The Bank of England has now announced the creation of a coronavirus quantitative easing programme. In broad terms I welcome this, but I am concerned that the money must be used to best effect, or there is no overall benefit.
In particular, I am concerned about the plan to increase the Bank of England's holdings of UK sterling non-financial investment-grade corporate bonds as part of this programme. At present just £10 billion of such bonds are held by the Bank of England but I have a suspicion that this might increase significantly this time. However, it is vital that the assets acquired have conditionality attached to them because there is no doubt that inclusion in this programme will be of benefit to the companies in question.
In that case what I suggest is that the Bank of England should only acquire the corporate bonds of a company that has committed to:
a) Keep all staff on during this crisis;
b) Pay a living wage;
c) Pull out of all tax havens;
d) Sign up to a comprehensive tax disclosure standard like the Fair Tax Mark;
e) Deliver country-by-country reporting for the benefit of all its stakeholders;
f) Commit to a comprehensive plan to become net zero-carbon;
g) Deliver comprehensive climate change reporting as part of its audited financial statements.
Then, and only then, do I think bonds should be acquired. Bond buying cannot be seen to be a revenue-neutral process. Values have to be upheld, even now.
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[…] there is an ongoing financial crisis as well. It would be wrong to do so, but what I have already noted elsewhere is that if any financial support is to be provided to larger companies (and there will, undoubtedly […]
I agree with all your points.
Then when this is all over, I’d love there to be an audit on all the company’s that received such help in order to see how many of them genuinely needed it. That is the risk if it is that open ended. Abuse.
I can live with the risk
Above all we need jobs
I’m entirely happy to have anti-abuse mechanisms built-in but I am of the left – and jobs come first
Although my discussions with 9thers on the supposed left today suggest anything else but that is their priority
The High Pay Centre echo many of your points and arguments: http://highpaycentre.org/files/conditions_are_critical_web_version.pdf?mc_cid=ff79c3a258&mc_eid=f387ed2070
Perhaps the more voices saying it can’t be “corporate welfare” yet again, while those who desperately need welfare are ignored, maybe it just might make a difference.
Interestingly the tabloid reading fore-lock tuggers have no idea where the money is coming from for this large QE programme to combat the recessionary effects of the pandemic. If they think at all it must be the government borrowing the money from the rich because government has no money of its own! This is the sorry state of the so-called democracy in the UK.
[…] there is an ongoing financial crisis as well. It would be wrong to do so, but what I have already noted elsewhere is that if any financial support is to be provided to larger companies (and there will, undoubtedly […]