public investment

Building Scotland’s future now: A new approach to financing public investment

Stephen Richard — Tue, 07 Sep 2021 07:14:51 +0000

Building Scotland’s future now: A new approach to financing public investment

Primary Author or Creator

Iain Cairns

Stephen Richard Tue, 09/07/2021 - 08:14

Additional Author(s) / Creators

Christine Cooper, Andrew Watterson, Ben Wray, Common Weal

Alternative Published Date

2017?

Category

Finance

Fast Facts

Investment has become a dirty word in the era of ‘investment banking’. Investment banking is widely considered to be one of the causes of the 2008 financial crash (Varoufakis, 2015). When bankers talk about investing, they mean short-term speculation on stocks, bonds or other complex financial derivatives. That is, a form of trading (or, more accurately, gambling) that contributes nothing to the ‘real’ economy.

Reclaiming investment is a necessary task. The value in the concept of investment is that it is exactly the opposite of the sort of speculative, short-termism in economic thinking that dominates the minds of ‘investment’ bankers.

More details

We believe there are three key principles which a Scottish Government approach to public investment should follow:

Public investment should prioritise socially and environmentally useful projects.

Public investment should not subsidise corporate failure.

Public investment should prioritise areas of the economy that have positive ‘multiplier effects’; childcare would be one example of this.

Resource Address (URL)

https://commonweal.scot/policies/building-scotlands-future-now-a-new-approach-t…

Keywords

Scottish Government

public investment

Language English

An Investment-Led Economic Development Framework For An Independent Scotland

Stephen Richard — Sat, 04 Sep 2021 16:26:31 +0000

An Investment-Led Economic Development Framework For An Independent Scotland

Primary Author or Creator

Common Weal

Stephen Richard Sat, 09/04/2021 - 17:26

Date Published

Thu, 04/18/2019 - 12:00

Category

Economy

Type of Resource

Policy Paper

Fast Facts

he UK’s model of economic development is based on a unproductive sectors which generate vast profits through four particular methods – financial speculation, asset value inflation, debt-fuelled consumption, and concentration and monopoly.

This report argues that Scotland, if independent, could improve its performance across 12 key pillars of its economy.

It then explores 18 alternative economic theories – beyond limited approaches focused on GDP growth and from there creates a package of 10 actions which would move an independent Scotland towards an investment-led economy including laying down the foundations of a Green New Deal proposal.

More details

The report lays out ten packages of actions that Scotland could undertake – some of which could be started now, many of which would require independence – that would help move to an investment-led economy. Whilst this report is not in itself a prospectus for a Scottish “Green New Deal” these packages are all compatible with and would form the foundation of such a Green Deal.

The plans of action are:

Create a monetary and fiscal environment conducive to investment. During the development phase of Scotland’s independence, it will be recognised that an independent currency and strong monetary institutions are vital and that cutting deficits suppresses the economy and pushes deficits onto private and household sectors.
Strengthen the foundational economy. Scotland should prioritise core public needs such as energy, transport, infrastructure, and postal and communication services and should tackle growing problems in housing and food sectors with a much more interventionalist approach.
Build a public investment model. Led by the Scottish National Investment Bank, Scotland should set up a series of National Companies tasked with driving investment in a strategic way across public, civic and private sectors. A public stock exchange would support businesses seeking equity and local banking networks would support small and local businesses.
Produce an industrial strategy. Scotland’s industrial strategy would be designed to boost, develop and stimulate the productive economy and rebalance away from low-pay sectors. Key also would be anchoring strategies to maintain businesses in Scotland for the long term.
Invest in human capital. From industrial democracy and collective bargaining, through workers’ rights and social security, a Universal Basic Income and more recognition of unpaid labour, encouraging entrepreneurialism and creating a welcoming immigration strategy not solely based on economic reasons there is much that Scotland could do to focus attention on how well we live in this country rather than just how much we produce for our employers.
Implement a resource management strategy. Scotland’s resources are vast but many are exploited unsustainably or are being used in ways which benefit too few. Much better use of our land and marine assets would be prioritised.
Decentralise economic policy. Though not on anywhere near the magnitude of the UK as a whole, Scotland still suffers from regional economic inequalities. Development Councils – a radical form of local government – would be used to boost local ownership of development policy and help to stop over-concentration of economic activity within Scotland.
Reorient business support. Scotland should take a more strategic, value based approach to business support. Diversification of ownership models should be encouraged and the public sector should take an “entrepreneurial state” approach in many areas of the economy.
Do no harm. Scotland must take climate change seriously. Small tweaks to the current system or delaying action beyond the next election is no longer tenable. A Green New Deal should be developed and enacted. Instead of debt-fuelled consumption, a sharing economy with a much more circular approach should be built. “Reduce, repair, re-use and recycle” should replace “take, make, use and dump”.
Start with a boost. Setting up a new country will take a lot of work and will require a large sum of money invested to create the new services and infrastructure that Scotland currently lacks entirely or needs to vastly expand. A new country should not start life with a decade of deficit reduction at a time when the need for transformational investment will be at its more vital.

We believe that independence will be required to meet all of these goals and we believe that meeting these goals will be a reason to fight for independence. With these, we have created a vision of a Scotland to come which can not only meet the hopes and aspirations of its citizens but can bring them together in a shared enterprise of making all of our lives better.

Keywords

Universal Basic Income

Resource management

Economic policy

Language English

Investment in Scotland: A Common Weal Approach

Stephen Richard — Tue, 31 Aug 2021 14:24:48 +0000

Investment in Scotland: A Common Weal Approach

Primary Author or Creator

Iain Cairns

Stephen Richard Tue, 08/31/2021 - 15:24

Additional Author(s) / Creators

Christine Cooper, Gordon Morgan, Common Weal

Alternative Published Date

Septtember 2014

Category

Banking

Type of Resource

Policy Paper

Fast Facts

― Taking a look at UK debt over the long-term shows that it is historically at a very low level. It is also incorrect to claim that we cannot afford the interest on debt.

― The reality is that there has rarely been a more favourable time for the UK Government to borrow in order to invest in renewing its infrastructure and fostering new industries.

― It is testament to the outright failure of the Thatcherite project – the deregulation and privatisation of much of the UK economy and the increasing emphasis placed on the financial sector – that the UK’s growth has declined every decade since the former Prime Minister began the process in the 1980s.

― The case of Private Finance Initiatives (PFI), which has dominated infrastructure investment since the 1990s, exemplifies how private finance provides poor value for money.

― The financial system in the UK, which by its nature, distributes wealth from the productive economy to the financial sector from the indebted poor to the wealthy shareholders of banks and from regions to financial centres, is not capable of delivering the kinds of economic and social outcomes people have a right to demand.

― Investment is what the UK lacks, not money.

More details

The financial system in the UK, as this report has shown, which by its nature distributes wealth from the productive economy to the financial sector, from the indebted poor to the wealthy shareholders of banks and from regions to financial centres, is not capable of delivering the kinds of economic and social outcomes people have a right to demand. Moreover, it threatens to create a kind of‘perpetual state of crisis’which acts as a justification for the utterly destructive rounds of austerity to which all mainstream parties at Westminster have committed.

This report shows another way forward.

Governments and central banks must once again regard monetary policy as being about more than merely the quantity of money in an economy, which is supposedly controlled by the price of money (i.e. interest rates). Governments and central banks must also be concerned with the ‘quality’ of money in the economy, i.e. for what purposes the money is allocated, how it is allocated and what kind of institutions allocate it.

Central bank credit controls or guidance is a tried and tested method of improving productive investment while reducing speculation.

Also at the national level, a National Investment Bank should be the central component of a new and accountable financial architecture. But the financial sector must also be remodelled around democratically accountable, locally responsive banks and credit co-operatives, run by communities for communities.

Investment is what the UK lacks, not money.

Not only will this create stability in the financial sector. It will be a huge boost to the productive economy, including for co-ops and social enterprises which seek to put people before profit. It is self-evident that if we are to have an economy which is run in the interests of communities rather than shareholders, communities must be in control of directing the flow of financial resources towards their chosen outcomes.

Our current economy - characterised by low-skilled work, disempowered employees and enterprises concerned almost exclusively with profit - is to a large extent a reflection of the priorities of a financial sector which itself is dominated by the desire for profit above all else.

A Common Weal society needs a Common Weal financial sector. And considering the current debate about Scotland’s constitutional status, it is worthwhile emphasising that viewing monetary policy in these broader terms would allow Scotland, even without its own currency, to pursue its own independent monetary policy through the strategies outlined in this paper, which promote diversity in the financial sector.

Finally the austerity narrative must be challenged. The current rounds of austerity in the UK are justified neither by the level of debt nor the rate of interest paid on that debt, both of which are currently low by historical standards.

Investment is what the UK lacks, not money.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2020/09/Investment-in-Scotland-A-Com…

Keywords

UK debt

UK Government Borrowing

Privatisation

Private Finance Initiative

Wealth

public investment

Profit

Language English

Public Land Value Capture: A new model for housing development in Scotland

Stephen Richard — Wed, 18 Aug 2021 17:39:39 +0000

Public Land Value Capture: A new model for housing development in Scotland

Primary Author or Creator

Common Weal

Stephen Richard Wed, 08/18/2021 - 18:39

Alternative Published Date

Feburary 2018

Category

Land

Type of Resource

Policy Paper

Fast Facts

This report outlines the case for public land value capture – the process by which councils, not those selling land, can benefit from the increase in land value due to changing use (such as planning permission for housing) or can reduce house prices by not passing that uplifted cost on to renters and buyers of the houses built on such land. This briefing is based on Common Weal’s submission to the Planning Bill consultation in response to question, on alternative ways to finance infrastructure provision. It is part of a series of briefings by Common Weal on housing, communities and places.

More details

― Public authorities should have the legal means to purchase land at existing use value, so that the uplift in land value from planning permission for development of the land is captured for the public good. The financial consequence of this public land value capture policy will be increased funding for housing development without any upfront cost, as the public authority could borrow against the future uplift in land value to finance the development of the site. Plots of land can then either be developed directly by the local authority, or sold to developers at cost price plus infrastructure costs. This approach would be significantly cheaper than what developers would pay for development if their costs involve purchasing land at market value.

― Public land value capture is not new. The UK Government’s 1947 Town & Country Planning Act introduced planning permission and with it the provision for public authorities to compulsory purchase land at existing use value. Public land value capture simply seeks to return Scotland to a situation where the public gains the increase in value from public investment in the development of the land. This public investment would also create better market conditions, as instead of the private sector competing over control of the land market it would compete over the quality of housebuilding developments, creating a more diversified market for housing supply and tenure type.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2018/02/Public-Land-Value-Capture.pdf

Keywords

Local Planning powers

Public land value

public investment

House building

Language English