Rachel Reeves should levy a new bank tax and urge the Bank of England to halt bond sales to reduce the government’s £22bn-a-year losses from quantitative easing, the IPPR thinktank has argued.
In a report called Fixing the Leak, the IPPR’s associate director for economic policy, Carsten Jung, says the Treasury should rein in the costs of QE as public finances are tight.
“What started as a programme to boost the economy is now a massive drain on taxpayer money,” he said. “Public money is flowing straight into commercial banks’ coffers because of a flawed policy design. While families struggle with rising costs, the government is … [in effect] writing multibillion-pound cheques to bank shareholders.”
The emergency policy, first enacted in 2009 during the global financial crisis, involved buying up £895bn of bonds from the UK’s banks and, in exchange, crediting them…
