Quantitative Easing currently benefits the non-bank financial sector, commercial banks and the Treasury
Under QE, Hansard evidence informs us, the Bank of England’s Asset Purchase Facility purchase of just under £375bn of government bonds from the non-bank financial sector has led to a lowering of long term interest rates. The non-bank financial sector and commercial banks now hold more liquid assets in the form of interest-bearing reserves.
The consequent reduction of borrowing costs for the government means that debt issued or re-financed since 2009 has been substantially cheaper, saving some £50bn in immediate funding costs.
But QE could be used directly for the common good: MP Caroline Lucas:
“There is huge, and as yet untapped, potential in renewable energy, energy and resource-use efficiency and the transformation of our transport system that would create high-quality jobs across the country and reduce the UK’s overall ecological impact.
“If we are serious about staying below 2C warming, as we have legal obligations to do, then to invest in a destructive Dash for Gas when there is a Green New Deal on the table borders on criminal negligence by my parliamentary colleagues.”
This is the National Plan advocated by the Green New Deal Group: Larry Elliott of the Guardian, Tony Juniper, formerly FOE’s director, Jeremy Leggett of Solarcentury, Richard Murphy – Tax Justice Network, Ann Pettifor of NEF and Debtonation, Charles Secrett, currently working with ELF, Triodos Bank and London’s Development Agency and Wildlife Trust, MP Caroline Lucas, Andrew Simms director of NEF, and the convenor Colin Hines, LWM co-founder and Co-Director of Finance for the Future.
Birmingham Energy Savers
Early beneficiaries of Birmingham Energy Savers’ (BES) activities gave testimony of the positive impact the innovative scheme is having on their lives at its official launch event at The Council House in February.
It was attended by local people helped out of long-term unemployment, residents that are now enjoying warmer homes plus lower energy bills joined representatives of Birmingham City Council, who originated the scheme, and its delivery partner Carillion Services.
If such schemes could be more widely implemented and adapted for use all over the country, welcome social, economic and environmental benefits would be offered to most people – but minimal ‘rich pickings’ for the few.
“Get the Bank of England to create new money instead. This new money would be granted to the government, who would spend it into the real economy where it can create jobs and support businesses”.