We need an end to Bank of England independence and the power of the Treasury

Posted on

Nick Macpherson, who was for some time the permanent secretary (or civil service boss) at the UK Treasury, has an article in the FT today, saying:

This weekend the Treasury and Bank of England will be breathing a collective sigh of relief.

Officials no longer have to worry about the prospect of a tax-cutting mini-Budget in the autumn. The Bank of England no longer has to worry about politics clashing with monetary policy decisions.

The rest of the article is about the importance of having a sound fiscal plan, rather than an excellent fiscal rule, but the real giveaway in what Macpherson (who I have never had much time for) has to say is in those opening comments.

They say that the Treasury and Bank of England think they are back in charge, and you can be sure that Macpherson knows this.

In other words, whatever the electorate thinks or does, and whatever the potential politicians due to arrive at the Treasury soon might suggest now, those who want to maintain the profound bias within the UK fiscal establishment in favour of wealth and austerity are safe in the knowledge that this is the outcome they are going to get.

No wonder wise people think two things.

One is that the Bank of England's independence has to end.

The other is that the power of the Treasury has to be broken up. A ministry of government accounting, another of tax, and a third of economic development are required. But the perpetuation of the power that the Treasury now has is the last thing that this country needs.

Starmer will not, of course, make any such change. Rachel Reeves wants that power very badly.

Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:

You can subscribe to this blog's daily email here.

And if you would like to support this blog you can, here: