Keir Starmer posed ‘stupid idea’ in speech says political insider
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Sir Keir Starmer has been ridiculed after the Labour leader outlined his plans for a British Recovery Bond. Under the plan, a Labour Government would offer people a savings account with the Government at a competitive interest rate with the aim of giving capital investment boost to struggling areas of the economy. However, the strategy has come under fire from political expert John Rentoul who has slammed the idea as “stupid” in a rant in which he described the Labour Party leader’s revamp policy speech as “dreadful.”
Mr Rentoul told talkRADIO: “I think it was a dreadful speech and I got myself in a lot of trouble with Labour supporters for slagging it off.
“The centrepiece economic policy proposed in it, British recovery bond is just a stupid idea.
“I can’t see what the point of that is and nor can any of my economic minded expert colleagues.
“I thought it was a very very thin speech.”
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The plan was to raise billions of pounds directly from the public via a new government-backed investment product that could draw on the surplus savings from the pandemic, he explained.
This money would then be given to a state-controlled National Infrastructure Bank (NIB), in order to invest it in growing business and the jobs of the future.
Sir Keir has suggested such a scheme would offer financial security for millions of people, many of whom have saved for the first time.
Julian Jessop, the former Chief Economist at the Institute of Economic Affairs, wrote on his website: “It’s a nice idea on paper and many other people, from both left and right, have backed similar schemes.
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“But it’s still hard to see what it would actually achieve in practice.”
Mr Jessop commented: “So, what’s not to like?
“For a start, it’s not obvious what the problem is that this proposal is trying to solve.”
Despite the British Recovery Bond being touted as something which Labour would introduce as soon as possible, the Government was already finding it easy to borrow huge amounts of money at ultra-low interest rates by selling ordinary bonds known as gilts, Mr Jessop explained.
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He added: “Even without the help of the Bank of England, there’s no shortage of private savings looking for a safe investment (and there will be for at least as long as the economy remains weak).
“It’s also odd to pitch the British Recovery Bond as a boon for savers.
“There are already plenty of government-guaranteed savings products that provide ‘financial security’, including conventional National Savings (NS&I), and plenty of ways to invest in UK businesses using private vehicles.”
In addition, the Financial Services Compensation Scheme (FSCS) already provided a degree of protection for these investments too, he pointed out.
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