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| Quantitative easing is 'expensive experiment' MPs say | Quantitative easing is 'expensive experiment' MPs say |
| (about 7 hours later) | |
| Government attempts to stimulate the economy have been criticised as "expensive experiments" by an influential group of MPs. | Government attempts to stimulate the economy have been criticised as "expensive experiments" by an influential group of MPs. |
| The Public Accounts Committee said the Treasury could not say what the effect of the Bank of England's quantitative easing programme had been. | The Public Accounts Committee said the Treasury could not say what the effect of the Bank of England's quantitative easing programme had been. |
| A flagship lending scheme had also "failed" the MPs said. | A flagship lending scheme had also "failed" the MPs said. |
| But the department insisted it was focused on ensuring "Britain succeeds in the global race". | But the department insisted it was focused on ensuring "Britain succeeds in the global race". |
| The cross-party committee delivered its verdict after examining the department's annual report and accounts for 2011-12. | The cross-party committee delivered its verdict after examining the department's annual report and accounts for 2011-12. |
| It comes ahead of the Budget, which will take place on 20 March. | It comes ahead of the Budget, which will take place on 20 March. |
| 'Poor decision making' | 'Poor decision making' |
| The committee said the Treasury had "limited understanding" of its role in the Bank of England's quantitative easing programme and expressed concerns that it was not aware of its risks and benefits. | |
| The committee's chairman, Labour MP Margaret Hodge, said: "Some £375bn has so far been injected into the economy as an 'experiment' but the department could not explain to us what the effect has been on the whole economy or on different parts of society." | |
| She added: "The Treasury's attempts to stimulate economic growth through new lending have, so far, not been successful. The National Loans Guarantee Scheme achieved just 15% of its intended take-up. | |
| "These measures are characterised by a lack of goals and intended outcomes, with no means of monitoring progress. Throughout, the Treasury seems to be embarking on a series of expensive experiments, indemnified with taxpayers' money." | |
| MPs also rebuked the department for not getting a grip on spending across Whitehall, and "impenetrable" book-keeping. | MPs also rebuked the department for not getting a grip on spending across Whitehall, and "impenetrable" book-keeping. |
| "The Treasury acts as both the finance ministry and economic ministry," said Mrs Hodge. "But it appears to neglect its role as finance ministry. | "The Treasury acts as both the finance ministry and economic ministry," said Mrs Hodge. "But it appears to neglect its role as finance ministry. |
| "Its own accounts are impenetrable and this committee keeps seeing instances of poor decision making by departments, which the Treasury could and should have prevented." | "Its own accounts are impenetrable and this committee keeps seeing instances of poor decision making by departments, which the Treasury could and should have prevented." |
| Deficit reduction | Deficit reduction |
| However, the committee did acknowledge that the Treasury had managed to cut the public purse's exposure to bank guarantee schemes in the wake of the credit crunch, and was doing better at holding on to key staff. | However, the committee did acknowledge that the Treasury had managed to cut the public purse's exposure to bank guarantee schemes in the wake of the credit crunch, and was doing better at holding on to key staff. |
| The committee also said the support provided to banks during the credit crunch had helped prevent the banking system from collapsing. | The committee also said the support provided to banks during the credit crunch had helped prevent the banking system from collapsing. |
| "We are pleased that the Treasury has successfully withdrawn nearly all of the taxpayer guarantees to banks, but the taxpayer still owns some £66bn of shares in RBS and Lloyds, a sum which is yet to be recovered," the MPs said. | "We are pleased that the Treasury has successfully withdrawn nearly all of the taxpayer guarantees to banks, but the taxpayer still owns some £66bn of shares in RBS and Lloyds, a sum which is yet to be recovered," the MPs said. |
| A Treasury spokesman said: "The Treasury is focused on its job to support the government's strategy to deal with the country's debts and rebalance the economy to ensure Britain succeeds in the global race. | A Treasury spokesman said: "The Treasury is focused on its job to support the government's strategy to deal with the country's debts and rebalance the economy to ensure Britain succeeds in the global race. |
| "Over the past two years over a million private sector jobs have been created, the deficit has been reduced by a quarter and interest rates have been at near record lows, benefiting businesses and families." | "Over the past two years over a million private sector jobs have been created, the deficit has been reduced by a quarter and interest rates have been at near record lows, benefiting businesses and families." |