When governments seek to protect the rich from the poor, they act swiftly and decisively. When they undertake to protect the poor from the rich, they fanny about for years until the moment has passed.

On Tuesday afternoon the House of Lords will consider a bill containing a cruel and unnecessary clause, whose purpose is to protect landlords who keep their houses empty. Under current law, if squatters move into your home (or a home that you are soon to occupy) and fail to leave the moment you ask, the police can immediately remove them.

The only houses with weaker protections are those that remain empty. There are 700,000 such homes in England alone, almost half of which have been empty for a long time. They have long been a refuge for street sleepers and other homeless people. Landlords already possess civil powers to remove them, and the police can step in if squatters ignore the court orders.

Last year the government launched a consultation on criminalising all squatting in residential buildings; 96% of the respondents argued that no change in the law was necessary. But on 1 November, just five days after the consultation ended, the government jemmied an amendment into the legal aid bill, already halfway towards approval. This meant that the House of Commons had no chance to scrutinise it properly, and objectors had no chance to explain the issues to their MPs.

The result of this blatant insult to democracy is that people who have housed themselves at no cost to anyone are likely to be summarily evicted. Houses will fall back into disuse, and the government's housing bill will rise: by between £35m and £90m, according to the campaign group Squash. Worse still, the new law will help unscrupulous landlords to evict tenants where there is no written contract, by declaring them squatters and calling the police.

Compare this rush to prosecute the poor with the government's leisurely approach to banking reform. It will wait until 2019 to implement the mild measures proposed by John Vickers. As Robert Jenkins, who sits on the Bank of England's financial policy committee, points out, the date is distant enough "to allow lobbyists to chip away until the proposal becomes both unrecognisable and ineffective".

David Cameron's proposals for addressing executive pay have the same function: they are designed to be as ineffective as possible while creating an impression of action. On Monday he announced that he wants to scrap the top rate of income tax, making the people who caused the economic crisis even richer and the poor poorer. Those who contest the destructive practices of the feral rich, by contrast, are harried by draconian laws and paranoid policing.

Last month City of London police sent a letter to the banks titled "Terrorism/extremism update for the City of London business community". It warned of the following "substantial" terrorist threats: Farc in Colombia, al-Qaida in Pakistan, and Occupy London. It advised the banks to "remain vigilant" as "suspected activists" from the Occupy movement were engaging in "hostile reconnaissance" – the sort of language that might have been used to report German spies in the second world war. When asked to explain the letter, the police told the Guardian that it had been circulated to "key trusted partners". The banks are the trusted partners of our impartial law enforcers; those who seek to hold them to account are terrorists.

The police keep ratcheting up their tactics to ensure that protest against the status quo is futile. On 30 November they introduced a new one: the pensions march in central London was sealed off with three-metre steel walls, meaning that no one except for those marching could see what was happening or read the banners. The protesters were, in other words, prevented from explaining their purpose to the public.

While the government has introduced no meaningful sanctions to discourage a repetition of the crash, it has also failed to repeal the oppressive laws preventing us from challenging those who caused it. When he became deputy prime minister, Nick Clegg promised that the government would "remove limits on the rights to peaceful protest". But there is no such measure in the protection of freedoms bill, which was supposed to have been the vehicle for this reform, and which also comes before the Lords on Tuesday.

The restrictions on assembly and peaceful protest in the 1986 Public Order Act, 1992 Trade Union Act, 1994 Criminal Justice Act, 1997 Protection from Harassment Act, 2003 Anti-Social Behaviour Act and 2005 Serious Organised Crime and Police Act remain unrepealed. Together they permit the police to stop any protest they wish and arrest the participants. Far from reforming the law, the prime minister has hinted that he will tighten it further. Speaking to the Commons liaison committee in November, he claimed that "the right of people to protest is fundamental" but that "you shouldn't be able to erect tents all over the place". His approach to the issue is the same as Tony Blair's: you can protest, as long as it's ineffective.

The effort of both police and government is to predetermine political outcomes. They are using the law to make democracy safe for business and the super-rich: ensuring, in other words, that it isn't really democracy.

• A fully referenced version of this article can be found on George Monbiot's website

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