Speaking after the Chancellor had announced details of the banking rescue package and the Prime Minister had confirmed that the Bank of England will cut interest rates by half a percentage point, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:
“The decisive action announced today through the banking rescue package should make a significant contribution towards the restoration of stability.
“The cut in interest rates was the very minimum the STUC was looking for at this stage. We strongly suspect that a full percentage point cut may be required next month as today’s action is unlikely to prevent the economy moving into recession.
“Today’s announcements mark the end of the unsustainable ‘financialised’ economic model. We urgently require a fundamental reappraisal of both the regulation of financial services and the place of financial services within the wider economy.
“Today’s events also highlight the fundamental role of government in a modern dynamic economy; a role that has been consistently decried by too many in the business community over a number of years.
“Indeed, one of the most repellent aspects of the unfolding crisis has been the interventions of senior Scottish business representatives castigating the government for a perceived slowness to act. The arrogance and hypocrisy is truly breathtaking. Having spent 3 decades cautioning against anything that smacks of intervention or regulation, they now complain that government has been to slow to act to save the banks from the consequences of their own recklessness.
“Government is complicit in the current crisis in so far as it created and sustained the lax regulatory regime that facilitated reckless behaviour. In doing so, it was simply acceding to the demands of business.” ENDS
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