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Growth that Lasts: A fair, green and sustainable economy

March 14, 2010 11:30 PM
By David Goodall in Liberal Democrat Spring Conference 2010

Good morning conference with all the talk of credit crunch, banking crisis and mountains of debt one could forgiven in thinking that was the main problem facing the world was one financial services and that to create a fairer economy all that has to be done is to create a better banking system.

Yet that is far from true the bankers in the city of London make money but they do not create wealth. The people that create wealth are those that take on the loans, repay them with interest and still make enough money to pay a workforce and return a profit.

In the future these people will be industries making in products for a greener and more sustainable world, because the greatest problem in the world today is not a financial sector meltdown, as serious as that may be, but climate change.

Now to achieve the green sustainable economy we of course need a working banking sector but it must be reformed. Many people would say that -

• What out put into life will match by what you get out

• Or that in the business world - work and risk are balanced by reward

However in today Britain the banking crisis has highlighted that this is not the case.

• The banks made the investments,

• we the taxpayer bailed out the whole sector when those investments turned bad,

• we the taxpayer are still underwriting the whole sector,

• banks are still making money

• and the bankers are still getting the large salaries and bonuses.

When in any other sector of the economy the bankers would be out of job. Now is that fair I don't think so. So what should be done:-

• The retail banking sector and the casino style commercial banking sector should be split apart.

• Retail bank lending should be much more tightly regulated and in exchange for this should then received the support they current have, so that the likes of you and me do not lose our savings or our homes.

• The commercial banking sector would have less regulation than the retail side, but if the investments go wrong the commercial bank should not be bailed out and should be allowed to fail. Rewards must equal risk.

• And there should be greater support for manufacturing industry with regional stock exchanges support local entrepreneurs and a UK Investment Bank should be created to invest the large infrastructure projects that are required

Now with a reformed financial sector we can invest in the technologies of the future.

Yet despite the words by William Blake in Jerusalem we not in England's green and pleasant land, we are in Brown's Britain

Today in Brown's Britain is the place where the current lack of investment in wind turbines directly led to 425 job losses at the Vesta factory in my Southampton Itchen constituency and on the Isle of Wight.

And one of the main reasons given by Vesta to move production to US was that the UK government was failing to put its plans for more renewable energy into practice.

Specifically there was a lack of clear planning guidance to local government in favour of wind power and lack of investment in the electricity transmission grid to make it better for distributed renewable energy systems like wind.

And in Brown's Britain we have two major parties in the Labour and Conservative parties that have failed and continue to fail to even see the problem let alone have credible solutions.

Fortunately for the country there is one major political party that does recognise the problem and has credible solutions - the Liberal Democrats. Conference back the motion and together lets start to build a fairer, greener and more sustainable future for all.

Background note:

The UK has 40% of Europe's entire natural wind energy resource, we live on an Island surrounding by a large tidal power resource, and we have some very large rivers. All of these can and should be used to generate power as we move from a high carbon use to a low carbon use country.

All of these new technologies should also generate jobs in this country. Yet on the London array off shore wind turbine project 90% of the jobs created are being generated aboard, because we don't have the facilities in the UK for very large wind turbine production.

This is why the Liberal Democrats would invest in the UK's shipyards to develop the facilities to build these huge wind turbines.