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Force the (Voter owned) Banks to pay a higher rate of interest to Local Authorities

1 Comment 2nd July 2010

Where the Government has previously "baled out" a major Bank/Building Society and as such it is classified as being Publicly owned Dr. Cable should look at enforcing a regime where each of those organisations had to pay a higher rate of interest to Local Authorities who have money on Deposit.  (possibly 2% over base rate on 90 days with a guarantee of low risk investment).

Why does this matter?

This would create an environment where LA's would be more capable of funding important developments without having to resort to hikes in Council Tax, would enable the investmentin Schools (both new and old) and would allow for the continuation of some of the BSF projects.

The knock-on effect would be a reduction in unemployment, fewer reasons to raise Council Tax rates and a greater feeling of ownership and benefit for the Billions wasted on baling out the Banks, etc., in the first place.

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One Response to Force the (Voter owned) Banks to pay a higher rate of interest to Local Authorities

  1. Roger Earp says:

    Bad idea – government should not interfere in how banks, or any other business, operates, even Alistair Darling knew that. It is the responsibilty of government to create an environment in which business and enterprise can thrive. Labour did exactly the opposite and wrecked our financial services industry.
    Also, the government is already making exorbitant profits from the bank bale outs by charging 14% interest on loans, buying shares at knock down prices to sell for profit later and charging exorbitant rates for bad debt insurance. All of which is leaching money away from bakns and therefore their customers, shareholders and employees. But will we taxpayers see any benfits? – do not hold you breath.

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