A letter published in last weekend’s Observer, Times and Sunday Times:
We urge the UK Government not to heed the siren’s song of the 20 economists who, having failed to predict the crisis, now seek to advise on its resolution.
The world economy is in the deepest recession since the Great Depression. In the UK, output has collapsed by £70bn on an annual basis. Under such conditions, common sense tells us that the government must compensate for the collapse in private investment and address the high level of unemployment.
The only way to restore the public finances to health is to restore the economy to health. And that means public investment (not cuts) to create jobs and income in the private and the public sector. Government should oblige the banks that have been effectively nationalised to lend to the public sector at low rates of interest. Consequent tax revenues raised and savings on benefit expenditure will reduce the public debt. As Keynes observed: “Look after the unemployment and the budget will look after itself.”
There is already a credible plan on the table. It is called the Green New Deal. Invest now and we could kick-start the transformation of the UK’s energy supply while creating thousands of new green-collar jobs, restoring the UK’s skills-base and building the recovery on the manufacture of necessary goods. We urge the government to act now and implement the Green New Deal without delay.
Policy director, nef (the new economics foundation), London SE11
Professor of economics, Dartmouth College
Dr Anastasia Nesvetailova
Assistant professor, international political economy, City University
Emeritus professor of economics, University College London
Senior lecturer in political economy, City University London
Director, Advocacy International
Professor of accounting, University of Strathclyde, Scotland
Convenor, Green New Deal Group
Professorial research fellow, University of London, SOAS
Senior lecturer in banking, Manchester Business School
Professor of accounting, Centre for Global Accountability, Essex Business School
Tax Research LLP
Dr Stephanie Blankenburg
Department of Economics, SOAS
Chief economist, nef