It’s true that they have enjoyed huge tax takes from the sector (though not anything like as huge as institutional profits would suggest) but they have also have basked in the reflected glory of the City of London, taken credit for its success, contributed to its growth through the encouragement of Public Private funding schemes, refused windfall taxation on banks, and have largely rejected proposals for taxation changes that might dissuade non-doms from making their dosh in London.
More importantly our governments have failed to sustain and develop alternative industry sectors (unlike most members of the EU and France in particular), they have allowed our skills base to deteriorate and they have sat on their hands while financial institutions grew fat on the strength of bogus liquidity and the over-extension of institutional and personal credit.
And now? What is the role of government in a recession?
- to engineer a recovery through reduced interest rates? Sorry Madam, but Mr Brown removed Government’s hand from that lever 10 years ago
- to restructure housing debt and its guarantees? A tiny bit of this has been offered in the wake of Northern Cock but now we see what’s happened to Fannie Mae and Freddie Mac there won’t be much enthusiasm for more of that I suspect.
And what does that leave? Yes, thank you that man in the flat hat at the back of the hall, all we’re left with is reductions in taxation. We’ll see.
2 comments:
Er, I'll get on to this when I get back from holiday
Frankly, I'd be happier if they stood clear and let the market & economy sort themselves out.
However, there's an awful lot to go at in terms of getting better value from the hundreds of billions of public expenditure each year. Maybe Governments should think about focusing on this for a while.
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