There was little in the Queen's speech that would impact on the economic crisis - indeed, with the Conservatives pandering to UKIP by proposing further curbs on immigration, what little there was might well have an adverse impact on jobs and growth. You might counter that "you can't legislate for growth" - that the Queen's speech is no place to announce measures to revitalise the economy. Yes legislation can be a blunt tool to tackle an economic crisis with, and that by and large what's needed is a smarter, less short-term use of the laws that already exists rather than drafting new ones. It is probably also true that many of the measures in Labour's "alternative Queen's speech" would be ineffective at achieving their own aims, let alone in creating a fair, sustainable economy (more on which in future posts, but for a start borrowing to cut VAT isn't just politically challenging, it didn't work last time). Away from the pageantry of Parliament, however, a story is emerging that might have a huge impact on the UK economy, and the signs aren't good. The apparent rush to sell off the state's stake in RBS would be a huge mistake, and not only because the taxpayer is currently facing losses of tens of billions of pounds. Selling RBS off in its current configuration as a massive single entity means missing out on an excellent opportunity to radically restructure British banking, something that is central to any efforts at economic revival. Having taken such a large share of RBS into public hands, the government has a chance to restructure it in several ways to improve the banking landscape and boost the economy - all of which would be overlooked in a premature share sell-off. We could split RBS into a good bank and a bad bank. We could break it up into smaller entities, encouraging competition. We could break it up into regional banks, giving UK banking a much-needed decentralised structure. We could even give away a portion of the shares directly to people once the price rises enough (PDF), as a way to boost consumer spending. In fact, we could do just about anything other than sell off the bank in its current dysfunctional form. Not only are variations on the above a central part of the Social Liberal Forum's economic reforms, they are being advocated by Very Serious People like Mervyn King, Vince Cable and others. Which ought to mean the government will listen, and resist the short-termist temptation to privatise the bank as soon as humanly possible. I won't hold my breath.
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