{"id":32061,"date":"2016-01-22T10:43:17","date_gmt":"2016-01-22T10:43:17","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=32061"},"modified":"2016-01-22T11:06:28","modified_gmt":"2016-01-22T11:06:28","slug":"bank-of-england-should-use-the-10-billion-windfall-to-kick-start-jobs-in-every-constituency","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2016\/01\/22\/bank-of-england-should-use-the-10-billion-windfall-to-kick-start-jobs-in-every-constituency\/","title":{"rendered":"Bank of England should use the \u00c2\u00a310 billion windfall to kick-start \u00e2\u20ac\u02dcjobs in every constituency\u00e2\u20ac\u2122"},"content":{"rendered":"

The following press release has been issued by the Green New Deal group this morning:<\/em><\/p>\n

Bank of England should use the \u00a310 billion windfall <\/strong><\/p>\n

to kick-start \u2018jobs in every constituency\u2019, <\/strong><\/p>\n

say Green New Deal Group<\/strong><\/p>\n

The global economy is reeling and the Chancellor\u2019s dreams of \u2018rebalancing the economy\u2019 with a \u2018march of the makers\u2019 selling to a booming China lies in tatters. In response Professor Richard Murphy, widely credited as the author of \u2018Corbynomics\u2019, and the Green MP Caroline Lucas have called upon George Osborne to urge the Bank of England to use the \u00a310billion quantitative easing windfall it has received from the Treasury this week to kickstart a \u2018jobs in every constituency\u2019 programme to help counter the adverse economic effects of global economic instability.<\/p>\n

New research by Professor Richard Murphy shows that the Bank of England will this year receive at least \u00a320.1 billion as some of\u00a0\u00a3375 billion QE fund is repaid\u00a0as the gilts in which it is invested reach their final redemptions dates.<\/p>\n

This means that the Treasury will pay the Bank of England \u00a320.1 billion during 2016 \u00a0and, because the Bank of England has decided to keep the UK quantitative easing total at \u00a3375 billion, the Bank will then have to\u00a0reinvest this sum in further gilts (or government bonds) that it will buy from banks, insurance companies, pension funds and others. This reinvestment will happen in two broadly equal tranches, one this week and another in September. This will happen despite the fact that it is now widely thought that this type of quantitative easing has helped wealth flow into the hands of those already well off and that it has, as a result, helped create the financial bubbles that are now bursting all around the world.<\/p>\n

Professor Murphy and Caroline Lucas MP are suggested that this sum should be used to buy bonds issued by a new National Investment Bank (or the existing Green Investment Bank, or both, depending on the intended use of funding) which will be tasked with creating national infrastructure and a sustainable energy future for the UK. This would\u00a0reduce the threat of climate change\u00a0and in\u00a0the short term\u00a0would\u00a0create new jobs, support demand\u00a0and inject funds into the local economy of every constituency in the UK.<\/p>\n

Caroline Lucas MP stated \u2018the Bank of England\u2019s calculations have shown that the \u00a3375 billion of QE released into the economy between 2009 and 2012 did little to support the general economy. \u00a0What it did do was boost\u00a0the value of shares and bonds\u00a0by \u00a3600bn,with\u00a040% of the gains going to the richest 5% of households. The Bank of England now has an opportunity to use QE much more positively by investing the \u00a310 billion windfall it has received from the Treasury in\u00a0green energy and retro-fitting of existing buildings,\u00a0generating secure jobs be in every constituency, reducing people's fuel bills and getting climate emissions down too\".<\/p>\n

Professor Murphy asserted that \u201ca recessionary environment is once again sweeping the UK. This time we have to tackle it head on. Green or People\u2019s QE could do that. The programme could be kick started this week by putting\u00a0the\u00a0\u00a310 billion\u00a0redeemed from the\u00a0QE\u00a0programme\u00a0by the\u00a0Bank of\u00a0England\u00a0on 22\u00a0January\u00a0into new real investment instead of buying government bonds in the open market. That\u2019s what a brave Chancellor should propose. It is what a brave opposition should suggest. This is not the time to wait. This is the time to start saving the UK economy. Over to you George Osborne and John McDonnell\u2019.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

The following press release has been issued by the Green New Deal group this morning: Bank of England should use the \u00a310 billion windfall to
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