7 Oct 2011

Government's policy is still to help bankers

View across to Archway from Bread Street
Mervyn King says this may be worse than the Great Depression (see here). UK financial firms have been downgraded by Moody's rating agency (including Lloyds TSB, RBS, Nationwide and Santander UK) (see here). While the Bank of England is to inject a further £75bn into the economy through quantitative easing. Dear oh dear it really is getting bad and very hard to see how things can get better....

Green MP Caroline Lucas (Brighton Pavilion) commented: "While it's clear that quantitative easing is one of the only options left to get our ailing economy off its knees, the Bank of England's decision to usher in £75bn worth of unregulated QE is problematic. Unless we impose constraints on private banks to ensure the money reaches the real economy, we're effectively throwing money into a banking black hole - a recipe for systemic economic failure and further social inequality. What we need is properly regulated quantitative easing directed towards actually creating jobs, increasing lending to small businesses and facilitating the move towards a green economy. A job creation strategy like the Green New Deal, for example, would ultimately pay for itself by generating incomes and boosting emerging green industries. As the average annual energy bill reaches a shocking new high of around £1,000 per household, surely now is the time to consider a green quantitative easing programme to help fund energy efficiency solutions such as home insulation to help keep people's bills down, and create hundreds of thousands of jobs in the process."

Richard Murphy from Tax Research UK has also blogged on this - see here - he concludes: "But I’m afraid to say that this time QE looks like it is a policy made by bankers for the benefit of bankers. And that is the last thing we need right now."

As another Green colleague argues: "At present, huge sums (up to £120 billion per year) are haemorrhaging out of the national economy into tax avoidance and tax havens. It this were recouped, the national economy would be better off to the tune of 120billion a year. Taxes for ordinary people could be cut by this sum, minus the amount needed to reduce the deficit. This action does need to be global, through the G20 &c, to avoid capital flight. Price rises by corporations would be subject to competition, so greedier businesses would lose out. There might be some price inflation, but it would be offset by lower general taxation. So tax the rich still stands."

Indeed  today is End Tax Haven Secrecy Day of Action - see more at:

Depressing stuff but as a tonic have a look at this YouTube about a Scottish community's renewable energy film:

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