www.tuc.org.uk/economy/tuc-21721-f0.cfm

17 ONS, Labour Market Statistics, December 2012. http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/december-2012/statistical-bulletin.html

18 “Osborne admits UK deficit plan off track”, Financial Times, 2 December 2012. http://www.ft.com/cms/s/0/15b716d2-3c93-11e2-a6b2-00144feabdc0.html#axzz2EiqfYRN7 (paywall)

19 Bank of England, “The Distributional Effects of Asset Purchases”, 12 July 2012. http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb120306.pdf

20 See HM Treasury, Budget 2012, Table D1: nominal wage growth compared with CPI growth

21 Using chained volume measures of investment. See ONS Statistical Bulletin, “Business Investment Q3 2012: Provisional Results”, http://www.ons.gov.uk/ons/dcp171778_287925.pdf

22 Jill Treanor, “ ‘White elephant’ funding for lending scheme fails to boost loans”, Guardian, 3 December 2012. www.guardian.co.uk/business/2012/dec/03/funding-for-lending-scheme-500m-pounds

23 See Bank of England, Trends in Lending, October 2012, http://www.bankofeng-land.co.uk/publications/Documents/other/monetary/trendsOctober12.pdf

24 Plan B, p5

25 See the Green Investment Bank webpage at http://www.bis.gov.uk/greenin-vestmentbank

26 K Caldwell, Autumn Statement 2012: Osborne unveils £1bn ‘business bank’, Investment Week, 5 December 2012, http://www.investmentweek.co.uk/invest-ment-week/news/2229703/autumn-statement-2012-osborne-unveils-gbp1bn-business-bank

27 Public Sector Current Expenditure is the sum of the current expenditure of general government payable by public corporations to the private sector and abroad.

28 Christopher Hope, “David Cameron backs Nick Boles over house building plans”, Daily Telegraph, 5 December 2012. http://www.telegraph.co.uk/earth/hands-off-our-land/9724371/David-Cameron-backs-Nick-Boles-over-house-building-plans.html

29 See Stewart Lansley and Howard Reed, The Red Tape Delusion: Why deregula-tion won’t solve the jobs crisis, TUC, 2010, http://www.tuc.org.uk/extras/redtape-delusion.pdf

30 This case study is based on a conversation with Colin Hines from the Green New Deal Group

31 For more information on what a on the Minimum Income Standard see the Joseph Rowntree Reform website at http://www.jrf.org.uk/focus-issue/minimum-income-standards

32 Helene Mulholland, David Miliband wants ‘mansion tax’ to raise £1.7bn, The Guardian, 2 August 2010, http://www.guardian.co.uk/politics/2010/aug/02/david-miliband-mansion-tax

33 Tim Horton and Howard Reed, Where the Money Goes: How We Benefit from Public Services. London: TUC. http://www.tuc.org.uk/economy/tuc-18467-f0.cfm

34 This concept was first suggested by Graeme Cooke et al in In the Black Labour, London, Policy Network, 2011, http://www.policy-network.net/publications/4101/-In-the-Black-Labour

35 Plan B, p30

36 Why Labour should back a Financial Transactions Tax. Compass, 2012. http://www.compassonline.org.uk/publications/item.asp?d=7015

37 Lydia Prieg, “Uncovering the secrets of international finance: capital controls”, new economics foundation videoblog. http://www.neweconomics.org/blog/2012/12/06/uncovering-the-secrets-of-international-finance-capital-controls

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Rebuilding Britain and a Good Society

PLAN B

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+ 1

Howard Reed

planB

Documents

Transcript of planB