Green Investment Bank fail

One minute investment banks are the scourge of society, the next they’re a panacea for all an economy’s ills. Pile of utter fucking shite either way if you ask me.

Starting with the scourge and the barbarians at the gate thang, investment bankers receive far too much money for doing deals that deliver no added value over the medium to long term both to the shareholders involved and the actual economy as a whole, is how the argument usually goes. And all that strikes me – enviously if honest, given the wages and bonuses they get – as containing a large chunk of truth, which prompts the question well how da fuck have they been getting away with it for decades then?

State initiated investment banks on the other hand are apparently the panacea for all an economy’s ills according to yer average career politician regardless of whichever party they happen to be in. Hence, all the current shite about establishing a green investment bank. Now the rhetoric here is fantastic – a green investment bank is an economic imperative that will build a hi-tech, future-proofed economy, it’ll ensure Britain maintains its global lead in renewable technologies, generate ‘000s of new jobs by capitalising on established, cutting edge technical competencies, leverage existing engineering and innovation infrastructures and act as a transformative capital provider that will underpin the transformation of I don’t know, things that presumably need transformed. All utter fucking bollocks really, like pure rhetorical shite and fuck all else for the most part.

Like I mind hearing some politicians spout off about it and what became utterly fucking clear was that they didn’t have a fucking clue about any of it. Like knowing an investment bank provides equity not debt would have been a good starting point (that and knowing the difference between equity and debt, obviously). Then following on from that there was the question of at what stage should the investment bank start investing e.g. should it focus on the venturing side and finance blue sky thinking in the first instance? Or what about financing taking an already proven technology to market, or marketing an already established products or is it all simply providing the equity needed to go along with the debt for proven technologies in project finance type situations such as a new windmill farm as opposed to a wave based thingy? And how should these decisions be taken, like are we looking to establish however many committees chock full of ignorant place men and all the vested interests and expenses claims that entails or instead is it actual private equity/investment bods that would decide when and how much to invest given all that entails in terms of them getting wages that are however many times the Prime Minister’s? All of the above boring, practical stuff just seems to be flim-flam getting in the way of a politician telling us how the government is INVESTING in a sustainable future or some other such fucking shite.

The other thing of course is that the actual sums being talked up are fucking pitiful. The £1 billion capitalisation Nick Clegg wanked on about is fuck all when you compare it to say the 75 billion Euros in bonds raised by an existing German state investment bank. Rather, the reality is £1 billion is an arbitrary figure that lets politicians say billion a lot with a bilious emphasis on the “BILL” as if them coming across as if they have a speech impediment fucking counts for something.

I was going to wank on a bit at this point about the Macmillan gap identified in the 1930s, the subsequent creation, then eventual reorganisation of 3i and the associated positive role government funded capital investment can play in an economy where the provision of equity finance definitely was subject to market failure on a sustained, systematic basis. But, I’ve some beers on the go so feck it.

What all this does provide though is a lovely context for the 2011 budget when it arrives on March 23rd and all the sound bite shite about growth that’ll contain.

Like so far my impression is the ConDem government is really and I mean really gunning for libraries and disabled people, cos you know those are exactly the kind of nasty fuckers that are asking for it. At the same time it’s already hacking back on public sector investment to an extent that hugely outweighs all this green investment bank shite (1). Rather, the latter will simply be an exercise in political sleight of hand. Like if you were to point out however many libraries are going to close, the response will be, ahh, but we’re establishing a green investment bank. Or if you pointed out however many home helps are being made redundant, the response would again be ahh, tough choices and we’re establishing a green investment bank, and so on and so on.

Personally, the only debate the above prompts is what type of cunts politicians are. On the one hand you’ve the ConDems simply setting themselves up to prove once again that they are indeed snidey cunts. On the other you’ve got the Scottish parliament voting to build a new Forth Road bridge last December (that it’s currently forecast to cost £2.3bn provides yet another benchmark for the fuck all capital base of the Green Investment Bank). The overwhelming sense I had when the MSPs voted for the new bridge was of a shiteload of mediocre shifters desperately wanting to do and to be seen to be doing something in a half-arsed, unthinking Keynesian multiplier kind of way. I reckon on balance they were well-intentioned when they voted the way they did. I also reckon they did sowhile applying fuck-off selective memories when it comes to the deep inability of government to deliver major capital projects in Scotland (e.g. the parliament and the Edinburgh trams) and what that means in terms of the general public having to eventually cough up fucking shed loads more and lose out on public services to cover their asses. So yeah, what’s worse – snidey cunts or fucking useless cunts, you decide.


(1) To quote the Institute for Fiscal Studies’ latest public sector spending note - “Public sector net investment over the first ten months of this financial year has been £28.1bn, which is 20.8% lower than in the same months of 2009−10” i.e. the year to date figure for January was almost £6bn down on the previous year. Compare that with a £1bn fucking green investment bank, then wonder how fucking stupid do politicians think we are (the answer is very and they’ve got a point).

Strategy, structure and big 'ol titt!es

As Alan Johnson proved politicians are rarely the best when it comes to economics, but they do try and talk a good game. Hence, Nick Clegg’s speech outlining how government is “determined to foster a new model of economic growth, and a new economy”. Key to this and every piece of shit politician’s speech is their use of the word “billion”*, a number that in our national lottery age represents more than most ordinary punters could ever imagine having.

Politicians know this so deliberately use “billion” to convey the seriousness and/or importance of things e.g. a debt measured in billions is a big and serious debt – cue stern faces all round. Similarly, a government initiative costing a billion – cue open hand gestures, gentle taps on lectern then a statement pronounced in a slightly higher pitched voice – means the government is serious about something. Except, when it comes to establishing a “new model of economic growth” a billion is fuck all so by implication the point of Clegg's speech - to present the notion that the current government's economic policy is about more than spending cuts - was a bag of shite.

To illustrate why here’s an concrete example of what a billion and some change will actually get you - in 2009 this company owned 42 UK hotels and conference venues in the UK as well as a chain of gyms. Am guessing the bulk of this was financed, ignoring the equity, with the £1.4bn mentioned in the article. So on a rule of thumb basis £1.4bn will buy you 42 hotels and conference venues plus some gyms.

Now back to Nick Clegg – “The Government is also committed to the creation of a Green Investment Bank, with funds of at least £1 billion, to enhance the necessary investment in low-carbon growth”. There’s lovely, except that’s not even enough to buy 42 hotels and conference venues let alone some gyms. Green economic revolution? You're 'avin a turkish mate.

But, s’ok cos Nick also said “We have announced an investment of more than £200m over the next four years in a network of technology and innovation centres, modelled on the German “Fraunhofer Institutes”. Really? So will these also do things like establish the deep infrastructure of skills, contacts, knowledge, reputation, training etc., that actually underpins the competitive advantage German’s mittelstand of mid-tech engineering and manufacturing companies have and we don’t due to the structural decline of manufacturing in Britain? I don’t fucking think so. Howzabout instead of yet another mickey mouse be seen to be doing something scheme we add the £200m to the Green Bank’s £1bn, then see if we can negotiate to buy 42 hotels and conference centres instead (but without the gyms)?

Oh, but hang on reading to the fag end of the speech it turns out we’re also establishing a “£1.4 billion Regional Growth Fund”. At fucking last, finally the government is so serious about something its establishing a fund big enough to buy 42 hotels and conference centres AND some gyms. Now we know they mean business (or is this regional growth fund made up of money taken from other initiatives?),

Back to the bullet points in Clegg’s speech though cos they sound lovely, except they're actually fucking pants.

He said: "Weaning ourselves off debt-financed growth, and onto investment-led prosperity" – Cool, except debt is used to finance investment, you can’t have either or like fer instance am guessing the Green Investment Bank will gear up each of its investment with debt as a matter of course.

He also said: "Investing in the ‘hard’ infrastructure that underpins growth, such as transport" – Cool 2x, except that’s just tarting up the fact the only fucking infrastructure spending left is on roads as opposed to additional, mad mental wasteful shit like schools. ut, he did get to say "hard", oo-er missus etc.,

Then he said: "Cultivating the ‘soft‘ infrastructure made up of knowledge, skills and education that businesses need" – Cool 3x, except how the fuck do you reconcile that with the changes to university funding? Simple. You don’t cos you can’t.

Finally, he said: "Balancing regions and sectors, instead of putting all our economic eggs in one basket" – Cool 4x except as the local authority spending review in England and Wales made clear and as public sector spending cuts will exacerbate over the next 3 years at least, those regions more reliant on the public sector are humped, which will create ever greater regional imbalances when it comes to things like unemployment, wage levels, health, quality of life and so on (but, it will also fuck scousers so not all bad)

And it turns out “Tim Stone, chairman and founder of KPMG's Global Infrastructure and Projects Group” is advising government on its national infrastructure plan, which is like turkeys asking Bernard Matthews (god rest his soul) for diet tips. Nah, all a pile of fucking shite really.

As for the alternative, the “promise” shite Labour is coming out with is almost too depressing for words. First they ripped off the US Democrats with the squeezed middle and now they’re ripping them off with that shit an’all, What a useless bunch of spod-led cocks too wank to even come up with their own empty fucking rhetoric. Instead, all we’re left with is a dismal reality where things like this, as a fabulous person I know pointed out to me are happening.



* This point originates in some comedy thing Nigel Planer did years back I think called the "Actor's Studio with Nicholas Craig"