Class, settle down. Gorge Osborne, stop kicking Liam under the table. Would the Treasury Civil Servants at the back please stop talking among themselves and LISTEN.
Today we are going to do Investment.
Investment, according to the Economist's dictionary, means:
Putting MONEY to work, in the hope of making even more money.
Let us take an example. The UK is running out of oil, we are importing gas, and Thatcher shut down our coal mines. We have got in any case to stop using carbon based energy because it is wrecking the planet.
This means that we must invest, first in things that mean that we have to use less carbon energy, and second, in renewable energy technologies including the pan-European HVDC grid.
All clear so far? Stop fidgeting, George, and pay attention.
So money provided to create work in insulating houses and businesses up and down the country will save more money in the future because we will not have to import so much energy in the future.
The money paid to the low-skilled workers who insulate houses will save money that would be paid in unemployment benefits, and the extra money that they earn will be spent into the local economy, keeping the local community in a more healthy state, raising popular morale generally.
Yes George? You say there is no money. Quite. So what do we do if we have no money? We first try to borrow some from the bank. But right now, the banks are feeling very sorry for themselves and are not lending any money to anyone. So we have to go to the same place the banks go when they have no money, to the Bank of England. The BoE, as we call it, can create necessary money in exactly the same way that banks create money. That is, by creating two values that balance each other out - an asset and a liability.
The asset is the positive side: the promise that energy will be saved, jobs created, and the economy stimulated. The liability is that people might just run off with the money and not insulate any houses. The liability is protected by checking up that the work gets done. Got it? Good.
For your homework, I want you all to find out how many jobs will be created, at what financial costs, and how much energy will be saved as a result, together with the financial value of the energy saved, taking into account the rising price of carbon energy as resources dry up, and internalising its ecological costs.
You're the bloody economists, after all, this is your job. I'm just an ill-paid primary school teacher. Now, off to PE. Liam, I saw that. See me afterwards.