People being rewarded for recklessness — MP

MICHAEL MEACHER . . . wants more conditions attached to bailout

AN Oldham MP is demanding reassurance from Government the multi-billion pound bailout for high-street banks to halt the financial crisis will see money start to move around the economy.

Oldham West and Royton MP Michael Meacher said the Government was right to take action and try and secure financial stability — but said more conditions needed to be attached.

He said: “It has been given without any conditions it appears. The sum of money is phenomenal. We all hope it will work and sort things out but there is nothing to make sure the banks do what is expected of them.

“It is the banks that have taken reckless risks dealing in toxic derivatives and they are now being rewarded with vast sums of money. We are rewarding people for recklessness.

“The government will have to borrow this money, they will not raise taxes at such a time, the cost is enormous. Where then will money come from for other needed improvements. Lots of questions need to be answered.”

Speaking to Chancellor Alistair Darling, Mr Meacher asked for reassurance money will start to flow freely again to businesses, mortgages and employment.

Mr Darling said the Oldham MP was right, saying further steps were needed to ensure the economy and jobs were protected, and he would return to the issue in the pre-Budget report.

On Wednesday, the Government announced the unprecedented £500 billion bailout package, which was quickly followed by a surprise half-point cut in interest rates — but it failed to halt the London stock market slump.

Gordon Brown said Britain now “led the world” by buying stakes in banks to keep them afloat, rebuild their balance sheets and kick-start the frozen interbank lending markets at the heart of the crisis.