Politics Home reports: “Liberal Democrat Shadow Chancellor, Vince Cable has today written to George Osborne attacking him for encouraging the Government to write blank cheques for the banks at the expense of the taxpayers.”
Here’s an extract of Vince’s letter:
I am pleased to see from your other pronouncements that you have now adopted the proposal which I and the Liberal Democrats have been promoting for a couple of years for bank capital requirements to be managed counter cyclically to reduce the risk of booms of irresponsible lending followed by busts of the kind we are now experiencing. While we agree on that point we must not let the Government off the hook by offering blank cheques to the banks at taxpayers’ expense.
The full text can be read here.
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3 Comments
Its an excellent letter and worth quoting at greater length. Vince really is a star and so clever he makes other clever people look like Pop Idol entrants.
Yes, its a great letter.
The party has got to do more to point up where the Tories are on economics – i.e. nowhere…
The whole Northern Rock fiasco and now their response to the credit crunch illustrates that they have little real understanding of the issues and would actually make matters worse. They just jump on band wagons.
Whilst Darling / Brown might rate B-, Osborne / Cameron would barely rate D for their answers… God (or whatever source of external guidance you subscribe to) help us if they ever get into office.
Where is the debate in the House on this issue? Or even on this site?
The risk to pensions, already threatened and often significantly invested in gilts (and likely to be undermined by this action of NuLabour) has not been mentioned. Nor has the iniquity of bailing out the wealthiest risktakers (bankers) whilst doubling the tax rate of the poorest in our society made (m)any headlines. £50-100bn v £7bn – does Darling think he can afford to risk the higher amount…
Until such time as house prices are included in either of the inflation price indices (RPI or CPI) or subject to LVT then the treatment of our homes as investment vehicles will continue to distort the economy.
And Vince is right – if the government does proceed with this ill-thought through action then there must be a significant discount involved. Otherwise this Darling gamble would be classified as ‘state aid’ and thus illegal under EU law.
This scenario appears to be indemnifying the financial community against future irresponsible lending behaviour – what happened to the idea of leaving this to market forces? Or doesn’t this philosophy apply to this particular market sector?
The bankers must be laughing… all the way to the bank…