Banks won’t pass on rate cuts? Hang on, we own a bank…

Our Darling Chancellor – ahem – has been calling on banks to pass on cuts in the base rate of interest to customers:

He said it was time lenders “played their part” after being helped by the Bank of England putting £15bn into the markets, amid the credit crisis.

So they’ve given the banks a carrot, but where’s the stick?

If Darling had any interest in helping ordinary people instead of sucking up to the banks he’d be threatening to use Northern Rock – a bank we’ve all been forced to bail-out – to supply mortgages direct from the Bank of England.

And he would have scrapped that tax hike on low-paid workers. Something the labour movement has been sounding off about this weeked.

TUC general secretary Brendan Barber said the abolition of the 10p band had come as a “further blow” to workers whose finances were already being squeezed by rising food, energy and borrowing costs.

He suggested the government end the remaining tax breaks for so-called “non-domicile” UK residents to raise the necessary funds to compensate those who have lost out.

These are people who live in the UK but are classed as living abroad for tax purposes – a practice Mr Barber described as “scam”.

Addressing the North West TUC in Liverpool, he said: “When it is so clear that the growing numbers of super-rich are not paying their fair share of tax, it is not surprising that average and low-earners resent any increase in their tax bills.

“The danger for progressive politics is that this leads people to question the fairness of our tax system, which in the longer term risks undermining the pensions, benefits and decent public services that depend on fair taxes.”

That is to say, we need a working class tax cut and a corporate tax hike. Brown and Darling have given the UK the lowest rate of corporation tax of all the imperial powers – so much for the non-existence of the “race to the bottom”…

Note that in the above quote Barber talks about progressive politics but not explicitly in the context of the Labour party. I do wonder if the labour bureaucracy will, in the next few months, use the question of party funding to bargain with New Labour and avoid strike action?


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