The banks are multinational and too big to fail. Mrs Thatcher saw to that. Increasing uk interest rates before 2007 would have had no effect. It would have caused a uk recession but the banking crisis would have still happened here. Uk banks would simply borrow somewhere interest rates are low (not parking reserves in Bank of England) and atill lent into dodgy high yield markets such as US sub prime. The madness with derivatives would have still happened. In 2008 net borrowing was 2.6% of GDP, net debt was 36% of GDP and structural deficit was 2.6% of GDP. The next year net borrowing and trebbled (6.7% and then 11.1% last year) as had the structural deficit (rising to 6.3% and then 8.8%). Net debt rose from 36% of GDP in 2008 to 43% and then to 52%. These changes have bugger all to do with labour spending and everything to do with the costs of the worldwide bank induced great recession. In 2008 there was a Worldwide financial crash. The cause is the fundamental basis under which the money supply has operated since the 1980s. Basically the only way we currently allow the money supply to widen (allowing growth) is for private banks to create new money as debt. This is how 97% of all new money (£2.6 trillion of it since 1997) has been created. This has nothing to do with labour (it has to with Mrs Thatcher and Mr Reagan if were looking for blame) and is how all G20 countries now work their economies. There are very good reasons we should return to the system we had before the 80s as the cause of our problems is the debt and inequality that allowing the banks to create debt causes. What should happen is massive QE to buy back government debt and then the Bank should destroy the debts. Fortunately this process is fairly advanced now with the wholly publicly owned Asset Purchase Facility owning a third of all outstanding government debt the OECD think this will rise to 40%. In our current liquidity trap with the money supply contracting due to the banks, private sector and households all deleveraging there is no danger in doing this and it will be done. However, To prevent inflation this needs to be matched with a corresponding decrease in bank leverage levels – making the banks safer. The result is a money supply, not based on debt that ensures less recessions and financial crashes. This is how the money supply operated for thirty years after WW 2 – a period of high growth, no financial crashes and only two very mild recessions. Also much more equality and very high growth in real terms earnings and living standards. The Tories get over 50% of their funding from bankers. They have done nothing to reform the banks and have removed the bankers bonus tax. What we need is public outcry to force the seperation of retail from casno banks now – not in 2019. We need a statutorylimit on bankers earnings at 25 times minimum wage. We need a financial transaction tax. We need a banning of tax havens such as the Crown protectorates. We need a full ban on over the counter derivatives. Bankers and media magnates should be banned from political patronage. Guilty bankers should be thrown in jail.