THE Government’s announcement of another £80bn gift to the banks is a scandal (Echo, June 14).

The Bank of England will offer banks credit in return for security on any bank asset, good or bad.

In other words the dodgy loans that the banks issued to people who didn’t have either the income or collateral to pay it back are being transferred to the tax payer.

More public money is therefore being given to financial capitalists whose greed caused the economic crisis in the first place.

The spin being put on the latest bank bailout is that it will enable businesses and individuals to take out more credit from the banks.

But, who in their right mind would willingly extend their credit in the current economic climate?

According to the Institute for Fiscal Studies, average incomes fell by 4.1 per cent in the tax year 2010-2011, having already fallen in the two previous years.

In fact, incomes for ordinary working people are declining at a faster rate than during the Great Depression in the early 1930s.

Thus, the possibility of yet another temporary economic boom funded by bank credit is nil.

There is an alternative to this madness – state-funded and state-run infrastructure projects.

Credit is so cheap at the moment that the Government could borrow money for almost nothing. In the North-East it could start by building fast electric tramways, reinvigorating the school building programme and creating more decent and affordable homes for young people. This would provide well paid skilled jobs and improve society as well.

John Gilmore, Bishop Auckland.