Tuesday, 24 February 2015

What's so tricky about borrowing?


Andrew Fisher has some advice for Natalie Bennett following her 'car crash interview' on LBC this morning

Like many I listened online to Natalie Bennett's interview about Green Party housing policy this morning on LBC radio. It was embarrassing, awkward and a wasted opportunity for a left voice to make the case for building more "homes for social rent" as Bennett put it.

You can listen to the interview, and Bennett's continued insistence that it's all "fully costed" without being able to explain how - either what is the cost of building the 500,000 homes or how it will be funded.

But all this was painfully unnecessary because when Ferrari asked "how will you pay for it?" the one word reply should have been "borrow". Infrastructure investment that creates skilled jobs is exactly the sort of thing I thought Greens backed to invest in the future.

Of course Ferrari would have attacked the "borrow" answer, but then you patiently explain that "like you Nick, when you bought your house, I expect you took out a mortgage - massive borrowing - like thousands of us do. You take on that massive debt because in the long run you're better off by doing so."

"But the country is already in massive debt - and you want to add to that?" Ferrari might have responded. "The UK can borrow at historically low levels currently, and look at all the council housing that we have today - that was built on debt. We borrowed to build it, and it gave us a return because people pay rent."

"Not all of them", says Ferrari, "most are on housing benefit". "In some cases yes, but at the moment we're paying higher than council level rents to private landlords. Instead we'd be paying lower rents to another arm of government."

And that is what Natalie and the Greens should be saying.

Instead though we have a stupid consensus that seems to be advising both Labour, and now the Greens too, not to commit to any borrowing, as if it's a bad thing. This is the consensus of the terrified, afraid to break the anti-debt consensus.

It is ironic when Osborne has spent the last five years borrowing for failure, we should be borrowing for growth to actually close the deficit. The left can win the debate on borrowing, but only if we make the sensible argument.

Bias?

I quite like Natalie - she's the only party leader I can say I've met socially (before she was leader) - and I support many of the Green Party's policies, and next month will be happily sharing a platform with London Assembly member Jenny Jones. Unsurprisingly, I'm no great fan of Nick Ferrari, LBC's interviewer, but in this interview the problem was all Bennett not Ferrari.

As a Labour Party member I don't make these points for sectarian point-scoring - I posted similarly about Ed Miliband when, nearly two years ago, he made a similar hash of this point on the World at One - and if you look through my posts on here, you'll find I'm not slow to criticise Labour either ...


UPDATE: This document shows how the Greens say they would pay for 500,000 homes for social rent by 2020 (see p.5). I still think borrowing is easier and the money raised from cutting landlords' reliefs could be spent elsewhere - for example investing in renewable energy!

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