The Guardian has reported that:
David Cameron will tear a leaf out of Labour's playbook by announcing that he will use the £227m fine imposed on Deutsche Bank for rigging the Libor rate into a new three-year fund to create 50,000 new apprenticeships.
It added:
The new scheme will be specifically targeted at 22-24-year-olds who have been unemployed for more than six months, and anyone jobless that refuses the apprenticeship offer will be required to do community work.
Three thoughts result from that.
The first is that we're living in a very sorry society when funding for training opportunities is apparently dependent upon wrong doing by banks. It's a depraved logic that sees any merit in this, or thinks it appropriate. If such schemes are needed it is society's duty to fund them and not suggest they are dependent, as this scheme does, on some windfall gain.
Second, with it being suggested that some £14 billion of additional fines might be paid by UK banks over the next few years by some analysts I would hope that something more systemic on both this funding and preventing its recurrence is going on at present. It would appear that a reliable source of funding for a capital project is available instead of opportunistic allocation of this sort even if a majority of those fines will be paid to US regulators.
Third, I note the penal nature of the offer being made to those unemployed. The bank's punishment, where no one will pay a personal price for what has happened, is to be transferred onto the young unemployed where a personal price will be imposed. The irony is hard to ignore.
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Agreed. Likewise, spending the ‘banker bonus tax’ many times over on ongoing projects is just as short-sighted and dishonest!
The whole claim that any tax is hypothecated in such ways is the dishonesty
So, a jobs market is being created out of fines for bad behaviour by the banks?
This sort of mutant capitalism is just a step too far and further proof that our current politicians do not believe in producing money to solve problems.
So now, the banks can justify their bad behaviour as ‘socially useful’. Incredible
As far as moral compasses go, market thinking is now in the equivalent of the Bermuda triangle. Markets are lost.
When this sort of thing happens we are closer to the end. Those of us who know better had better shout louder than ever.
There is a twisted logic to this as the PPI fines showed that it was one of the only ways left to create any from of economic recovery (http://www.telegraph.co.uk/finance/economics/10250122/PPI-compensation-spurs-economy-through-spending-boost.html)
This is now a full admission that we are largely reliant on crumbs from a corrupt table-thus reducing us all (99% of us) to beggary.
– Simon I agree with your last sentiment completely.
I have some doubts about the wisdom of hypothecating taxes – there are arguments for it – but hypothecating fines is always a bad idea. You create an economic niche for people benefiting from crime at one remove.
A quick look at the USA, and how the municipal district of Ferguson is funded, might offer some perspective.
Meanwhile, honest and well-run banks (and other businesses) would benefit society far more; and the payment of their taxes – and the elimination of the evasion facilitated by the banks – would fund these worthy projects many times over.
Agreed, entirely
Hypothecation is a bad idea