A Programme for Renewal

The 7 Policies

Seven concrete proposals, grounded in Real Resource Economics and drawn from The Money Sham.

1. 01

   New Economic Institutions

   Replace existing UK institutions with new bodies aligned with RRE principles. An Office for Inflation Analysis (OIA) replaces the Office for Budget Responsibility and monitors supply chains, labour shortages, monopoly pricing, and private debt growth. An Office for Responsible Taxation (ORT) simplifies the tax system, closes the tax gap, reduces avoidance, and assesses how taxes affect inflation and inequality. Taxes are not funding mechanisms but tools for sustaining the currency, reducing inequality, altering behaviour and controlling inflation.

2. 02

   Rebuild Financial Regulation

   The deregulated finance sector has produced asset inflation, ever-increasing inequality and economic stagnation. A new Office for Banking Regulation (OBR) will reintroduce credit guidance, restrict speculative lending, and direct bank credit toward productive investment. Banks will face major restrictions on derivatives, off-balance-sheet activity, speculative lending, and foreign currency lending. This will grow the real economy and reduce inequality.

3. 03

   Affordable Housing Through Credit Reform

   Excessive mortgage credit has driven house price inflation and transformed housing into a speculative asset. Proposed solutions include limiting buy-to-let borrowing, introducing land value taxes, discouraging land banking, and reducing the permitted ratio of mortgage loans relative to incomes and, of course, building more houses. This restores affordability and thereby raises living standards.

4. 04

   Stronger Competition Policy

   Capitalism is meant to encourage free markets, but what we have now is too much market power in too few hands. The government must strengthen the Competition and Markets Authority (CMA) to tackle monopoly power, price gouging, and excessive corporate concentration. Mergers and acquisitions are only permitted if they clearly increase productive capacity and serve the public purpose. This will promote growth and bear down on price rises.

5. 05

   Permanently Low Interest Rates

   Higher interest rates cannot control inflation and in the current era drive up prices, worsen inequality and economic fragility while rewarding the wealthy for doing nothing. Permanently low or zero rates combined with the bank regulation will bear down on inflation, and reduce interest payments on the national debt.

6. 06

   A Transition Job Guarantee

   With fiscal policy promoting full employment, the government provides a job with a living wage for anyone who wants it through a Job Guarantee programme. A buffer stock of employed people increases the velocity of circulation of money, causing higher real growth; it stabilises prices and promotes social cohesion. The current deliberate unemployed buffer stock causes inflation when the business cycle picks up, because employers seldom hire from the pool of unemployed labour, preferring to offer jobs to those already in work. This bids up their wages and leaves the majority of the unemployed out of work, which can cost the government up to £125,000 per person per year. A Job Guarantee saves money, as it costs far less. Roosevelt’s New Deal, Argentina in the early 2000s, and present-day Austria provide successful precedents.

7. 07

   Abandon Devaluation Phobia

   The UK should not tremble at the prospect of currency depreciation and should no longer allow bond markets and speculative financial flows to dictate domestic economic policy. The bond markets cannot create money: it comes from the government. Exchange-rate pass-through into UK inflation is relatively low; devaluation can improve competitiveness and stimulate domestic production. The bulk of foreign exchange trading is speculative rather than trade-related, and sovereign governments can and must stabilise bond markets. For over fifty years the UK ran a ‘Tap System’: bond yields were never a problem. Japan has shown a government can easily control bond yields if it so chooses. The UK should prioritise employment, productive investment, and productive capacity rather than defending financial orthodoxy or appeasing currency markets.

For full analysis of each policy, see The Money Sham.