What do the Greens want now?

An interview with James Meadway on a Burnham premiership, public ownership and the “hard truths” the left must face

Today on Arguably, we bring you an interview with economist James Meadway, the co-director of the new Green-aligned think tank Verdant and a former adviser to John McDonnell.

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George Eaton: We’re meeting on the day that the UK has just recorded its highest-ever May temperature. How should Britain adapt to becoming a hot country?

James Meadway: The initial steps were laid out by the last Climate Change Committee report. The ones that stick out are changes to working time – that we work different hours, enforce limitations on work when it becomes too hot and, I would add, start working fewer hours overall. Beyond that, there’s a great deal of planning and spatial policy we could use: more trees everywhere, more public spaces without traffic, the provision of cool spaces for public use. Infrastructure will need additional investment – more transmission wires buried underground, the return of water to public ownership and a plan for future growth taking place outside of congested and stressed regions in the south-east

George: There’s still much debate about precisely what has caused the UK’s economic stagnation since the 2008 crisis. What’s your assessment?

James: The short version is not very much investment – both government and business investment fell off a cliff after 2008. And Britain was never a particularly high-investment economy. IPPR had a good paper on this: over the last 30 years we’ve been consistently at the bottom or second-bottom of the G7 for investment. If you’re not building anything, you’re not going to grow very much.

The other question is why that’s happening. Brexit was a clear shock from which recovery has been difficult, that’s one part of it. The other is the willingness of government to act rather than just seeing itself as a risk-manager or risk-remover for the private sector, never actually really taking the initiative. Plus, a ridiculous focus on the south-east, very consistent across governments, driven by the Treasury in particular. Diane Coyle’s paper on this, The Imperial Treasury, is worth a read. And then the one that’s become increasingly apparent is big international exposure, significant supply chain risk, which adds up to ‘we don’t want to invest here’.

George: At the launch of Verdant earlier this year you spoke of the need for a think tank that is able to speak “hard truths”. What are those?

James: Britain is a rich country and wealth is unevenly distributed but there’s a fantasy that this wealth is endless and our place in the world is at the top somewhere and we can more or less do whatever we want. There’s this slightly magical thinking. ‘If we just change the fiscal rules, everything will look better’ – it would make a marginal difference. ‘We can wish away the bond markets’, well you can’t if a third of your government debt is owed to the rest of the world and you have to import nearly half of the food you eat. You’ve got to be quite hard-nosed about this. There isn’t some version of the world in which getting the Bank of England to print all the money you want is going to resolve this.

The other hard truth is how to think correctly about climate change. We have to stop thinking about it as ‘one day the world is fine, the next day it’s all gone’. Instead, everything is just getting hotter and more difficult, or more flooded and more difficult. You’re more likely to catch a disease than before. You go to the shops and it costs more. Getting people to think about the consequences of living in a world like this is a hard truth for the environmental movement, and most people in the Green Party recognise that. Caroline Lucas, who’s on our board, and Rupert Read are two people who stick out there.

George: Verdant’s first report took perhaps unlikely inspiration from Donald Trump and Elon Musk and called for a ‘Doge of the left’. What does a progressive version of state reform look like?

James: The real inspiration there was Zohran Mamdani talking about how we’re not just here to do big government but good government. He set up an office for savings, quite deliberately saying that we’ll cut back on spending that is not delivering for people in New York.

If you do this seriously, you ask ‘what is the good that the public sector can do and is it doing well?’ Not the Treasury view, which is 5 per cent off everything, sort it out yourselves. Defence procurement and IT procurement are other classic examples. There’s a whole load of areas where there’s an interaction between central government, which wants to do something, and the private sector, which wants to make money, and there’s a breakdown in how that’s supposed to work, so you end up spending more and more on management consultants with really slender evidence that this is actually helping.

We’d set up a separate function in the Cabinet Office, so you’ll have somebody who is a champion for public services, an adjudicator, rather than this totally confrontational approach between departments and the Treasury.

George: You were an adviser to John McDonnell during his time as shadow chancellor. What lessons did you draw from the failures of the Corbyn project?

James: A whole stack of things, one of them is that we cannot, like Jurassic Park, preserve these fossilised creatures in amber and resurrect them millions of years later, or in the Labour left’s case 30 years later. There’s a degree of small-c conservatism on the left, your thinking about the world is backwards-looking. For example, why do we want to nationalise water? The real answer is that we’re approaching a series of crises in which questions over water use are going to become pressing in an unpleasant way – it’s not ‘it shouldn’t have been privatised in the first place’. You need to be alert to the actual conditions we live in and respond to them, not focused on re-running arguments from the 1980s.

George: There’s been much talk of the bond markets and the UK’s fragile position in recent times. How would you have managed that challenge had you entered the Treasury?

James: It wasn’t really a challenge in 2017, we had the lowest interest rates in human history. Even a significant move upwards in borrowing costs would not have spelt disaster at that point. Today, we are no longer in that world, and that’s true for all developed countries – the cost of government borrowing has quintipled in the last five years or so.

We exploited the fact that inflation was low and interest rates were low, which is one reason why Corbynism can’t work now. Jeremy Corbyn didn’t talk about wealth taxes, he had no need to, you could just borrow money and build things.

George: Where do those material constraints leave you on questions such as taking utilities back into public ownership?

James: First of all, everything looks like a question of redistribution, we’re in a low-growth, high-inflation, high-interest rate world. One version of that is around wealth taxes, another is more subtle and around the financial system. The latest figures suggest that we [the taxpayer] will hand over £125bn to the Bank of England to cover the cost of ending quantitative easing. That money is making its way into the coffers of private banks, it’s a subsidy to the private banking system. So another redistribution question is ‘why are we doing this?’ Why are we not introducing tiered reserves, as everybody from Zack Polanski to Richard Tice to Gordon Brown has proposed?

George: Do you feel a tension inside the Greens between former Corbynites such as yourself and more traditional centrist members?

James: I haven’t noticed it myself but my route into this is a belief that the more ecologically-minded people got it right, not those who believe there’s a technical fix to climate change. Take a fairly crude version of the Green New Deal, ‘if we just invest loads in renewable energy, we’ll solve this’, no you won’t. What I detect in the Green Party is something else; without being naive about it, there’s not that ingrained, existential approach to faction fighting that you get in Labour in which every row is death or glory.

George: The Greens have often been ambivalent or even hostile towards the concept of economic growth – the last manifesto barely mentions it. Isn’t that a problem for a progressive party?

James: I don’t think so, I don’t take the view that growth is bad and we should actively avoid it. I more take the view, and this is probably the default in the Greens, that growth is just a thing that happens. If you went out and actually invested a great deal of money in decarbonisation you would get economic growth.

But the harder bit is that I just don’t think we’re going to get very much growth in the future. There is potential for catch-up growth because we’ve done things so badly for such a long time. Investing more money in the north of England, for instance, is a good opportunity for that. But once you’ve caught up, once you’re somewhere near the frontier of what is possible, that frontier is not going to move as rapidly as it used to in the past.

George: On a wealth tax, what’s your response to critics such as Dan Neidle who argue this has never been successful anywhere it’s been tried? And that we should therefore focus on levies on property and capital gains.

James: Well the fact something hasn’t been done anywhere is not in itself an argument against it, you could have said the same before the National Health Service was created. And there are countries with wealth taxes: Switzerland has had one for about 200 years now, Norway has a wealth tax and has recently increased it, Spain has one. The specifics and the design is where the discussion gets more interesting: how would you make this work? What are you really going to tax and who is it going to hit? If you take Norway’s wealth tax, it’s actually quite broad, it captures a lot of people who are reasonably well-off [a 1 per cent tax on those with assets above £125,000) whereas the Green version is targeted right at the top end [1 per cent on assets above £10m].

The challenge, politically, is that this does not solve all your problems, you are looking at perhaps £10bn at the upper end, maybe more. The amount you want to spend on improving public services is going to be an order of magnitude greater than that.

George: Are the Greens right to stand a candidate in Makerfield against Andy Burnham?

James: In the end it’s up to the local party to decide, the Greens are decentralised to a fault. There’s a good case to be made either way. My own personal view, and this is really just a personal view, is that Andy Burnham is genuinely popular in a way that pretty much no other politician in Britain actually is. And there are good reasons for that, everyone saw what he was doing during Covid in particular, that gave him a national presence.

And he’s got a kind of secret weapon, which is the exact argument that Reform used to great effect during the local elections which was ‘vote Reform to get Starmer out’. He [Burnham] can now say, somewhat ironically, ‘vote Labour to get Starmer out’.

So what’s Reform’s argument going to be? They’re quite confused and spending a lot of time whinging about Restore – you don’t do that if you’re in a confident place. Whereas Labour, correctly, is not spending its time whinging about the Greens.

George: What do you think a Burnham premiership would mean for the Greens?

James: On an entirely personal basis, people who’ve worked with him say that he’s personally very likeable. I think there has been a genuine shift in how he thinks about the world, which has been quite a long time coming. You can see that in his campaign which has landed squarely in a lot of Corbyn-land themes.

He has two problems: first, this is backwards-looking, if you look at his campaign video, it’s all ‘we used to build stuff, wouldn’t it be good to have this again?’ And it would be, but that’s not dealing with the immediate cost-of-living crisis people face. Unless there’s some shift, it looks as if Andy Burnham is not going to live up to his rhetoric.

What would ‘Manchesterism’ as it has actually been delivered mean for the rest of the country? Well, a harsh version of this is, you build a lot of stuff that looks shiny and nice but places further out in Greater Manchester – like Oldham or Wigan, where I’m from – don’t see too much of it, which is why everyone’s voting Reform. You’ve got a problem if you’re just doing that nationally, so what’s his redistribution plan? Wes Streeting, at the moment, has a more obviously redistributive plan for the country because he’s going to equalise capital gains and income tax, what’s Andy Burnham’s equivalent?

Second, having a prime minister who is potentially the most left-wing prime minister since Harold Wilson is not a bad thing for the left. What are the plausible outcomes of the general election? Probably a Reform-Conservative coalition or a coalition of the left of some sort. If our version of the world is ‘death to Andy Burnham and all he stands for’ that won’t set us up very well to have the maximum political space by the time we get to 2029. Whether you go into coalition or not is a separate discussion, but you want to have the option and you want everyone who votes for you to know it’s an option.

The other bit that sometimes gets forgotten on the left is that people vote for parties they think are going to win and do something. If you look like you’re going to be in government, they’ll vote for you more often than if you look like a random protest.