We welcome the government’s new measures to support workers, particularly the introduction of grants for wage support. But despite the scale of these spending commitments, there is a real danger that millions of workers will not feel their benefit.

The government must move decisively to get cash into the bank accounts of households and firms before the economic dominos start to fall. Substantial support has been announced, which will be welcomed by many workers — but it will not reach all who need it. The government is certainly moving in the right direction, but the new measures will fail to reach all workers, and could take until the end of April to come into force.

More clarity is also needed on the announcement that the government will provide grants to businesses, covering up to 80% wage costs to a limit of £2,500 per worker. If these grants reach the businesses that need them, they could prevent millions of redundancies.  But there is no assurance that every business that needs support will receive it: the government needs to specify if the payment is more or less automatic, how it will get into firms’ accounts quickly and how it will ensure that this cash translates into wages at the end of the line.

Stipulations against layoffs need to be in place

A further problem with the announced plans is that no stipulations are placed on firms keeping workers on payroll. Financial support for firms must come with conditionality: at a minimum, no workers are to be laid off.  People are losing their jobs right now – the government must act immediately to stem the flow. Without this stipulation put in place immediately, firms  – and their payroll systems – will be shutting up shop in the intervening period, simply precluding the possibility of utilising the government’s ‘Job Retention Scheme’.

The self-employed are left out in the cold and need urgent support

The 5 million people who are self-employed will have taken little comfort from last Friday’s announcements. Greater support is needed. The expansion of an already overburdened Universal Credit system to cover the self-employed will make little difference. While a worker on PAYE could receive up to £2,500 per month, a self-employed worker might only receive statutory sick pay – £94.25 per week.

It is our understanding that self-employed workers who have filed tax returns with HMRC in the past could be supported within days of a governmental decision. As HMRC already holds the bank account details of these workers, it would simply be a matter of paying cash into their accounts.

Universal Credit will not be able to cope or deliver

Universal Credit is going to wilt under the pressure of new unemployed applicants in the coming weeks and months. Other than a minor improvement in levels of income support, no support has been announced for those outside of formal employment, unemployed persons, those receiving personal independence payment, or others without a current employer such as university students. For these people, immediate removal of means-testing from current social security payments should be introduced as a matter of urgency.

We applaud the government for taking advice from the TUC and CBI, and recent measures move very much in the right direction.  But it must go further – time is of the essence.  Economic collapses become increasingly difficult to arrest if they are allowed to continue unabated, and there is a real risk that this recession could turn into a major depression. We call on the government to convene a cross-party task force as a matter of urgency to strengthen the measures announced last Friday. 

Patrick Allen, Chair, PEF

Will Hutton, Principal, Hertford College, University of Oxford

John Weeks, Council Coordinator, PEF

Ann Pettifor, Co-Director, PRIME

Ha-Joon Chang, Reader in Economics, University of Cambridge

Richard Murphy, Professor of Practice in International Political Economy, City University

Sue Konzelmann, Reader in Management, Birkbeck College

Natalya Naqvi, Assistant Professor in International Political Economy, London School of Economics

Simon Wren-Lewis, Emeritus Professor of Economics, University of Oxford

Daniela Gabor, Professor of Economics and Macrofinance, University of the West of England

Carolina Alves, Joan Robinson Fellow, Girton College, University of Cambridge

Michael Jacobs, Professorial Research Fellow, Sheffield Political Economy Research Institute

This letter was published in The Times and signed by a number of academics and economists, including the above members of the PEF Council. Photo credit: Flickr/Nenad Stojkovic.

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Dear Andrew Bailey,

Congratulations on your appointment as Bank of England governor. We wish you all the best in your new role.

You are taking up this post at a time when the financial system faces a reckoning with the climate crisis. This decade will be a period of profound upheaval, as markets react to extreme weather events occurring with greater frequency and further interventions by governments to curb emissions. We applaud the work you have done at the PRA and FCA to advance understanding of the challenges ahead.

To mitigate the worst effects of the crisis and meet the goals of the Paris Agreement, the transition to a zero-carbon economy must be urgently accelerated. Governments bear the primary responsibility for driving this shift, via regulation, taxes, subsidies and public investment.

Central banks also have an essential role to play. While governments have committed to limit the global temperature rise to as near as possible to 1.5°C, the financial system – as the Bank has previously warned – is still financing emissions that will trigger runaway warming that exceeds 4°C. Unless financial flows are urgently reoriented, our efforts to address the climate crisis have no chance of success.

Banks and insurers, and the financial system as a whole, face catastrophic consequences if they fail to adapt. If warming is left unchecked, extreme weather events will cause devastating losses. And if markets fail to anticipate regulation that makes future activity unviable, carbon-exposed firms and their supply chains could see a sudden and significant drop in value.

Central banks’ regulatory regimes and monetary policy operations can guide the reallocation of capital, so that markets are aligned with the Paris climate goals as quickly and smoothly as possible. Given the UK’s position at the crossroads of global finance, the Bank of England’s role is especially important.

The Bank already has a strong foundation on which to build. The first stress tests on climate risk will help to identify potential shortfalls in firms’ ability to withstand shocks, and force them, where necessary, to change course. The move towards comprehensive disclosures of climate risks by banks and insurance companies will make it easier for investors to assess their exposure, issuers to reprioritise their long-term investment strategies and for regulators to identify weaknesses across the system. This has been galvanised globally by the Task Force on Climate-related Financial Disclosures, and UK adoption has been encouraged by the PRA’s new supervisory statement. The Bank has also pledged to disclose the climate-related financial risks across its entire balance sheet, we hope including assets purchased under its quantitative easing programme, which will set an important example to firms across the sector.

But due to the short time horizons of most actors and the methodological limitations inherent in quantifying climate risk, these measures alone are unlikely to be enough. This problem is outlined in the recent Bank of International Settlements and Banque de France publication, ‘The Green Swan’. For as long as the financial system is aligned with a temperature rise beyond 1.5C, it is exposed to unacceptable climate-related financial risks, both from extreme weather events and the effects of future shifts in policy. For central banks to effectively discharge their duty to protect financial stability, they must use all the tools at their disposal to realign finance with internationally-agreed climate targets. With the UK hosting COP26 this year, the world is looking to you to lead the way.

We believe that three specific steps would help to put the financial sector on the right path. Firstly, the Bank should work with the government to put climate-related disclosures on a mandatory footing as soon as possible, in order to provide a comprehensive picture of the financial sector’s exposure. Secondly, we urge you to lead by example, and pledge to exclude fossil fuel assets from the Bank’s future bond purchases and collateral framework, starting with any exposures to coal. This will send a powerful signal that holding these assets undermines long-term financial stability, and is incompatible with the Paris goals. Finally, we urge you to consider adjusting the Bank’s macroprudential framework, so that the risks associated with high-carbon loans are more accurately reflected in the amount of capital banks hold against them.

Given the implications of climate change and the low carbon transition for financial and price stability, the above actions clearly fall squarely within the mandate of the Bank. You can count on our support in your efforts to respond to the climate crisis, and we look forward to hearing about your plans.

Yours sincerely,

Fran Boait, executive director, Positive Money
Miatta Fahnbulleh, chief executive, New Economics Foundation
Doug Parr, chief scientist and policy director, Greenpeace
Ulrich Volz, director, SOAS Centre for Sustainable Finance
Kate Levick, programme leader, E3G
Prashant Vaze, head of government & policy, Climate Bonds Initiative
Nick Robins, professor in practice for sustainable finance, LSE Grantham Research Institute
Sir David King, partner, SYSTEMIQ
Willem Buiter, visiting professor of international and public affairs, Columbia University
Dr Jane Goodall DBE, founder, the Jane Goodall Institute
Rosalyn Schofield, member, Committee on Climate Change Adaptation Committee
Steve Waygood, chief responsible investment officer, Aviva Investors
Michael Izza, chief executive, Institute of Chartered Accountants in England and Wales
Martin Shaw, chief executive, Association of Financial Mutuals
Paul Nowak, deputy general secretary, Trade Union Congress
Yanis Varoufakis, professor of economics, University of Athens
Zamzam Ibrahim, president, National Union of Students
Steven Croft, Bishop of Oxford, Church of England
Maggie Rae, president, Faculty of Public Health
Adam Tooze, director, European Institute
Bevis Watts, chief executive, Triodos Bank UK
William Blyth, associate fellow, Chatham House
Jenna Hegarty, deputy director, policy and advocacy, RSPB
Georgina Mace, professor of biodiversity and ecosystems, UCL
Keith Bell, professor of smart grids, University of Strathclyde
Rebecca Willis, professor in practice, Lancaster Environment Centre, Lancaster University
John Barry, professor of green political economy, Queens University Belfast
Benjamin Sovacool, professor of energy policy, University of Surrey
Dale Southerton, director, Cabot Institute for the Environment, University of Bristol
Ben Caldecott, director, Oxford Sustainable Finance Programme, Oxford University
Fr Damian Howard SJ, provincial superior, British Jesuits
Mardi Mcbrien, managing director, Climate Disclosure Standards Board
Paul Simpson, chief executive officer, Carbon Disclosure Project
Lauren Compere, managing director, Boston Common Asset Management
Jonathan Porritt, founder & director, Forum for the Future
Hector Politt, director, Cambridge Econometrics
Bill McKibben, co-founder, 350.org
Thomas Hale, associate professor of global public policy, Blavatnik School of Government, Oxford University
John Muellbauer, professor of economics, Oxford University
Nadia Ameli, principal research fellow, UCL Institute for Sustainable Resources
Kate Raworth, senior teaching associate, Environmental Change Institute, Oxford University
Ashley Taylor, senior private sector advisor, Christian Aid
Ann Pettifor, director, Policy Research in Macroeconomics
Jo Pike, chief executive, Scottish Wildlife Trust
Matthias Kroll, chief economist, World Future Council
Paul Gambles, managing director, MBMG Investment
Danny Dorling, professor of geography, Oxford University
Janie Oliver, executive director, Ecumenical Council for Corporate Responsibility
Louisa Davison, steering group, Citizens’ Climate Lobby UK
Mark Blyth, professor of international economics, Brown University
Tim Jackson, director, Centre for Understanding of Sustainable Prosperity
Shaun Spiers, executive director, Green Alliance
Peter Sweatman, chief executive, Climate Strategy & Partners
Alberto Botta, senior lecturer in economics, University of Greenwich
Jason Hickel, senior lecturer, Goldsmiths, University of London
Gerhard Kling, chair in finance, University of Aberdeen
Rens Tilburg, director, Sustainable Finance Lab
Andrew Denis, fellow emeritus, Department of Economics, City, University of London
Felix FitzRoy, emeritus professor, School of Economics & Finance, University of St Andrews
Panicos Demetriades, professor of financial economics, University of Leicester
Jonathan Michie, professor of innovation & knowledge exchange, Oxford University
Hugues Chenet, honorary senior research fellow, Institute for Sustainable Resources, UCL
Phil Haynes, professor of public policy, University of Brighton
Rick Van Der Ploeg, professor of economics, Oxford University
David Tyfield, reader in environmental innovation and sociology, Lancaster University
Julia Steinberger, professor of social ecology and ecological economics, University of Leeds
Johan Frijns, director, BankTrack
Steve Keen, honorary professor, UCL
Christine Cooper, chair in accounting, University of Edinburgh Business School
Ozlem Onaran, professor of economics, University of Greenwich
Ioannis Ioannou, associate professor, London Business School
Josh Ryan-Collins, head of research, UCL Institute for Innovation and Public Purpose
Jacob Funk Kirkegaard, senior fellow, Peterson Institute for International Economics
David Comerford, lecturer in economics, Strathclyde Business School
Eric Lonergan, economist
Jeremy Leggett, founding director, Solarcentury
Justin Guay, director global climate strategy, The Sunrise Project
Victor Anderson, Global Sustainability Institute, Anglia Ruskin University
Maria Nikolaidi, senior lecturer in economics, University of Greenwich
Neil Lancastle, senior lecturer, Department of Accounting and Finance, De Montfort University
Anna Laycock, chief executive officer, Finance Innovation Lab
Oliver Greenfield, convenor, Green Economy Coalition
Yannis Dafermos, lecturer in economics, SOAS University of London
Paul De Grauwe, John Paulson Chair in European Political Economy, LSE
Sophie Neuburg, executive director, Medact
Daniela Gabor, professor of economics and macro-finance, University of the West of England
Matthew Olczak, senior lecturer, Aston Business School, Aston University
Dimitri Zenghelis, visiting research fellow, LSE Grantham Research Institute
Jay Cullen, professor of corporate law and financial regulation, University of York
Molly Scott-Cato, professor of green economics, University of Roehampton
Peter Rice, managing director, Clearpoint Advisors
Andrew Jackson, research fellow, Centre for the Understanding of Sustainable Prosperity
Daniel Bailey, senior lecturer, Manchester Metropolitan University
Richard Murphy, professor of practice in international political economy, City University, London
Patrick Allen, chair and founder, Progressive Economy Forum
Kjell Kühne, director, Leave it in the Ground Initiative Catherine Howarth, chief executive, ShareAction
Victoria Chick, emeritus professor of economics, UCL
Scott Kelly, research director, Institute for Sustainable Futures
Nicky Bull, chair, Operation Noah
Mark Campanale, founder & executive chair, Carbon Tracker Initiative

Photo credit: Flickr/It’s No Game.

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The event will be introduced by Patrick Allen (Chair of PEF). On the panel will be:

• Alfie Stirling, Head of Economics, New Economics Foundation
• Carys Roberts, Chief Economist and Head of the Centre for Economic Justice, Institute for Public Policy Research
• Avinash Persaud, Founder and Chairman, Intelligence Capital (by video-link)
• Robert Palmer, Executive Director, Tax Justice UK
• Prem Sikka, Professor of Accounting, University of Sheffield, and Emeritus Professor, University of Essex (written statement supplied)

This will be followed by a Q&A session with economists, policymakers and journalists.

While there have been immediate responses from the media on the manifestos, this workshop will offer measured economic analysis, with experts on relevant policy areas sharing their assessments of the parties’ pledges and costings. By providing detailed, analysis of policies and their costings, the workshop aims to help improve public debate on economic policy for the forthcoming election.

Event details:                                       Contact details:

1PM – 2.30PM                                       Adam Peggs

Hodge Jones and Allen                         apeggs@progressiveeconomyforum.com

London                                                  07479973727

NW1 2NB

Notes:

The Progressive Economy Forum was founded in May 2018 and brings together a Council of eminent economists and academics to develop a new macroeconomic programme for the UK.

The forum seeks too:

1. Advance macroeconomic policies that address the modern challenges of environmental breakdown, economic insecurity, social and economic inequalities, and technological change.
2. Encourage the implementation of these policies by working with progressive policymakers and improving public understanding of economics.

To these ends, we publish research and policy proposals, run a wide variety of events, and manage a blog featuring authoritative analysis from progressive economists and academics.

The Forum was founded by Patrick Allen who is Chair of the Council. The Forum is not aligned to any political party.

The post Press release: PEF to host workshop analysing party manifestos and costings appeared first on The Progressive Economy Forum.

We write to support the proposal from the Labour party for a public programme to provide rapid internet service to the entire population (Broadband ‘communism’? They said that about the NHS, Journal, 19 November). This project would have a high social and economic rate of return, especially at current borrowing rates.

Since it would be socially profitable, the objection that the proposal is an election “giveaway” should not be taken seriously – that is not an objection raised for other infrastructure projects such as airports and motorways.

Arguments from self-interested corporations that a public sector programme would discourage private sector investment should be seen as unfounded special pleading. This pleading also ignores the fact that this network would create many more opportunities for web content providers to profit in a space where something approaching a real market operates, and is, therefore, decidedly selective in its view. Finally, to claim that this is an activity more appropriate for the private sector is a political assertion that fails to take account of the manifest failure of private companies to provide a broadband network accessible to all.

Patrick Allen Chair, Progressive Economy Forum, John Weeks Emeritus professor of Development Economics, Soas, Ha-Joon Chang University reader in the political economy of development, Cambridge University, Danny Dorling Halford Mackinder professor of geography, Oxford University, Susan Himmelweit Emeritus professor of economics, Open University, Will Hutton Principal of Hertford College, Oxford University, Johnna Montgomerie Reader in international political economy, King’s College London, Richard Murphy Professor of political economy, City, University of London, Guy Standing Professorial research associate, Soas, Sue Konzelmann Reader in management, Birkbeck, University of London, Stephany Griffith-Jones Financial markets director at the Initiative for Policy Dialogue, Columbia University, Daniela Gabor Professor of economics and macrofinance, University of the West of England, Natalya Naqvi Assistant professor in international political economy, LSE

The post Economic benefits of Labour plan to provide free broadband for all appeared first on The Progressive Economy Forum.

The review included three members of the PEF Council: Professor Daniela Gabor (Chair of the review, Professor of Economics and Macrofinance, UWE), Ann Pettifor (Director of PRIME Economics) and Professor Michael Jacobs (Professorial Fellow, SPERI).

The full report can be read here.

Photo credit: Wikimedia Commons.

The post Finance and Climate Change: A Progressive Green Finance Strategy for the UK appeared first on The Progressive Economy Forum.

A new book, from the Progressive Economy Forum and Policy Research in Macroeconomics and published by Policy Press explores those policies.

Social and economic policies are rarely communicated clearly to the public, but it’s never been more important for citizens to understand and contribute to the debate around the country’s future.

In everyday language, Rethinking Britain: Policy Ideas for the Many presents a range of ideas from some of the country’s most influential thinkers such as Kate Pickett and Ha-Joon Chang. From inflation to tax, and health to education, each contribution offers solutions which, if implemented, would lead to a fairer society.

Curated by leading economists from the Progressive Economy Forum and Policy Research in Macroeconomics (PRIME) and accompanied by a ‘jargon buster’, this book is an essential aid for citizens who are interested in critiquing inequalities while looking to build a better future.

Rethinking Britain: Policy Ideas for the Many is edited by PEF Council members Sue Konzelmann, Susan Himmelweit and John Weeks and Jeremy Smith, co-director of PRIME. Due for release on 19th September 2019, you can pre-order a copy here.

The post Rethinking Britain: Policy Ideas for the Many appeared first on The Progressive Economy Forum.

Eleven o’clock on Wednesday evening is the deadline for applicants to put themselves forward to be the next governor of the Bank of England. Candidates are asked to commit to an eight-year term lasting until 2028. By then the world will be a very different place. Three key trends will shape their time in post.

First, environmental breakdown is the biggest threat facing the planet. The next governor must build on Mark Carney’s legacy, and go even further to act on the Bank’s warnings by accelerating the transition of finance away from risky fossil fuels. Second, rising inequality, fuelled to a significant extent by monetary policy, has contributed to a crisis of trust in our institutions. The next governor must be open and honest about the trade-offs the Bank is forced to make, and take a critical view of how its policies impact on wider society. Third, the UK economy is increasingly unbalanced and skewed towards asset price inflation. Banks pour money into bidding up the value of pre-existing assets, with only £1 in every £10 they lend supporting non-financial firms. The next governor must seriously consider introducing measures to guide credit away from speculation towards productive activities.

As the world around it changes, the function of the Bank itself must evolve. Its current mandate and tools are increasingly coming into question, and a future government may assign the Bank with a new mission. The next governor must meet this with an open mind, not seek to preserve the status quo. To equip the Bank to meet the challenges of the future, the new governor will also need to ensure it benefits from a greater diversity of backgrounds, experience and perspectives throughout the organisation. The Bank of England’s own stated purpose is to promote the good of the people. We need a governor genuinely committed to serving the whole of society, not just financial markets.

Fran Boait Positive Money
Josh Ryan-Collins UCL IIPP
John Sauven Greenpeace UK
Tom Kibasi IPPR
Craig Bennett Friends of the Earth (England, Wales & Northern Ireland)
Will Hutton Author and academic
Patrick Allen Progressive Economy Forum
Faiza Shaheen Class
Ann Pettifor Prime Economics
Kate Raworth University of Oxford
Christopher Pissarides London School of Economics
Yanis Varoufakis University of Athens
Prem Sikka University of Sheffield
Danny Dorling University of Oxford
Asad Rehman War on Want
Guy Standing SOAS
David Hillman Stamp Out Poverty
Catherine Howarth ShareAction
Maeve Cohen Rethinking Economics
Jonathan Michie University of Oxford
Natalie Sharples Health Poverty Action
Joe Guinan The Democracy Collaborative
Nick Dearden Global Justice Now
Steve Keen UCL Institute for Strategy, Resilience & Security
Jason Hickel Goldsmiths, University of London
Tony Greenham Royal Society of Arts
Johnna Montgomerie Kings College London
John Weeks SOAS
Frances Coppola Financial commentator and author
Dimitri Zenghelis Cambridge University
Rick Van Der Ploeg University of Oxford
Molly Scott Cato University of Roehampton
Ben Carpenter Social Value UK
Philippe Aghion London School of Economics
Felix Fitzroy St Andrews
Marianne Sensier University of Manchester
Christine Cooper University of Edinburgh
Elisa Van Waeyenberge SOAS
Roberto Veneziani Queen Mary University of London
Andrew Denis City University
Stewart Lansley University of Bristol
Dimitris Sotiropoulos Open University UK
Ulrich Volz SOAS
Panicos Demetriades University of Leicester
Maria Nikolaidi University of Greenwich
Julia Steinberger University of Leeds
Sue Konzelmann Birkbeck University
Roger Seifert Wolverhampton Business School
Ozlem Onaran University of Greenwich
Neil Lancastle De Monfort University
Yannis Dafermos University of the West of England
Alberto Botta University of Greenwich
David Tyfield Lancaster University
Kate Pickett University of York
Philip Haynes University of Brighton
Richard Wilkinson University of Nottingham
Peter Sweatman Climate Strategy & Partners
David Graeber London School of Economics
Richard Murphy City University
John Christensen Tax Justice UK
Anna Laycock Finance Innovation Lab
Colin Hines Green New Deal Group
Sarah-Jayne Clifton Jubilee Debt Campaign
Line Christensen Jubilee Scotland
Stewart Wallis Wellbeing Economy Alliance
Benjamin Braun Max Planck Institute for the Study of Societies (MPIfG)
Fiona Dove The Transnational Institute
Annelise Riles Buffett Institute for Global Studies
Ellen Brown Public Banking Institute
Johan Frijns Banktrack
Benoît Lallemand Finance Watch
Joshua Farley International Society for Ecological Economics
Ole Bjerg Copenhagen Business School
Stephany Griffith-Jones Columbia University
David Boyle The New Weather Institute
Mark Blyth Brown University
Bernard Barthalay Université Lumière (Lyon)
Giorgos Kallis Universitat Autònoma de Barcelona
Jean-Marc Ferry Alliance Europa
Joseph Huber Martin Luther University of Halle-Wittenberg
Ladislau Dowbor Catholic University of São Paulo
Livio Di Matteo Lakehead University
Marc Lavoie University of Ottawa
Mark Sanders Utrecht University
Sergio Rossi University of Fribourg, Switzerland
Michel Lepetit The Shift Project
Dirk Ehnts Technical University of Chemnitz
Johann Walter Westfälische Hochschule Gelsenkirchen
Steven Hail University of Adelaide
Ludovic Desmedt University of Burgundy
Terrence McDonough National University of Ireland Galway
Rodrigo Fernandez Centre for Research on Multinational Corporations (SOMO)
Jean Luc de Meulemeester The Solvay Brussels School of Economics and Management

Photo credit: James Mitchell / Flickr

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