The Bank of England created £375 billion in new money, supplied to banks with the expectation that they would lend it to businesses that would, in turn, stimulate economic growth.
What actually happened is that the banks used it to pay off their own debts and continue to speculate in the same way that caused the credit crunch. Widespread personal debt remains unchanged, household incomes have fallen and job security has reduced.
Alternatively, if the QE had been evenly divided amongst the approximately 40 million economically active people in the UK, some would surely have squandered it, some would have spent it on amateur dramatics it and some would have drunk it. All of which might be considered inadvisable uses of a windfall, but all would have introduced the money into the UK economy rather than hiding it under a bed in Switzerland, Hong Kong or Shanghai.
The likelihood is that most people would have paid off debt, saved it, invested it or spent it on essentials such as food, services and consumer durables. Some might have hidden it in tax havens, but most people are not government ministers, bankers or retired boy-bands.
If I had been given a 40 millionth of £375 billion in 2008 (approximately £9,375), I would have spent some of it paying off my credit card and overdraft, put some of it in the bank and spent the rest on a motorized slider for my timelapse work. That’s right, I would have reduced personal debt, contributed to bank liquidity and invested in business.