The Burnham idea that we must all come under Regional Mayors is not a way of taking local opinion and community feeling more seriously. It will often do the opposite. Regional Mayors will be able to override local Councils. They will grab powers from below more than wrestling powers from above.

The EU Re set is designed for the EU to requisition powers of self government to make us obey EU laws, extinguishing important UK freedoms. A tapestry of Regional Mayors looks much like the loathed Europe of the Regions attempt to balkanise England into unloved regional conglomerates, ignoring geography, history, place and local feelings.

In my part of England the majority want an end to letting in and housing illegal migrants and want the closure of the local migrant hotel. The  majority does not want to pay extra taxes for the state failure to control the borders. We do not want excessive new housing development over our remaining greenfields, preferring a period of no net migration to cut the need for extra homes.  We want a lower Council tax paying just for  good core services.

If we get lumbered with a Regional Mayor the costs of government go up with a needless new layer, and the tax goes up to pay for it. Mayors are dear, coming with new ways to waste our money and new ways to make us pay for their excesses. If the government is serious about wanting more say locally they need to listen to areas like mine which say No to more government.

We would not want a Mayor to insist on us taking more illegal migrants, nor that we need to build more homes on greenfields. The people of Wokingham supported getting rid of two tier local government, opting for a unitary Council. The nation opted to get rid of the needless EU level of government. The UK government and a unitary Council is quite enough bureaucratic structure. Trying to set up more wastes money, delays sorting out the real issues and threatens to override local opinion.

Successive Prime Ministers have enjoyed public support   to condemn the Russian invasion of Ukraine and the vicious attacks on civilians in Ukrainian cities. They have also been right to keep UK forces out of the war. Ukraine is not a member of NATO. The UK does not want to declare war on Russia. NATO relies heavily on its US contribution. The current US President wants a negotiated peace in Ukraine and does not want a war against Russia.

So far so good. The problem with these popular positions is they leave Ukraine locked in a bitter and never ending conflict with Russia with insufficient support from allies to drive Russia out of the parts of Ukraine they do occupy. So what we have seen is a creeping rise in types of military support with Western allies gradually increasing the ferocity and capability of weapons they will supply. There has also been some movement from only supplying weapons claimed to be defensive and confined to use in Ukraine, though there is still some caution about supplying weapons that could be used by Ukraine in and against targets in Russia.

This is still not enough to allow Ukraine to overwhelm Russian positions in East Ukraine. The Ukrainian  ability to develop and make lots of relatively cheap drones has negated the use of Russian tanks and has now largely frozen frontlines, creating a killing zone between the front trench lines of the two sides. Ukraine however relies on substantial financial support from the West and their weapons exports to supplement home production.

The US under President Biden was most cautious over what types of weapon to allow Ukraine. Under President Trump the money and weapons sent to Ukraine has been reduced after early years generosity. The President sees the Ukraine war as being an EU responsibility. After all, he reasons, the EU wants Ukraine to become a member.The Europeans he thinks should take. more responsibility for their own defence after years of heavy reliance on US forces.  The original Russian invasion of Crimea resulted from the EU helping get an elected pro Russia President out of office, de stabilising the situation though that was no excuse for the Russian actions that followed.

The Germans have responded to the need to increase help but France and the other leading EU states have not. The EU talks of accelerating EU membership, not ruling it out while the war  continues. NATO is clearer. A state cannot join to enjoy the Security support from others whilst fighting a war, for obvious reasons.

What should the EU do to help its candidate member? What role should the EU play in trying to stabilise its borders? What are the EU’s objectives over expansion to the east?

Wokingham suffers under a Lib Dem led unitary Council, doubtless like others around the country. There is nothing liberal about them, constantly looking for new ways to regulate and tax us. There is little that is democratic, ignoring what we want even when they do bother to consult us.

I have written before about their disastrous £5.5 m roundabout remodelling scheme. The public did not want it. The roads did not need it. We now have a former roundabout with no legal junction signs  to guide drivers. The carriageway  sports fading painted leaves with no clue as to their meaning or use.

Today I wish to report their latest likely folly. I have long been critical of Councils having access to relatively cheap loans to make “investments” in property, renewables etc that are not needed for Council operations. I got the last government to cut back on this. Some  Councils have already borrowed too much, run out of money to pay the interest on the debts and needed a bail out and permission for yet higher taxes.

Wokingham now wants to sign contracts to borrow money to install a solar farm on land it owns. The original £20 m scheme to last 25 years has been stretched to £25 m or more  and now  to 40 years.The panels will need new inverters, will deteriorate with age and may need replacing  before 40 years are up. There seem to be problems in getting a guarantee of when they could link it into the grid to be able to start selling electricity.

There are various views of whether it would get into profit and for how long it would need the borrowings. At a 6% interest rate, a little below current Public Works Loan  Board rates the Council would face costs of £60 m over 40 years in interest. They will say they will be paying the loan off as they go. They also may put  some cash into the investment at the start. Assuming they reduced the loan by making regular repayments maybe the total interest cost could still be around £25 m. In order to make these repayments the Council would need full access to the grid throughout the life of the project and a high enough electricity price to cover all costs and leave enough cash to both service the loan and make reductions in it by cash payments. This is unlikely to be guaranteed.

There is no way a Council should be taking such risks with public money. What do they expect by way of electricity charges for the long period of the  plan? When will they secure a grid connection and reliable customers? How long will the panels last? How much will maintenance cost?

This is an easy £25 m saving, also  savings millions in interest  charges going forward. Surprise me Lib Dems. Stop the waste before it happens.

I have long argued the Bank of England should stop selling long bonds in the market, taking big losses and sending Treasury and taxpayers the bill. I was pleased to see an article in yesterday’s Telegraph going over this old ground again. It does need a new push with a new Chancellor, who could persuade the Governor to change this damaging policy.

Labour had no criticism of the Bank’s decision to announce a major sale of bonds at the time of the Truss budget,. They  watched the predictable big sell of in bonds, then saw the Bank reverse its policy, announce temporary buying of bonds and watched  as the market rallied strongly. They never objected to the huge losses the Bank recorded from end 2022 onwards both by selling bonds at big losses in the market which were needless and by having to accept smaller losses on bonds as they matured, all covered by taxpayers and the Treasury.

Now the new Chancellor should think again. He should ask the Governor why he still thinks it a good idea to lose well over £200 bn on bonds from Q3 2022 to the end of the bond programme and seek to persuade  him in private that a change of policy is needed. No other Central Bank is behaving  like this. The losses can and should be reduced.Taxpayers  deserve a break from the Bank’s extreme policy.

I have written about it many times from 2022 onwards. Here are two takes from this site:

10 June 2025

The first thing to do is for the Chancellor to tell the Bank she will not pay for any more losses from selling bonds in the market. No other central bank does this. There is no stated good purpose for  the policy.The Chancellor’s permission was needed for the purchase, and the Treasury guarantees against loss.This gives her the right to order a stop to sales.

The second is to raise with the Bank the running losses where the  Bank spends far more on interest on commercial bank deposits than it receives in interest on the bonds which were bought at very high prices when interest rates were much lower. The ECB for example pays a lower rate of interest on its deposits than its lending rate . The Bank of England has the  same rate for lending and borrowing. The Bank could require a minimum level of reserve deposits by commercial banks at zero interest.

Some suggest paying nothing on any of the deposits. This has not been tried in recent years when these much larger deposits have built up. The ECB got  away with reducing the interest it pays. Markets might be more alarmed by the sudden withdrawal of all interest payments to banks. There could also be a knock on effect on bank lending and growth from the sudden sharp reduction in bank profits and cashflow. Better to proceed with more prudent  steps to carry markets with you.

 

And

Bank of England losses

OCTOBER 28, 2024

As someone who studies bonds and sometimes writes about them I dread the times when they become leading news items. It is usually for a bad reason. Markets can get in a panic if governments issue too much debt or if inflation takes off, hitting the value of the bonds and driving up the interest they pay the saver.  It leads to a lot of fevered and often badly informed commentary on the media, as the media accept the credentials of some  “experts” who struggle to explain a bond in simple language or in some cases struggle to understand the bond themselves.

A bond is a government debt. Many governments like the UK and US borrow large sums from the banks, pension funds, insurance companies and the investing public. They do so by issuing a large new debt for anyone to buy a small portion of the new big loan. The buyer gets an electronic certificate that they have bought a share of the debt which states how much interest they will get on their investment, and when they will get their money back. The UK government will borrow the money for a specified time period with a fixed repayment date (the duration of the loan) and will guarantee to pay a fixed rate of interest every six months throughout the duration of the bond. Inflation linked bonds are different.

These bonds are a convenient way for funds and savers to invest. They know exactly what rate of interest they will get, like making a fixed rate savings deposit with a bank. They know exactly when they will be repaid. More importantly, they know that if their circumstances change and they need to get their money back in a hurry, they can sell their bond to someone else in the market any time it is open. So far so good.

The catch is if you do need to sell before the repayment date, you might not get back the amount you paid the government in the first place, or the amount you paid to buy the bond in the market. If interest rates go up in the meantime the value of your bond in the market goes down, as people will want to get a higher income on your bond than you are getting. They can only do this  by paying you less for the bond than the original issue price because the amount of interest paid is fixed. The interest paid is then a higher percentage of their cost of the bond than it was of your original cost of the bond.  A bond with no repayment date (like a stock with a very  distant repayment date)  issued with a promise to pay 1% interest annually will halve if the interest rate goes up to 2%, as the £1 guaranteed interest stays the same so to get 2% on that bond you can only afford to pay £50 for £100 of the original issue. £1 interest is 1% of £100 and 2% of £50.

Where I often part company with the commentariat is when I hear them say these government bonds are safe assets. If you or your pension fund had bought the UK government’s 0.5% 2061 bond at issue you would be sitting now on a 77.5% loss on your original purchase price. So if you had bought £100 worth you could sell it today for just £22.40.  These longer dated government loans or bonds are highly volatile. Before covid the Bank of England and the UK government issued a lot of debt at very low interest rates with repayment dates many years ahead. Once interest rates started going up to deal with a bad inflation, you were bound to lose a lot of money if holding these investments. It is true that if you wait until 2061 you will get your money back, but in the meantime you will only be getting an unacceptably low 0.5% on your money when a savings deposit or a shorter dated government bond would pay several times that.  If you own the 4.25%  UK  gilt  repaying in December next year you can sell your £100 worth of that for £100 today, or hold and enjoy the 4.25% annual interest for the remaining  year and bit when the government sends your £100 back.

It is true that a government bond from a reliable state like the UK or US is safer than some corporate bonds issued by some companies. They might go bust, or get into financial difficulties so they delay or cut the interest payments. The US and UK have met all their interest payments in the past and are very likely to continue to do so. That has not been true of all other governments with some failing to meet payments when they have got into financial difficulties. Germany signed a 1953 Debt Agreement cutting some of its debt obligation by agreement  with its creditors. Brazil reneged on some debts in 1987. Since 2020 Sri Lanka, Argentina, Ghana, Zambia, Ecuador, Ethiopia and Lebanon  have all defaulted or suspended some payments on debts.

It is untrue to say that any government bond with a very distant repayment date is “safe”. In times like today those bonds will sell off to low prices. They can be ravaged by inflation at any point in their long lives. Both the US and UK governments are having to pay a much higher rate of interest on  their borrowings today than at any time this century. That is because they have already borrowed too much and are refusing to rein in their high levels of new borrowing which places more strains on a  reluctant bond market. The danger is a doom loop, where higher interest rates drive up the amount government has to pay in interest charges on its debts, which in turn worry the markets as these could become unaffordable.That happened to the UK Labour government in the 1970 s when it ended up having to pay 15.5% on one of the bonds it issued. It then of course had to announce spending cuts to try to get back in control of its runaway finances.

Mr Burnham tells us he feels passionate about everyone having  a bed and a room for the night. That is a good ambition. He then acknowledges that some people sleeping out refuse Council accommodation. When he was Mayor of Manchester he had some success in getting numbers sleeping out down at first by offering beds to those who did want one and accepting a minority did not. Then numbers started to rise again. He ascribed this turn round to the idea that people sleeping rough elsewhere heard of the Manchester scheme to find people beds, so they came to Manchester to add to the demand.

This perception has caused Mr Burnham a problem. He now has to say he needs to take national action to end involuntary rough sleeping because any well intentioned Mayor may follow a policy which is undermined by the lack of a policy elsewhere in No Mayor lands or in Uncaring Mayor lands. His idea that we will all be better off with more powers for Mayors takes a tumble as he seeks to find a national override on the one thing above all else he cares passionately about. Homelessness was always before a local government responsibility. Councils have a better knowledge of the local housing market and what is possible.

He should also do a little more thinking and see the same applies to the problem of illegal migration. Under a new national policy to offer any rough sleeper a bed and room presumably illegals who get into the UK who do not have accommodation can sleep rough and qualify for the rough sleeping accelerated provision of housing. Mr Burnham needs to be aware he could be creating more demand for his homeless policy, just as he says he did in Manchester when people came from outside to take advantage. Could he face more illegal migrants seeing the way they could use the rough sleeper accelerated access to housing as an additional benefit of breaking the law to get here?

Mr Burnham says he wants to stop the boats and smash the gangs, but still has not set out how he will do this. He now needs to be careful lest the policies he is following encourages more migrants. The policy of dispersal for migrants housing to dearer parts of the country will add to the costs and do nothing to act as a deterrent to migrants who see the UK as a soft touch. Labour’s abolition of the Conservative law that an illegal could not claim asylum here coupled with abandoning the Rwanda scheme before the legal situation was sorted out have already made the task much more difficult

The other evening as I sat down to relax the following came up amidst my personal emails:

”You must take action so we can check who is eligible to register to vote at your address. Complete the steps below by 3 September 2026.

It takes just a few minutes online.

Visit the website

https://www.householdresponse.com/wokingham

Enter your unique security code

Part 1:  supplied – where is pen and paper to record it?

Part 2:  supplied

then your postcode

Update your household information and submit

Include the names and nationalities of everyone who lives at this address.

It is important you remember to add any eligible resident aged 16 or over (they will not be able to vote until they are 18).

If you add any new people they will also need to complete a registration application. They can do this at https://gov.uk/register-to-vote. We will send each person a form if they do not apply online.

Only one person from your household needs to respond.

We will send a reminder email next week then a letter containing this information before the end of September if no response is received.”

Etc Ed

 

This is  typical  of my local Lib Dem Council. Bossy, annoying, wasting money on things that do not need doing. First registrations of people should be thorough and based on evidence. Annual renewal should go back to being a process where you only need to respond if there are changes. This bossy email of course comes from a Do not reply address so you cannot get back at them with a  response or feedback.

There are so many things now that require registration, confirmation, on line identity checks and the like. Taking rubbish to the local tip now requires overcoming digital hurdles before you dare drive to the dump. You need a slot and an electronic permit. Parking in a Council car park your taxes have bought needs downloading an app and supplying them with more data. Driving is a challenge with the revolving street closures, excessive potholes, roadworks, unused cycle lanes and permanent reductions in roadspace.

Yesterday the Lib Dem Council was wasting our money on a new torture for motorists to impede us driving to the shops. There was a  three way traffic light to block one of the two carriageways of a main road into town for no stated reason. They managed this by having a needlessly long green phase for the side road with no traffic needing to exit. Theis held up 64 vans and cars that I counted on the main road whilst we were  all awaiting a chance of a green light to squeeze through.

Law abiding tax paying hard working people now feel bombarded with demands and stultifying rules. The government local and national does not offer us friendly public service. It treats us as worker drones to pay  its bills. It creates rules to milk more money from us in licence  fees and fines for mistakes with compliance. It lectures  and hectors us.

The latest figures  for wages confirm the Labour trend. They see the public sector as good, the private sector as bad.They think the public sector is still underpaid, and the private sector paid too much. Annual average earnings growth was 6.1% for the public sector and 2.8% for the private sector, a very  large gap. Bonuses have to be earned by generating more turnover and profit in the private sector. The  public sector pays bonuses for failure, as with the bonus payments to senior Post Office Executives for losses and false charges against staff. The bosses  of HS 2 got rewards for big delays and massive cost overruns.

In the private sector people have to compete to get quality up and costs down. Failure to achieve a good enough performance leads to job losses and sackings for poor performance. In the worst cases it leads to bankruptcy, business closure and loss of all jobs. Big failings on quality and cost in the public sector like hospital avoidable deaths or rail crashes caused by nationalised tracks and signals lead to bigger  grants  of money and agreement it was no-one’s fault. The answer for most problems in the public sector is more resources. In the private sector it is often better management.

The private sector is finding the demands of the public sector too great, leading to businesses reducing staff, cutting other costs, or closing down. A haughty and demanding public  sector  seeks through regulation to make normal working more and more  difficult, whilst  through higher taxes it makes it less and less worthwhile.

No wonder vacancies have fallen again, jobs are down and unemployment up. Labour’s savage tax and regulatory attack on the private sector is having the predictable effect of closing things down or forcing cuts the public sector would never accept for itself.

All last winter I was agitated when walking by the Thames. I saw the authorities lowering the sluices to let billions of gallons rush to the sea for fear of flooding. Why not draw more of that water out and store it for summer?  I have always remembered the 1976 disaster when a nationalised water industry ran out of water in some areas and imposed strict rationing. This weekend my Thames walk showed me a river with surprisingly  good levels of water, with sluices and locks sending large volumes  downstream. There is of course need for extraction in London where Thames river water is part of the supply.

The government still shows no urgency about tackling the obvious water shortage, brought on by a big increase in population  and by increasing use of water as people become better off. There are several things to do

1 have a big scheme to encourage and grant aid farm reservoirs, both to irrigate crops and as a back up for the wider public supply. Offering just £15 m this week for farm reservoirs is pathetic. Make it £150 m this year and more next.

2. Get Thames Water to speed up use of the Beckton  desalination  plant.

3. Review Abstraction licence limits to see if we can store more river water

4. Pass emergency legislation to speed up planning permissions and other permits for new Water industry reservoirs.

5. End large scale migration into the UK.

The UK needs a lot of new infrastructure. It needs it to replace  old worn out facilities. It needs  it to lift to modern standards and to accommodate modern technology. It needs it to catch up  with the big surge in population this century. And yes I did speak out against excessive migration, warning of stresses on housing and infrastructure.

Here is a list of some what we need

1. the 9 new reservoirs in early stage planning to match water demand

2 10 new gas fired combined cycle power stations to balance and back up the big increase in unreliable renewables

3 New oil and gas exploration and development to cut imports and CO 2

4. Complete the trunk road network to at least dual carriageway standards

5. Install digital signals on all main rail lines

6 Complete upgrade and installation of broadband to all addresses

7 Put in new hospital bed capacity

8 Renovate, not close, old prisons

9. More data centres

1,2,3,6,9 are all private capital needing state permits and back up infrastructure. The others require state capital to be met from within the existing budget total. Spending on carbon capture and storage should be stopped, and so called investment spend on non operational property and net zero projects by councils banned.