|Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop, said today (7th October 2011) that the moves by Chancellor George Osborne to pump more cash into the economy by pushing in £75 billion of new cash will almost certainly not benefit small businesses on Teesside ‘by one iota’.
Tom said “It is becoming clearer by the day that this cash tends to be hoarded by the banks, and only released by borrowing grudgingly at best, and by keeping the tills firmly locked at worst.”
“This tendency will now intensify, given that only this morning one of the World’s largest credit agencies, Moody’s, has downgraded the credit ratings of major banks in the UK including the Royal Bank of Scotland, Santander and the Nationwide Building Society. This will terrify the banks who fear losing customers, and one net effect will be to squeeze borrowing even more so as to keep their cash balances at a high level.”
“Given that the coalition’s deflation policy have driven demand and growth out of the economy, this, together with the news on bank ratings, will only increase the trend for banks to again start speculating on the markets. This helps no one at all.”
“Osborne and Cameron are 96% short of their own growth target of 3%. On average since the Tory-LibDem Government came to power, growth has been 0.1%, before the euro zone crisis. They strangled the fragile recovery, and by printing £75BN for the banks now the government is admitting their deficit plan has been an abject failure. As George Osborne said on the 09.01.09: “quantitative easing is the last resort of desperate governments when all other policies have failed””.
“The Bank of England’s estimates from the last round of Quantitative easing showed a minimum estimated inflationary effect of 1.5%, which will hurt peoples household budgets even further. There is only one way to get Britain moving – and that is to launch a programme of public works, infrastructure investment and house building. That, not pandering to the banks, will revive the economy, helping small businesses in areas like Teesside and put people back to work.”
“Not to do this will mean that this Tory-LibDem Government has taken us into a double dip recession.”
“Printing new money does not mean Teesside small business will benefit”
Category: Archived press releases /