QE paid for covid – now it needs to pay for the climate

Farm Homestead Storm House Farm House Meadow

The Guardian’s Business Green editor, James Murray, was correct that to undermine the claims of the pro-fossil fuel Net Zero Scrutiny Group in Parliament, it is vital to explain how the enormous upfront costs of the transition to net zero can be met – but not at the expense of the poor.

The fact is that a just transition to net zero is easily affordable, and poorer people and the increasingly squeezed middle class won’t have to suffer in the process. Of course, a windfall tax on Shell’s and BP’s present licence to print money is a key first step, but the question is: where will the bulk of the many tens of billions that are required come from?

The key to answering this is to realise that the entire cost of tackling the covid crisis was funded by a £450bn expansion of the quantitative easing programme. This money creation programme now needs to be expanded again to fund a post-covid recovery that tackles not just the climate emergency, but also the cost-of-living crisis and the inequality of social provision.

Also crucial will be the use of government incentivised savings, such as pensions and ISAs, and a fairer taxation system to help achieve these goals.

This combined use of QE, savings and tax, should be encapsulated in a political rallying call for a QuEST (QE, savings, tax) to fund a sustainable future.

Unless these myriad campaigns can seriously answer the question of how do you pay for whatever they are campaigning for, then this failure will be a constant roadblock to their achieving their end goals, especially under this government.

Were this huge range of activists to pressure all opposition parties to take the QuEST route to explaining how to fund whatever policy demands will form the backbone of their manifesto pledges, then – if they also worked together – they should at last see off this government.

However it mustn’t be forgotten that the Net Zero Research Group is a serious threat, since it is an offshoot of the European Research Group of less than 30 Tory MPs, which along with Nigel Farage and finally Boris Johnson were the grimly effective triumvirate that brought us Brexit.

Such a combined approach outlined above as a QuEST to fund a better future, has to be the way forward, not a return by Rishi Sunak (whether PM or Chancellor) to a kind of Thatcherite austerity now nearly half a century out of date.

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