Charity can ensure QE reaches firms

I believe it would be possible to use this “printed money” more directly by giving it to a new business charity set up to provide finance for new businesses.

This charity would need to have a well-known entrepreneur with the right attitude to new starts. A name that comes to mind is Sir Tom Hunter, but there are others with similar credentials.

The charity would start with no capital and, like all QE, would apparently incur no expense as the money available to it would all be derived directly through QE.

Instead of loans, the money could be invested in equity. This would make it easier in the first two to three years, when paying interest on loans tends to be difficult.

Later on, where the business was successful, the share of the profit by way of dividends would be greater for the charity. At a suitable point the equity could be sold, hopefully at a profit, and so be available to other new starts.

If at some time in the future it was felt that such a scheme was no longer required, the charity could be run down and used to repay more of the national debt. Once started, however, it is likely that it would be found useful to continue without the need for new capital.

In addition to this use for QE, I also suggest certain other charities, which have suffered cuts in grants, could have these restored so that the money goes directly to the most needy and so be used directly with the secondary purpose of stimulating the economy.

This would be much more sensible than using it to reduce VAT which is spread overall and, as we know from the last time it was reduced, has little real effect.

Ronald J Wylie, Kirkcaldy