Our macroeconomic reliance on debt, and the focus on aggregate demand, is based upon a wide Keynesian consensus.
Less attention is paid to the savings that must provide the funding for investment, the centrality of assets and importance of the core infrastructure systems – natural and conventional. Microeconomic principles, such as the polluter pays and public money for public goods, provide guides for developing sustainable government policies.
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Podcast 93: Some new faces, same old problems
Following on from the latest change of Prime Minister and announcements about his new Cabinet, what is going to change? Andy Burnham has a new ten-year plan, and is promising a fundamental revision of politics, but Britain’s deeper economic problems remain unresolved. The fact is, underneath the headlines, the country is still trying to live… Read more…
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How much debt should a water company take on?
Following on from OFWAT’s 55% indicative preferred gearing, signals from DEFRA are that it would like to make this a legally binding upper limit. At first glance this sounds like a good idea. It would prevent the sorts of gearing that have got Thames Water into trouble and which might yet bring others down in… Read more…
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Podcast 92: Hotter days
Climate policy must be judged not by good intentions, but by its real-world costs, impacts and global effectiveness. Renewables alone cannot deliver cheap, secure and clean energy. The wider costs of electricity systems, storage, back-up power and networks also need to be taken into account. The UK’s choices need to be seen in the international… Read more…
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Podcast 91: Beyond the nationalisation slogan
With the renewed political enthusiasm for nationalisation, what, in practical terms, does it mean and what would actually change? How might “Manchesterism” apply in practice? Using buses, rail, water and electricity as examples, in this podcast I argue that public ownership and public control are not the same thing, and that different sectors require different… Read more…
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The regulated asset base – the concept, tradeable RABs, the split cost of capital, and pay-as-you-go versus pay-when-delivered
Origins and context The regulated asset base (RAB) was brought in after privatisations. When the initial prices to customers were set, they were essentially based upon what current pre-privatisation charges had been, in some cases juiced up to attract more investor interest and a higher value at privatisation. These initial prices, carried across to the… Read more…
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Podcast 90: Why can’t we build infrastructure in this country?
Politicians have been seeking for decades to put right the infrastructure crisis in this country that is rooted not in a lack of ambition, but in deeper economic and political constraints. Building in Britain is exceptionally costly, with high energy prices, high labour costs and high financing costs making major projects difficult to deliver at… Read more…
