Labour could find the money it wants without raising taxes. This is austerity by amnesia | Randeep Ramesh

R.Summer “Reconstruction, reconstruction, reconstruction“A campaign by the government seems to be a political program less than a promising renewal, and instead, Kiir Starmer directs the ghosts of governments in the past. As Karl Marx said, people make history but not in conditions of their choice; they are chasing this by dead ideas, and wearing their clothes in the future. George Osborne Sincerity for financial integrity.

But we no longer live in the world, as these policies have been designed.

The global system that preserved the British model after 1979 is a cracking. International Trade It reached its climax in 2008. The promise of non -welded globalization has faded – with friction -free financing and FootLOOSE production. Donald Trump’s rise represents the final contradiction of new liberalism: the moment it turns her gossip. The United States also embraces a form of forms Economic nationalism, Britain – which depends on capital flows, faces asset and open market bubbles – faces a historical account. It needs a new economic settlement. It needs imagination. But Starmer and Chancellor Rachel Reeves are still stuck in a model that has passed.

Take Reefs financial position. Despite the promises of transformation, Administration budgets You will grow more than under the last parliament. This is not just wisdom. It is a wrong scarcity-designed not by inflation or invested panic, but through the treasury frame that treats the restrictions that it imposed self as natural laws.

An example of this? The silent chaos made by the tightening of the quantitative (QT). While the G7 Central Banks Be carefulThe Bank of England began the most aggressive QT program in the developed world. To understand what is going on, you have to return to 2010. When the economy crashed, England has created money from air to buy government debts. This was called quantitative mitigation (QE) – The idea was to pump money into the financial system to maintain the operation of the city. It has succeeded, but it also means that the bank has ended up having a huge pile of government bonds.

Now, the bank does the opposite: QT. This means that the bank sells these bonds or allows them to mature without replacing them. The goal is to reduce its public budget for “retreat” QE. The problem? It is a more dramatic way of any other main central bank.

Why is this important? Because when these bonds were first purchased, they were expensive. Now it is sold for a lower – so the bank loses. The problem is that the Ministry of Treasury (i.e. the state) promised to cover these losses. Moreover, since QE has created a lot of banking reserves (the money kept by commercial banks at the Bank of England), the bank is now paying billions of interest on those commercial banks themselves – at much higher prices.

This means that the QT believes that the Treasury Ministry receives public funds to cover the losses of bonds and increase the profits of commercial banks. It is a quiet and worrying transfer of wealth to the financial sector. The cost of the treasury? on 40 billion pounds in the year Funds that can pay for social care repair or abandon the maximum child.

This is not a marginal technique. They are central political options. REEVES chose the Orthodox support – locking in cash shrinkage while linking itself with the financial rules that deal with these donations to the financial sector as sacred, but it denies money to local councils and legal assistance. The result: a contradictory condition that invests and discounts – spends on nuclear reactors and tram lines, but it will not provide the money required to operate them in the future.

This is not rebuilding. It is the automatic bomb. Worse, the justification is not convincing. He asked by the former financier and liberal Democrat Chris Coglan Why does the bank not only give up QT, and its ruler Andrew Billy replied that it keeps the markets “effective.” Efficiency for whom? Certainly, the disabled person does not depend on the benefits, or the principal of the non -funded school or the confidence of the hospital that closes services. The British state is not a break. It is deliberately starving, not by the financial markets, but by its managers.

QT criticism is a long way to restore the state’s ability to improve services honestly, retract some friendly setbacks and neglect the austerity era. A first step will take place towards coherent fiscal policy and the sincere political economy. Nigel Faraj denies as a friend of the voter Kidnapping – But this should not deter the Labor Party to do what is true.

Instead of intervention, Reeves prefers the necessary sacrifice text, which has no money to transfer the general world but apparently unlimited space to transfer interest to the banking sector.

The deeper paradox is that this respect for the bank – and the belief that QT cannot be prejudiced – is a new work inheritance. The original sin was given the Bank of England operating independence in 1997. Brown Sacrifice to control politics On interest rates, the city has reassured that the monetary policy of the new employment will be governed by non -accountable experts rather than political whims.

But before the new work turns the independence of the central bank into a sacred order, the conservative party adviser Ken Clark, Something is a socialist fire, regularly canceled the Bank of England on interest rates. The cash estimated authority was not always a heresy; It was governance.

However, this isolation was always imagination. The cabinet still compensates for bank losses. The government can stop QT, reformulate the payment interest payments, or complete the compensation. Other countries do. With the majority of the leader, the ministers can easily impose such a change. The Bank of England may be independently independently, but the ministers can control it “Extremist economic conditions”. if 150 billion pounds from the Treasury spending To cover the central bank losses unnecessarily, do not qualify, what does it do?

But in Britain in Starmer, politics remains besieged in fashion drama in the late 1990s – where credibility meant that it looks like the bond market, and success means keeping the hands of the individual outside the wheel. And so we get away. exhaustion It cannot fund the transformation it promises, because it refuses to rewrite the rules that make the transformation impossible.

This is austerity by memory loss. The government was elected to change Britain instead of text programs from retreat. It is said that Reeves is looking forward to Tax banks. This is not a bad idea, but it avoids much larger prize: reforming policies that convert billions of dollars to its treasures in the first place. Thus, fate is repeated Philip SnowdenThe First Labor Party adviser, who in the 1930s insisted that there was no alternative to discounts. This path led to economic recession and the proximity of destruction. You may do it again.