The £24 Billion Question
The profits of the big UK banks could fund many of the government's key social priorities, and still leave plenty left over for shareholders.
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The £24 Billion Question
The profits of the big UK banks could fund many of the government's key social priorities, and still leave plenty left over for shareholders.
CLICK HERE
The £24 Billion Question
The profits of the big UK banks could fund many of the government's key social priorities, and still leave plenty left over for shareholders.
FIND OUT MORE
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How come banks make such vast profits?
Banks are uniquely privileged because the government allows them to create “new” money (money they don’t have) and then earn interest on it. With those sorts of advantages, it’s hard not to succeed.
But that doesn’t mean the government can just take their profits away?
Governments could tax banks much more, or it could just stop them creating new money, and create that new money itself to spend on social priorities. That would transfer wealth from the bank shareholders to the public good.
OK, but what about pensions? Aren’t those profits contributing to our pension funds?
Yes, but only a tiny bit. Less than 2% of quoted UK company shares are owned by pension funds. And nearly 60% are owned by foreign investors, so a lot of those profits are going overseas.
£24 billion doesn’t seem a lot in terms of the whole of government spending. How come it can do so much?
It’s true the government spends more like £1,000 billion every year, but most of that is spoken for through routine commitments. The amount a government can add to or cut from its spending is relatively small. But this smallish sum has a huge social impact.
How come banks make such vast profits?
Banks are uniquely privileged because the government allows them to create “new” money (money they don’t have) and then earn interest on it. With those sorts of advantages, it’s hard not to succeed.
But that doesn’t mean the government can just take their profits away?
Governments could tax banks much more, or it could just stop them creating new money, and create that new money itself to spend on social priorities. That would transfer wealth from the bank shareholders to the public good.
OK, but what about pensions? Aren’t those profits contributing to our pension funds?
Yes, but only a tiny bit. Less than 2% of quoted UK company shares are owned by pension funds. And nearly 60% are owned by foreign investors, so a lot of those profits are going overseas.
£24 billion doesn’t seem a lot in terms of the whole of government spending. How come it can do so much?
It’s true the government spends more like £1,000 billion every year, but most of that is spoken for through routine commitments. The amount a government can add to or cut from its spending is relatively small. But this smallish sum has a huge social impact.
How come banks make such vast profits?
Banks are uniquely privileged because the government allows them to create “new” money (money they don’t have) and then earn interest on it. With those sorts of advantages, it’s hard not to succeed.
But that doesn’t mean the government can just take their profits away?
Governments could tax banks much more, or it could just stop them creating new money, and create that new money itself to spend on social priorities. That would transfer wealth from the bank shareholders to the public good.
OK, but what about pensions? Aren’t those profits contributing to our pension funds?
Yes, but only a tiny bit. Less than 2% of quoted UK company shares are owned by pension funds. And nearly 60% are owned by foreign investors, so a lot of those profits are going overseas.
£24 billion doesn’t seem a lot in terms of the whole of government spending. How come it can do so much?
It’s true the government spends more like £1,000 billion every year, but most of that is spoken for through routine commitments. The amount a government can add to or cut from its spending is relatively small. But this smallish sum has a huge social impact.