The Chancellor Alistair Darling recently supported a package of proposals that will virtually put more cash into the City’s banking fat cats.
He lent his support to plans from the Bank of England to pump £50billion into the money markets to prevent the current credit crisis spiralling out of control and causing more damage to the ‘beleaguered’ banking sector. Under the scheme, banks will be able to ‘swap’ any major mortgage debts for government securities. The scheme will run for a period of one year, and may be renewed over a period of three years.
We shouldn’t be surprised about this. This is where ministers’ priorities truly lie. If the banks ask for more government cash, yeah, of course they can, no questions asked. But if ordinary working class people want to see the 10p starting tax rate restored, or at least have some compensation for the loss of that rate, no, no, no way, Jose.
The government is in trouble over its decision to abolish the 10p tax rate which will mean around five million households living on fixed incomes losing out (as I posted earlier). Under pressure from fellow MPs, a compensation package totalling up to £1billion is being put forward by panicky ministers in a bid to head off a damaging revolt. But the package won’t be enough for many people on low incomes who have seen their bills soar in real terms over the last few months. The government is paying the price for being completely dishonest with the public on taxation in general.