John Redwood's Diary
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My IEA article on EU

October 10, 2026 59 Comments
I did not expect to have to spend time rehearsing all the arguments we made to leave the EU so soon after we left in 2020. When we joined the EEC those of us who lost that referendum did not call for a new vote six years later. Treaty after Treaty went by taking ever more powers to Brussels fundamentally changing what  the public had voted for. We waited until Maastricht and its radical changes. A “Common market” was evolving into a political and economic Union.  We finally got a vote 41 years after the first.
Too little has changed since we left. Successive UK governments have been slow to make the good changes an independent country can make. We  still live under reams of EU laws and taxes which slow our economy down as they did when we were in the EU. We do however enjoy some good wins from no longer paying huge sums to the EU. Much more than the £350 m of savings a week on the side of the Brexit bus has been allocated in extra spending to the NHS. The UK has ducked having to pay  a share of the £750 bn the EU is now borrowing  in its own name. As we have plenty of debt of our own that is a blessing.
There  are some ironies in the Brexit freedoms the Labour government have been able  to use despite their hostility to  the UK going it alone. The damaging  VAT on school fees policy beloved of the left and the  more sensible cut in VAT on electricity  were  only possible thanks  to Brexit. The government has enjoyed taking credit for trade deals with countries like India  and with the  Pacific countries TPP which were well advanced when they took over. They  were only possible because we have regained control of our trade policy from the EU.
Remain politicians have wrongly claimed UK GDP took a 4% or an 8% hit from leaving , based  on a misinterpretation  of  forecasts that said no such thing. One said over fifteen  years  we might have 0.25% less growth per year, making 4% less growth in total by 2035, whilst the  UK economy would still carry on growing. The  other said if we grew like the  USA and a few other faster growing countries we would be 8% better off. That  of course would never have happened if we stayed in slow growth EU usually managing only half the US growth rate. Neither forecast said GDP would fall after the  vote. The Remain campaign wrongly claimed we would see falling GDP, falling house prices, rising unemployment if we voted Out. The opposite happened in 2016.
UK GDP tracked EU GDP fairly closely from 2016 and from leaving in 2020. Like EU economies there was a sharp fall in GDP in 2020 with covid lockdown, and a big recovery in the following two years. The UK did not suffer an additional Brexit fall. The UK has been growing faster than Germany and a little faster than France since 2016. Our trade, especially with the rest of the world and in services, has grown well. The majority of our trade is services, and a majority is with non EU.
Some say we would grow faster if we rejoined the Customs Union. The opposite would be true. We took tariffs off non EU imports of food and goods we cannot produce  for ourselves. We took tariffs off raw materials and components industry needs to import to add value  and make things here. The Customs Union would increase the  squeeze on consumers, put prices up, raise industry’s costs and make us less competitive. We would  need to give up our Free Trade Agreements  with non EU countries, slowing trade growth with the rest of the  world which is now the majority of our trade.
The government says we need to re set our EU relationship. This is code for rejoining by stealth. They will agree to progressively adopt  more EU laws and taxes, sector  by sector, until we are more fully back under EU control. The  idea is to start with food where UK exports are small and where the EU is keen to dominate our market, keeping out non EU cheaper food  through regulations and tariffs. The government is scrambling to avoid the imposition of regulations which would inhibit or ban the great work in the UK on genetic modification of crops to deal with pests and low rainfall.
The UK has established higher levels of animal welfare in farm trade, banning the export of live animals and establishing better standards for animal husbandry. These too could be at risk with  a poor Re set.
The Re set will require agreement on a Youth mobility scheme. This is an EU attempt to reintroduce much of the freedom of movement of people that applies to EU member states. The problem for the UK is it is likely to be one sided. There are many more under 30s on the continent than in the UK. There is a bigger proportion  wanting to come to the UK to take advantage of our high standards of university education and jobs available, and wanting to improve their English. There is a smaller percentage of UK young people with enough foreign language skill to go to a continental university or get a foreign job.
As the UK struggles with its own young people problem with far too many out of work and not studying, the last thing our jobs market needs is more young people seeking work. Our universities are apprehensive that the student deal may entail including a big discount on the fees European students in the Uk currently pay as the EU presses to get the much more favourable UK home student terms. How will they make up the lost income?
The UK has already sold out on the EU Erasmus student scheme, agreeing in principle to pay a ridiculously expensive £800 m a year to a fund  which will help a lot more EU than UK students. It means ending the successful and cheaper Turing scheme which only pays out to UK students and allows them to go to universities all round the world, not just in the EU like Erasmus. UK students are keener to go to high quality universities in the USA and other English speaking centres.
As the UK is brought into more EU laws and regulations under the Re Set proposals the UK will have to pay an administrative charge to cover EU costs, whilst also incurring its own substantial costs on government and business from the laws themselves. Worse still the EU is threatening to insist on a solidarity charge where UK taxpayers have to contribute to public spending in the lower income member states! The costs of Re Set will be billions a year. The UK government has no extra money spare, so which taxes will it put up to pay these extra and needless EU bills?
The UK government sacrificed a large quantity of our fish stocks to EU fishing licences for 12 years, giving away around £6bn of value just to get into talks. It showed the EU that if it just hangs tough the UK wilk give plenty more away. The UK never negotiates as the customer, yet with such a large balance of trade deficit with the EU we are more customer than exporter. Why don’t we demand payments for access to our lucrative market? Why don’t we set standards for the conduct of this trade? Why don’t we show that our lower tariffs and fewer rules delivers better results? That after all is what the Draghi Report is telling the EU from one of its own most famous insiders.
Worse comes in the energy sector. The EU wants the UK to join its carbon tax and emissions trading scheme, which entails even higher costs than our own domestic version. The last thing we need is dearer energy to close down more of our factories. The EU is successfully making the UK dependent on importing energy from the continent as net zero policies close down the older fossil fuel stations that always gave the UK electricity independence. The coming carbon border tax will be another rise in the costs of industry’s imports of raw materials and other supplies, adding to the lack of competitiveness.
Mr Burnham’s idea that maybe we should go back into the EU is  completely absurd. Why would the EU allow it when the main opposition parties would be opposed and threatening to pull out as soon as they won an election? The EU would be bound to say no more rebate on contributions, greatly hiking the cost of membership compared to last time. They would want us inside their Euro scheme preparing to abolish the pound. They see us as Treasure island, weak enough to pay them large sums and with sufficient borrowing power and taxing power to be able to afford a larger contribution. They should realise this time the UK has overspent and over borrowed despite saving billions from ending its expensive membership. It is doubtful the UK does now have the borrowing and taxing capacity to  add large EU bills and debts to its big collection of home grown ones.
Any attempt to take us back in would need a new referendum. Polling shows people feel let down by the lack of progress after Brexit, but are still strongly against surrendering powers back to Brussels.  It didn’t work last time. Since then the EU has become an even slower growth area slipping further and further behind US economic and digital success.

UK did not lose 4% of GDP from Brexit

October 9, 2026 63 Comments

 

One of my critics here complains  I do not show charts or graphs when setting out economic arguments. I do use numbers from ONS/Treasury/Bank of England/ World Bank/IMF and check the sources carefully. I do collaborate with Facts4eu.org  who produce excellent charts which I strongly recommend. Go on to their site to see the UK and EU  in great bar charts and graphs. Here is an example reproduced  from them showing how the UK economy has outperformed leading  EU countries since the referendum.

The economy has grown by 14% in real terms since the Referendum
June 2016 – June 2026

The past and future of Jaguar

October 8, 2026 87 Comments

This week Jaguar, a once great British brand of car, revealed its much delayed new vehicle in the US.  As a former Jaguar fan and owner for me it is too dear, too bland and only available with battery power so I will not be buying one. It bears no resemblance to great Jaguars of the past, and has nothing beautiful or eye catching enough in my view to make it break through with a new  distinctive design. This is no modern E type nor even an XJ.

I used to be a Jaguar owner,  changing my vehicle for a new one every two years, making myself a good customer of the Jaguar company. When they prematurely ended the S type and moved to the XF they allowed articles to appear saying they did not want the buyers of the old style car as they were launching something more modern for a new audience. Despite this I went along with the change and bought an XF. It was hopeless in the snow and ice that winter and it annoyed me in its handling and control whilst I was underwhelmed by its looks. I traded it in for a Land Rover 4WD which did work in the snow and have never bought a new Jaguar since.

Over the last year Jaguar did its best to kill off many other loyal supporters by getting itself into the absurd position of having no new car to sell anyone. It could have continued its previous ranges and responded to the fact that a majority of car buyers still do not want an all battery car, but it wouldn’t do that. Now it has launched a car eventually that cuts out most past Jaguar owners on two counts. Jaguar was more affordable luxury which this is not, and Jaguar offered petrol and diesel variants which this does not. I guess it was first revealed in the US because there are more billionaires and multi millionaires there who might want one as part of their garage full of cars. Overtaxed UK will not have many desperate to spend so much on this vehicle.

Land Rover has continued with diesel and petrol cars and some more affordable vehicles for longer, but they too are going in the direction of dearer and hybrid if not all battery.  A lot of their vehicles now do not offer 4WD which surely was the main proposition you  expected of a Land Rover? 4WD is useful on grass and in the rain going to sports and summer events as well as for when we do have icy snaps in winter. It’s  not just needed for off roading.

The UK industry has responded to government dictats, ignoring customer preferences. It is sad to see the collapse of a once great brand with much reduced likely future sales, as China takes over the battery car market for the many. A brand’s value rests with the number of loyal customers it can recruit, please and retain. Jaguar has just ensured even more loyalists to the brand can no longer see it as their natural choice.It is dearer to try to recruit new customers than keep the ones you already have.

My Conservative Home article on Referendums

October 7, 2026 61 Comments
When referendums are essential
The people are sovereign. UK democracy has evolved to embrace  this basic precept, with a long gestation through Magna Carta, the 1660 settlement, the Glorious Revolution and universal suffrage legislation. Through direct political action of motivated groups, civil war, and Parliamentary led reform we arrived in the last century as a sovereign nation with ultimate power in the hands of the people. Government proceeds and is only possible with the consent of most of the people to how we are governed. Government needs the obedience of most people to the rule of  law as laid down in Acts of Parliament and by our independent judges. Governments can undermine the law by wrongful deeds and by enacting widely unpopular laws. It is important governments can be removed peacefully.
In recent centuries the people have delegated their sovereign governing powers to Parliaments. Each Parliament is time limited, and its members know that if their laws and taxes displease enough people they will be swept from  office at the next election. An incoming government will have a mandate to change any law and tax it has inherited that displeases.
Although there is no binding Act of Parliament to say so, most of us think that if Parliament wants to give away its powers to govern and to manage parts of the government to a superior power for a period longer than a UK Parliament, there should be a referendum. The people give power to Parliament for a limited time in the expectation that the power will be well used. Giving power away for long periods particularly to foreign jurisdictions with no ability to ensure good use ruptures the constitutional settlement.
Most of us think it was therefore right to offer the public a vote on the  original entry into the European Community, which should have been called before entry. All agree it was  crucial  to have a popular vote to decide to leave.  The principle of regular government accountability through elections  was damaged by membership of the EU. The European Parliament could not be changed by the UK alone and did not offer much control of the Commission executive. The UK’s wishes were often ignored, negotiated away or voted down in a qualified majority vote in a meeting of EU Ministers without press and public present.
Some pro EU influencers sought to impose and enforce superior law and superior tax raising powers by getting more determined in Brussels and made legal through our adherence to an international Treaty. We the people could no longer remove laws and taxes we did not like by removing those from office who imposed them. The UK people as a result voted in a referendum to come out of this binding arrangement. They had previously voted retrospectively to stay in when they were told it was just a common market. It turned out to be much more.
We should embed the constitutional doctrine that any government wish to join or leave an international body that takes sovereign powers away from us must require a referendum. This need not apply to other international bodies which have no ability to override our Parliament. NATO for example is a close and important defence alliance, but it does not have any legal power to make us fight a war or use our forces in a particular way. It is a coalition of the willing deciding things by negotiation and agreement between sovereign countries. Our membership of the UN includes the all important right to veto any Security Council resolution that is against the UK interest.
We should also require a referendum to change the voting system and powers of Parliament. The Coalition government at the request of the Lib Dems put their chosen system of alternative voting to a referendum. There was 68% support for keeping the present single member constituencies with the winner of an election being the person with the most votes. It would clearly take another referendum to seek to change the system again.
There can be other times when it might help to  ask people directly for their views instead of government weighing opinion alongside other considerations when making a decision. Our  powerful Parliament can and does the ability  to hold referendums on other topics, with voting systems of its choosing and in places where it sees fit. Use has been made of this to settle the future of some grammar schools and to see if people want elected Mayors and new systems of local government. That power does and will continue to reside with Parliament. It is good practice to allow local referendums on the powers and geographies of Councils where a government seeks change.
The UK is a Parliamentary democracy. We should be proud of our traditions. We should  recognise the importance of the struggles of some of our ancestors to limit the powers of the Crown, to resist authoritarian government, to give everyone the right to a voice and vote, and to ensure a fair and enforceable rule of law.
Referendums are only essential where a government wishes to make changes in the way we chose our Parliaments and in the powers the Parliament holds on our behalf. The essential ones need to be embedded in our constitutional settlement as they have emerged from the trials and errors of EU membership in recent decades. Other referendums may be desirable and can be helpful to Parliament when splits in the country are recreated as uncertainty in the Commons. They are a good idea when Parliament wishes to make big adjustments to the shape and powers of Councils.

Why joining the EU Customs Union would damage the UK

October 6, 2026 74 Comments

The pro EU parties who want us to join the Customs Union do not seem to understand what a Customs Union does. The EU one would put up UK prices, harm UK business competitiveness and undermine our flourishing trade with the rest of the world .

If we joined we would need to put tariffs back on a wide range of goods from non EU. We took many tariffs off when we left. We took all tariffs off goods we cannot make or grow for ourselves. Why pay more for them with no home industry to try to protect? We got rid  of tariffs on imports needed by UK business as raw materials and components. Tariffs on those raise UK business costs and make our finished goods dearer.It would be self harm to reverse our tariff removals.

If we joined we could no longer negotiate our own Free Trade deals with the rest of the world. We might have to tear up our successful and important trade deals with the Trans Pacific Partnership, with India, Australia, New Zealand, Caribbean countries and others. This would damage trade and relations with important and growing markets.

We would lose our right to speak and vote as a full member of the World Trade Organisation which regulates  world trade, as the EU handles that brief and would make us follow their tariff decisions.

The purpose of the high EU tariffs is to protect farms and factories on the continent offering product that would not be competitive without a high tariff on the global competitors. The UK is primarily an importer of goods and food  from the EU, not an exporter to them. It is not in the UK interest to have these suppliers protected by high tariffs and charging high prices.

The UK mainly sells services which are not subject to tariffs in most places . The UK needs to be able to sign good trade deals with strong clauses on services. The EU did not help us with that when we were members.

 

Why we should not rejoin the EU

October 5, 2026 74 Comments
  2. The UK growth rate halved over our 48 years in the EU compared to the 20 years before we joined. People do not want to lock back into a low growth high tax system.
  3. Rejoining would  mean imposing a new EU tax to pay for  membership. The cost would be considerably more than when we were in, as we would lose the rebate Mrs  Thatcher secured, and the EU budget is now much bigger.
  10. Accepting the full net zero and common energy  policy would mean even dearer UK energy, worsening the cost of living problems  and closing down more industry.

Nationalisation and the 1970 s did not work

October 4, 2026 55 Comments
My IEA article
Mr Burnham is so wrong about deindustrialisation. He and I share the same anger at its pace and extent, but a different view of how and why it is still happening. He claims that it was mainly in  the Thatcher period, when the historical figures tell a very different story. He thinks it was because policy was too free enterprise, when much of the damage to UK industry was done by large nationalised businesses that became infamous for the numbers they sacked and the huge losses they heaped on the taxpayers.
In 1947 when it was nationalised the coal mining industry employed more than 700,000 miners. All the  jobs were destroyed by the time the last mine closed in 2015. The losses were spread over all the post war governments, with a particularly large number of pits closing in the 1960 s under Labour.
In 1947 when the railways were nationalised they employed 650,000 people. By the time of privatisation in 1997 that had collapsed to 150,000, a fall of more than three quarters.  The rail industry had lost huge market share and failed to spend its large capital budgets on moving with the times. It had no rail link to Heathrow, one of the world’s busiest airports and had watched as industry moved to new estates by motorways in despair because rail did not want their waggon load traffic.
Shipbuilding employed 220,000 in 1950. Today  that is down to 24,000. It shed labour under nationalisation as well as in the private sector. It went from building a peak of 1.3 m GRT in 1950 to building very little by 1990, with a modest revival through  naval orders since. Its period of nationalisation did not stop the losses.
The steel industry still had 323,000 employees in 1971. By the time of its privatisation after Labour’s 1970s nationalisation it was down to just 52,000 and is still in decline. Now renationalised as British Steel it is likely to see the end of all blast furnace steel and more job losses under its new owner.
The Labour government of the 1970s presided over a sharp decline in industrial employment as did the Blair/Brown governments 1997-2010. In 1997 Mr Blair inherited 4.379 million jobs from the Conservatives. By 2010 when Mr Brown lost office that had slumped to 2.87 m, a fall of a third. It is true there was also a substantial  fall under early Thatcher, continuing the rail, coal and steel trends of the previous Labour government.
As the 1980s advanced the Thatcher government helped rebuild the car industry whose output had halved under Labour in the 1970s, doubling it. Privatisation of telecoms led to a large surge in telecoms private sector investment, innovation and choice, which in turn boosted the City which needed better communications and lines capable of taking data.
If you take the ONS index of manufacturing output capturing all production industries the picture looks a bit better. The Index stood at just 40 in 1948 and progressed to a peak of 104.7 in 2007 before the great recession hit. It was still at 101.3 on the eve of covid in 2019. Under Margaret Thatcher manufacturing output did increase by 9.1% overall. If however you look at manufacturing’s share of GDP that has been in continuous decline for many years. As as in other advanced countries,services have been outperforming industry. Under Labour 1997-2010 manufacturing as a share of the UK economy halved from 20% to just 10%.
So why have traditional industries like coal, steel, shipbuilding and rail, done so badly and destroyed so many jobs? Part of it is their time as nationalised industries. The 1974-9 nationalising government got impatient and had to publish a White Paper exposing the losses, the low returns, the failure to spend the large capital investment programmes wisely by the nationalised businesses.  In  part it was the failure of the state monopolies to move with the times and see how consumer preferences and technology were changing the business landscape. In part it was bad management and difficult Unions conspiring to keep productivity down and costs high. Our shipbuilding disappeared to Korea and Japan because they were so much more efficient. Our coal industry lost out to gas and oil which were better in so many ways. Our rail industry missed out on where the business opportunities were whikst delays and cancellations undermined service quality. Privatisation brought more and better services and gave it a big early boost in passenger numbers to temporarily give hope of a better future. Gradual tightening of central controls and nationalisation of Railtrack  put a stop to that progress.
If we compare overall growth in the 1970s and 1980s Mr Burnham will be surprised to see that 1979-89 the UK economy grew by 29%, whereas for the five years 1974-9 under Labour they managed just 9.5%. It is true that the disastrous European Exchange Rate mechanism gave us a nasty adverse hit in the early 1990s under John Major, but this was a policy Labour and Lib Dems were very keen on. Current Labour never criticise Mr Major’s disaster with that bad EU policy. We few who opposed it were told we were wrong as we watched the predictable damage unfold.  Over 1 million industrial jobs were lost in the 1970s, another 1 million in the 1980s, and more than that under the 1997-2010 government.
The UK industrial sector in  more recent times has been throttled by dear energy under a policy supported by all the main parties in Parliament. Deindustrialisation accelerated under the current Labour government as they doubled down on carbon taxes, dear electricity and a passionate reliance on imported energy at the expense of our own oil, gas and petrochemical production.
I think it wrong that we have set ourselves against home production of energy and energy intensive products. Importing  them is worse for CO2 production , bad for the balance of payments, bad for jobs, and  loses us the tax revenue.
If Mr. Burnham is serious about wanting to halt the rapid decline of industry in the last two years he needs to change his mind on its causes. It is dear energy, the jobs tax, the tax atttacks on business and the net zero bans that are accelerating industrial collapse. Nationalised  British Steel still plans to shut down the remaining blast  furnaces for net zero reasons, with likely karge job losses. Nationalised Great British Rail will plough on with the ruinously  expensive and much delayed HS 2 project mis allocating money on  a huge scale to perpetuate  losses and extend unsatisfactory services on the rest of the network.
For industry to flourish we need lower energy costs and lower taxes, with plenty of competition. More nationalisation will replay the 1970 s when large  nationalised losses led to too much public borrowing, sky high interest rates and the  infamous trip to borrow from the IMF.

Why the EU ReSet will be a very bad deal

October 3, 2026 58 Comments

The outlines of Re Set are clear. It is all give and no take for the UK. The EU sets unrealistic red lines and the UK cones round to capitulating.

1. Joining  Erasmus will cost £800 ma year for a worse student scheme than our own all UK  based Turing fund. UK taxpayers will be paying a majority of their money to EU students

2. UK Universities will probably lose big sums by having to cut  their fees to EU students down to the much lower UK student level.

3. We surrender £6 bn of fish which we should be fishing for ourselves and processing in the UK.

4. We will have to increase our carbon taxes and emissions costs by aligning with the dearer EU scheme.

5.We will have to accept a Mobility scheme for under 30 s, increasing pressure on homes and jobs for young people in the UK. There will be far more EU people coming to the UK than British people going to the EU.

6. We will impose carbon based tariffs or taxes on non EU imports, making UK business less competitive and squeezing UK consumers

7. We will burden every business in the UK with more EU rules  and costs needlessly. The minority that export to the EU already comply for their exports, just as any exporter has to meet foreign requirements in markets they sell to.

8.The EU will send us a big bill for administration and for a “ solidarity” payment. How much will the new EU tax be to pay  for it?

9. The UK may have to water down  its higher animal welfare standards to comply with EU farm trade rules

10. More taxes, more laws, more tariffs on non  EU means less growth, not more. Why make us poorer by hitching us to a slow growth region whose own Draghi Report says is failing to compete with the US and China?

Government incompetence

October 2, 2026 62 Comments
The government would be laughable for its incompetence if it were not so serious.
Rachel Reeves put up National Insurance not knowing that most of the money is paid into the National Insurance Fund. The Fund was solvent so did not need higher contributions. The contributions lost us jobs and damaged business. The Treasury cannot draw down on the £100 bn surplus now accumulated in the Fund without changing the law which they show no signs of wanting to do. So how did that help?
The government loves saying Truss crashed the economy by putting up bond rates. The one day spike in rates under Truss led to a reversal of Bank policy and the fall back in bond yields, so no money was borrowed at those higher rates. This government has instead by spending and borrowing too much driven them well above the one day worst Truss level  and kept them there for 21 months. They have borrowed  huge sums at those higher rates. Who crashed the economy?
Mr Burnham said he wanted to devolve powers to Mayors. His first policy pledge was to end rough sleeping. To do this he will launch a national policy to override Mayors and Councils who have the powers and duties to tackle homelessness but have in many cases failed to use them!
Mr Burnham took his support for devolution to Scotland. Their elected government said they wanted independence or more devolved powers. He said he would fight them to keep the Union. They  would not be able to use  devolved powers to have what they wanted!
The government has just signed off a major change in  Bank of England bond management and monetary policy. The Chancellor signed a letter which both said the Bank is independent, and gave them the authority to make major changes to bond management and to its balance sheet, He clearly did not ask why he was signing a contradiction. Did he know what he was guaranteeing at what price to taxpayers?How has the Bank losing us £288 bn 2022-2036 according to OBR helped our economy and public sector budget?

My IEA article on the bond losses

October 1, 2026 34 Comments
According to the OBR the Bank of England will lose us £288bn from autumn 2022 to the end of their bond portfolio in 2036. The Chancellor has recently approved some wide ranging changes to the way the Bank handles the bonds to try to limit the damage and delay some of these losses. The latest policy set out in the Chancellor’s letter of 17 th September 2026 reminds us that contrary to the general belief that the Bank is independent and decides these matters,the Treasury still has most of the power.
Gordon Brown in 1997-8 made radical changes to the Bank. People remember these for his spin that he was making the Bank “independent” when most of what he did stripped the Bank of crucial powers to control money, markets and banks. The power to issue new government debt in the market was given to a new body, the DMO, in the  Treasury. The power to regulate the commercial banks and other financial markets was given to the Financial Services Authority. He removed the powers of oversight of money and bullion markets. He removed the executive power of the Court of the Bank, making it a non executive supervisory body.
In return he gave the Bank the sole power to fix the base rate and to provide independent forecasts of inflation and the economy. Even these powers had an override allowing a Chancellor to intervene in the public interest if necessary. Alastair Darling with other Finance Ministers had to do this to prevent  extreme Bank of England tightening bringing down even more banks. The government sets the target the Bank has to hit and can change that,as Gordon Brown himself did when he switched from RPI to CPI, a softer target.
His system unwound with the banking crash, when the regulatory partitions he created impeded prevention and treatment. The Bank and FSA blamed each other  for the big failings to regulate  the banks.  The Coalition government gave the Bank of England some return powers over banking and financial market regulation to correct the Brown mistakes.
The crash itself led the Treasury and Bank to start Quantitative Easing to create looser  and cheaper money and credit. The Bank bought up government debt at  rising prices to get longer term interest charges down. This allowed the government to borrow more at affordable rates to pump prime the economy. Shadow Chancellor George Osborne argued against, claiming this was money printing which was bound to be inflationary. When he took over as Chancellor he changed his view and himself embarked on more Quantitative Easing. He inherited £200 bn from Chancellor Darling and added a further £175 bn in three tranches. Philip Hammond did one tranche of £70bn. At the time of the covid lockdowns Rishi Sunak approved two tranches for £300bn and added a third tranche of £150 bn when recovery was well underway.
Each time more QE was proposed the Bank needed the Chancellor to sign a letter granting consent, and to sign an agreement that the Treasury(taxpayers) would pay for any losses caused by owning these bonds. Towards the end of 2022 a nasty inflation was embedding. The Bank and Treasury without conceding QE had been inflationary reversed the policy. The Bank started selling the bonds back to the private sector, often at big losses. The Treasury who had pocketed the profits on the way up started paying out larger sums to reimburse the Bank.
Last week the Treasury and Bank at last realised that the scale of the losses under the bond sales scheme was unacceptable. The Chancellor has now authorised the Bank to hold the £120 bn of longer dated bonds with the largest losses at current prices until they eventually mature, avoiding taking big losses on sale. He has also said in principle the Treasury will start buying the bonds the Bank wants to sell rather than pushing them out to private buyers in the market which might disturb prices more. This will however mean the government having to borrow more itself to pay for the bonds it is taking from the Bank, so there will still be negative market pressures from government actions.
I have long argued against the damaging actions of these programmes. Whilst I supported the first two tranches of covid QE when the government locked down most  of the economy, as we needed a strong offset, I thought the third tranche was too much and likely to prove inflationary. I tried to get the government to borrow more of the money it needed during the QE phase for longer time periods, as the cheap debt available was clearly an artificial bargain. They insisted on continuing to borrow a lot for shorter dates. We lost the opportunity to have cheap debt for longer.
I have argued against the bond sales in the markets under QT. I urged them to do what the Fed and European Central Bank are doing, winding down their bond portfolios as the bonds reach repayment but not before. Instead the UK has sold large quantities at large losses which the taxpayer has to pay. Private investors have benefitted twice from the programme. They sold out to the Bank  at very high prices and can now buy back at much cheaper prices. The Bank has invaded fiscal policy as it demands the money for its losses.
This is a sorry tale. We await the recalculation to see how much of the planned £288 bn big loss they can avoid by the latest policy. The  Chancellor’s letter makes clear this is not the sole preserve of an independent Bank but a joint policy that has gone wrong where the Treasury and taxpayers pick up the bill and are ultimately responsible. When I tried to get previous Chancellors to stop the sales and curb the losses I was told the Bank is independent. Yet it was their signatures on the letters that underpin the whole policy and mean they had every right to intervene, as the latest Chancellor has now on a Bank rethink agreed to do. He needs to do more to curb more of the losses that are still being needlessly incurred.
 Pity the poor taxpayer. Gordon Brown is the main cause of this by badly changing the regulatory system to allow the big boom and banking bust. This led directly to Darling’s Treasury inventing QE and setting up the taxpayer for losses. The covid episode compounded the problem based on more wrong thinking by the Bank and Treasury. Since 2022 there has been needless harm visited on taxpayers by taking big losses on selling bonds bought at silly prices during peak QE. Other Central Banks avoided extreme losses because they had no Treasury guarantee to fall back on. It is worrying that so many Chancellors signed this all off without asking how much taxpayers might lose.