Lord William Wallace writes…Winning the argument on higher taxes

We need to focus on how we handle issues of taxation.  Opinion polls now show, for the first time in decades, that more voters favour raising taxes than cutting them.  That does not mean, of course, that such a majority is in favour of themselves paying more tax; there’s a natural tendency to support increases that fall on others, above all on the richest.  

Even before the COVID-19 pandemic struck, it was evident that the UK’s tax base was too low.  An ageing population, low levels of public and private investment, salaries in the public sector kept lower than in the private, local government, schools, hospitals, prisons and police all strapped for funds, all indicated the need for higher public spending.    The massive public spending which the pandemic is requiring – and will continue to require for months to come – adds to the pressure for an overall increase in taxation.

This is an existential issue for the libertarian right, strongly entrenched in the Conservative Party and its associated think tanks.  The mantra of the Taxpayers Alliance, the Institute of Economic Affairs (IEA), and others is that it’s impossible in the UK to raise more than 40% of GDP in tax, at most, and that for the economy to flourish public spending should be reduced to around 35%.   Their aim, of course, is to curb public spending by reducing public revenue.  Rishi Sunak has just promised to bring ‘the overwhelming might of the British state’ to bear on the pandemic and its economic legacy, in his speech to the virtual Conservative conference.  That’s anathema to his party’s right-wing.

The Institute of Economic Affairs has just published a new briefing paper which addresses the COVID-19 debt burden, the UK’s problem of low productivity, and recommends – deregulation and tax cuts, rather than increased investment in education and training for our workforce and in public infrastructure.  I thought the Laffer Curve had been discredited long ago; but the IEA depends on the illusion that cutting taxes increases growth to resolve the contradiction between cutting revenue, promising a balanced budget and raising public spending.

So what should we be saying in this right-wing dominated debate?  Starmer’s Labour is likely to be as cautious about sticking its neck out on this as on Brexit and other issues. Pledging an extra penny on income tax signals our willingness to raise revenue to underwrite higher public spending; behind that our economic team can prepare detailed proposals on other taxes, allowances and charges to support our next manifesto.  Green taxes, capital taxes (including on houses) must also be part of the mix.  If we were still in the EU, we would be coordinating our approach to the high-tech tax-avoiding companies, as well.

The IEA argument that a higher level of tax is unsustainable rests on their claim that tax avoidance blocks further revenue.  So we should go for the City of London’s tax avoidance industry, and call for the government to ‘take back control’ of the offshore network of UK dependencies and territories which facilitates its operation.  Germany and the Netherlands support successful mixed economies with levels of public revenue and expenditure several percentage points higher than the UK; so also does Canada, among English-speaking countries.  Many of the Conservative Party’s biggest donors are non-doms or offshore billionaires: we should highlight the close links between leading Conservatives and these major tax avoiders.

The hard right say they want a ‘sovereign’ Britain.  In reality, they want to make Britain more like Australia or the USA under Republican administration.  There’s a simple reason why US Republican Administrations run deficits, and Democratic Administrations come closer to balancing their budgets; Republicans cut taxes, but fail to cut spending in parallel.  There’s a simple reason why the Taxpayers Alliance, the IEA and others say so little about their plans for public expenditure: they want to cut spending further, know that isn’t popular, so return to the old argument that cutting taxes releases the animal spirits of entrepreneurs.  Rishi Sunak knows that’s nonsense, post-COVID.  We should embarrass him, and expose the motives of the hard right, by vigorously agreeing.


* William Wallace is Liberal Democrat spokesman on constitutional issues in the Lords.

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  • A good word in season from William Wallace. The Taxpayers Alliance get far too much respect from the media. When will they ever seriously ask how many taxpayers or organisations they represent?
    It is very difficult to get a public debate going about what taxation is for. “A penny on income tax is OK as far as it goes as a simple way of saying “It is worth raising taxes to improve services” but we need to find ways of digging a bit deeper undermining the dominant assumption that taxation is a necessarily evil to be kept firmly within limits.
    Personally I see taxation as a mark of a civilised society and something worth celebrating. This does not stop us criticising governments who at any given moment use it recklessly (e.g. by shovelling our public money in the direction of their commercial friends) and limiting the public good it can do.

  • richard underhill 6th Oct '20 - 9:29am

    Lord William Wallace | Tue 6th October 2020
    “We must go to the moon” said John F Kennedy and Senator Lyndon B Johnson knew how to persuade Senators to quietly accept what the President was saying about the expense.
    Sputnik was a reflection of sunlight. Ronald Reagan spent heavily on the B Bomber, creating lots of well paid jobs in California, whereas the average US taxpayer was not getting a new car, according to Tom Lehrer.

  • Gwyn Williams 6th Oct '20 - 9:51am

    @Chris Cory . The Higher rate of 40% in England and Wales kicks in at £50,001. A graduate on £40,000 would pay a marginal rate of income tax of 20%. I take your point about NI and student loan contribution.

  • richard underhill 6th Oct '20 - 9:58am

    I would like to recall Ian Paisley Junior
    ?Anybody else?

  • John Barrett 6th Oct '20 - 10:00am

    It is interesting to note that the basic rate of tax now, plus the 9% for those repaying student loans, is still a lower total rate than the basic rate of tax paid back in the day when people like me received grants for going to university.

    The total paid then and now is almost exactly the same, at around 30%.

  • Innocent Bystander 6th Oct '20 - 10:10am

    How could the Laffer curve ever be discredited?
    How much revenue would a tax rate of 0% raise?
    How much revenue would a tax rate of 100% raise?
    So it must go up and down again?
    That’s a curve isn’t it?
    There is left wing wishful thinking and then there are the laws of physics. As I have said before paying tax is voluntary. You can not force enterprising, energetic people to make themselves extra money just so you can tax it. Any number of failed states have discovered that if you discourage those people from ‘having a go’ they won’t.

  • Katharine Pindar 6th Oct '20 - 10:14am

    This is a very useful article, William, thank you, in considering both the mindset and the practical applications of right-wing thinking. I think there is indeed much to uphold in the Chancellor’s spending commitments, perhaps especially in the attempts to support young people’s new training and job opportunities. We will also need to fly the flag for financial support for local services, which is not in this government’s agenda, and especially to my mind for increases in rates of welfare payments, which are urgently needed, and where help to the poorest can most readily be given as is not the case with the prospect of any UBI.

    Certainly we need to put forward our taxation proposals, to underpin the spending demands. How do you think the Government can indeed ‘take back control’ of the offshore networks?

  • Peter Martin 6th Oct '20 - 10:21am

    The important point to remember about taxation is that it isn’t to fund government spending but to control inflation.

    Usually this will mean that it is able to spend more than it receives but sometimes if the rest of us are being too enthusiastic in our spending it will be the other way around. So govts of the right may choose to have lower taxation whereas more sensible governments may choose to have more spending.

    But they shouldn’t get caught up in the neoliberal trap of trying to explain “where the money is going to come from”. Saying you’ll put “a penny on income tax” is at best tokenism and at worst leading you to down the road of having to promise to put many more pennies on income tax. This will mean you can kiss good-bye to chances of electoral progression.

  • Nigel Jones 6th Oct '20 - 11:09am

    A very helpful article from William and I like his suggestion of giving some support to Rishi Sunak. Our daily press releases project an image of always complaining, but having little positively to say about building a better UK. It is noteworthy that Kier Starmer has now combined attacks on the government about Covid, with his own five point strategy for the current crisis. Yet, we need to push Rishi further, because, as Katherine Pinder says, he has not considered how to meet the urgent need to improve local services and help for the poorest, including those likely to suddenly find themselves on the bread line. I would add the need for social housing too, which has an effect on all those who rely on rented accommodation; housing costs and conditions affect people in many ways. Can we also urge Rishi to come up with a long-term strategy that is fair to all, not just a temporary solution to the crisis ?

  • William writes, ” The mantra of the Taxpayers Alliance, the Institute of Economic Affairs (IEA), and others is that it’s impossible in the UK to raise more than 40% of GDP in tax, at most, and that for the economy to flourish public spending should be reduced to around 35%.”

    I can’t help saying that has a very strong echo of David Laws et al and confirms my opinion that you couldn’t put a cigarette paper between that wing of the party and the Tories.

    Again, Nigel Jones sums it up well.

  • Michael Sammon 6th Oct '20 - 12:59pm

    Why so eager for higher taxes? Now is not the time.

  • John Marriott 6th Oct '20 - 1:20pm

    Peter Martin reckons taxation is all about controlling inflation. You could have fooled me. I thought it was about paying for the things that contribute to our having a civilised society.

    Call me naive if you like but I would willingly part with more of my relatively meagre income if I felt that the money could be targeted appropriately. So, let’s start with the Basic Rate of Income Tax.

  • We don’t need to punish production any more. It’s an artefact of an aristocratic society controlled by landowners who sought, and largely succeeded in palming off the running costs of the country that created their wealth for them onto the wealth creators, from bread, beer and window taxes right down to today’s ubiquitous income taxes and capital taxes.

    The tax system we have is overly complicated, places a huge deadweight loss on production and trade, and rewards the “idle” and “extractive” processes of monopoly ownership.

    We should collect the rent created by such monopolies, which, after all, even the smallest nightwatchman state protects at the expense of all those who don’t exclusive own a share. We have a birthright, expressed by people like Thoma Spence 250 years ago and TH Marshall more recently, to share in the collective, socially created surplus generated by a successful community.

    #abolishtax #sharetherents #valueourplanet #makepovertyhistory #realisedemocracy

  • Peter Martin 6th Oct '20 - 3:44pm

    @ John Marriott,

    “You could have fooled me.”

    Would I want to do that? 😉

    I thought it was about paying for the things that contribute to our having a civilised society.

    Most of it is if you consider the difference between real and nominal taxation. But there’s a margin for discretion. If we are all stuck at home, like we’ve been for the past few months then we aren’t spending much. No foreign holidays. No night clubbing. No tickets at £50+ a pop for Premier League matches. No taking our family out to expensive restaurants etc etc.

    So, if we aren’t doing much spending the Govt can spend more to make up. On the other hand, if we are all going crazy, the Govt needs to tighten up a bit.

    That’s just how it is.

  • Our penny on income tax for the NHS and social care gives an important message to voters – that we will increase taxes for most people if elected to pay for improved services. (I would prefer if we introduce this new income tax rate only for those earning above medium earnings – say at £27,000 a year, but it might have to be 2%.) So we should keep it, but recognise that a penny on income tax only raises about £7.7 billion. If William Wallace is correct we have already won the argument for increased taxes.

    We as a party need to get away from the idea that we can only increase government spending if we increase government revenue to pay for it.

    Growing the economy by 3% increases government revenue by about £24 billion. We, as a party, have recognised that having a better performing economy can produce extra government revenue that is why in 2019 we talked about the Remain bonus.

    We need to now think about sovereign money – the peoples quantitative easing. Where the Bank of England creates money for the government to spend, rather than the government having to borrow the money.

    We need to know that government spending and revenue, the size of the deficit and the amount of money created each year are economic decisions and decisions about the balance between all four should be set according to what we think the economy needs to produce economic growth and full employment and to control inflation.

  • Nonconformistradical 6th Oct '20 - 4:51pm

    @John Marriott
    “Call me naive if you like but I would willingly part with more of my relatively meagre income if I felt that the money could be targeted appropriately.”

    Perhaps there wouldn’t be a need for you to pay if the tax avoidance industry was brought to heel.

  • John Marriott 6th Oct '20 - 6:06pm

    Yes, I am naive. We are all happy to pay more in tax as long as someone else pays. By all means close the loopholes but I still reckon that the basic rate could go up a bit. If not, why not a Health Tax and a Care Tax?

    @Peter Martin
    As you will probably gather, when it comes to understanding how taxation works, I’m a bit of a novice (it cost my old man a fortune in extra tuition fees to get me a pass in O Level Maths). Forgive me if I’m wrong; but, from what you are saying, you would appear to be a big fan of indirect taxation, like VAT for example as, indeed, have many governments over the years. I often wonder what the salesman in my local Curry’s might say if I asked him if I could have my new fridge at a lesser price as my income was that bit lower than many others. Yes, I could go for a cheaper and less sophisticated brand, which might not last as long, you might answer. Personally, I view much indirect taxation as rather sneaky. I prefer the full fat variety myself. That doesn’t mean a green light for government to splash the cash on any project (HS2 might be a good example) and of course you need value for money. However, if you have skin in the game, you might take a bit more of an interest in how the money – your money – is spent at all levels and might actually go out and vote a bit more often. As Paddy used to say; “No taxation without explanation”.

  • Graham Evans 6th Oct '20 - 7:14pm

    @John Marriott. Increasing taxation is to reduce the money supply, and hence the demand for goods and services, and thereby helping to curb inflation. Increasing direct taxation has a more immediate impact because increasing some forms of indirect taxation can take longer to feed through to reduced demand. Moreover while increasing VAT does eventually reduce demand, in the short term it increases inflation.

    Taxation also serves the purpose of redistributing wealth, so though the overall level might stay the same, for some people the government might increase taxation and for others reduce it (or increase public expenditure on those services which benefit the poorer sections of society most).

    Lastly taxation can be used to direct resources and investment by having different levels of taxation for different activities.

    What taxation doesn’t do is directly finance public expenditure. That is financed by the Bank of England creating money to service the economy.

    The comparison between government income and expenditure and household budgets is fundamentally flawed as any basic economics course will tell you. The comparison is used by politicians because it sounds simple – simple but wrong!

  • @ Graham Evans “What taxation doesn’t do is directly finance public expenditure”.

    So, Mr Evans, as a loyal member of the Liberal Democrats, are you saying all that old Lib Dem Chestnut of ‘a penny on income tax’ for education or the NHS or anything else that was fashionable at the time is a somewhat disingenuous terminological inexactitude designed to mislead the electors ?

    Are there was naive old me believing all that stuff back in 2000 and frozen to death.

  • Graham Evans 6th Oct '20 - 9:26pm

    @ David Raw In those days I too naively believed the comparison between a household budget and government income and expenditure. Moreover because the comparison was widely believed to be true by an overwhelmingly majority of voters politicians played to the narrative, rather than challenging the underlying assumption.

    However we have now moved on in our understanding of the economy, firstly as a result of the GFC and now because of Coronavirus. Until the GFC the concept of QE would have been unthinkable to any respectable central banker or government. Now it is regarded as an essential tool of managing the economy. Yet the only difference between QE and MMT is that adherents of QE think that the newly created money must be withdrawn from circulation in the foreseeable future. And yet the foreseeable future is now way beyond the horizon. Moreover anyone who thinks that the money created to tackle the Coronavirus crisis is going to be withdrawn from circulation to any significant degree in the next decade is either naive, or else willing to countenance a level of austerity which will make the last decade look like a walk in the park.

  • @ Graham Evans “However we have now moved on in our understanding of the economy, firstly as a result of the GFC and now because of Coronavirus.”

    Nah, it’s much older than tha, Grahamt. Henry V111 was at it as long ago as 1542 in the Great Debasement . Winston Churchill could have done with a bit of it in the 1920’s when he went back to the gold standard…… whereas the poor old working class Cragg Vale coiners got hanged for their enterprise in the 18th century..

  • Peter Martin 6th Oct '20 - 10:05pm

    “…adherents of QE think that the newly created money must be withdrawn from circulation in the foreseeable future.”

    I’m not sure about that. The only way is to tax it out of the system. None of the political parties will want to do that too readily. The only sensible policy is the MMT one of increasing taxes to slow inflation if and when the QE money can be seen to be causing an overheating of the economy.

    There may not be a need for large tax rises if the automatic stabilisers are allowed to do their job. A more buoyant economy will always generate more taxation revenues.

  • Graham Evans 6th Oct '20 - 10:30pm

    @Peter Martin The Government could sell gilts and instead of using the money to increase public expenditure simply return it to the BoE which would adjust its balance sheet accordingly. Whether the Government would actually do this or increase taxation is not really the point. Adherents of QE think they should do one or other of these options in order to avoid inflation taking off. However currently the problem isn’t inflation but deflation.

  • Graham Evans 6th Oct '20 - 10:33pm

    @ David Raw Even the Americans abandoned the gold standard decades ago. With a fiat currency and a central bank the whole fiscal and monetary game changes.

  • John Marriott 7th Oct '20 - 10:01am

    Far be it for me to intrude yet again into this learned exchange of views. However, mention of ‘inflation’ tempts me to do so. Now, I always thought that inflation had something to do with supply and demand. Clearly I was wrong, according to Mr Evans, at least.

    Take the ‘Barber Boom’ in the early 1970s for example. One of its most obvious effects was the quadrupling of house prices between 1970 and 1974, something which severely caught my wife and I out when we returned to the U.K. after spending four years abroad and wanted to buy our first home, having rented before we left as newlyweds.

    Now I know that other factors played a part, like OPEC quadrupling oil prices following the Yom Kippur War and unions demanding large wage increases, not forgetting the easing of credit (“ACCESS takes the waiting out of wanting”). Whether it was houses or cars or whatever, if insufficient products were available to satisfy the demand of people either with extra cash in their pockets or the ability to borrow it more easily, there was clearly only one way for the prices of these products to go in a society reluctant by then to introduce price and wage controls.

    So, the semi we could have bought in 1969 in Newark for around £3,000 now cost us in Halifax around £10,000 by 1974. What I pity we hadn’t bought something and rented it out while we were away; but we didn’t. Not that we couldn’t afford the asking price, because, even back then, for the combined salary of a teacher and a secretary, the deposit was still manageable, unlike today, where that same semi would probably cost you anything up to £180,000! I don’t think that salaries have matched that rise. OK, thanks largely to cheap labour in the Far East, other goods that would have been considered luxuries back in the early 1970s are considered essentials today. But not the most essential requirement of all.

    So, in my humble opinion, unless you have a plentiful supply of goods to satisfy demand, printing money will just make those goods more expensive in the long term. Look what happened in Germany after WW1. (Cue for Mr Martin and another tangent!?)

  • Talking about tangents, John, back in my student days I developed quite a respect for poor old Gustav Stresemann.

    One of the better sort of Liberals. Who knows what might have happened if he had lived.

  • Peter Watson 7th Oct '20 - 12:22pm

    I finally got round to Googling “MMT” and learnt that it stands for Modern Monetary Theory, not Magic Money Tree as I’d guessed. Don’t know if I’m any the wiser though.

  • John Marriott 7th Oct '20 - 1:12pm

    Yes, David, we are back into ‘what if?’ territory. Where to start? What if Harold had socked it to William the Conqueror? What if Drake and Co had failed to stop the Spanish Armada? What if Bonnie Prince Charlie hadn’t turned round at Derby? What if Princess Charlotte of Wales hadn’t died in childbirth and her still born son had survived? What if the South had won the US Civil War? What if Kaiser Bill’s dad hadn’t succumbed to throat cancer barely 80 days into the latter’s reign? What if the first attempt on Hitler’s life at the Bürgerbräukeller in 1938 had succeeded? What if Hugh Gaitskell and John Smith not died prematurely?

    Stresemann might have succeeded in holding a democratic alliance together. However it was events outside his control, namely the Wall Street Crash, leading to the drying up of US loans to the Weimar Republic, which swung things against a German industrial renaissance, not forgetting an unsatisfactory and ambiguous conclusion to WW1.

    Stay safe. Protect Nicola and yourself!

  • Peter Martin 8th Oct '20 - 12:45pm

    ” I thought the Laffer Curve had been discredited long ago; but the IEA depends on the illusion that cutting taxes increases growth to resolve the contradiction between cutting revenue, promising a balanced budget and raising public spending.”

    The Laffer curve is OK up to a point. If you want to maximise the revenue from any one thing, say cigarettes, then there will be an optimum level of taxation to do that. Too little and you won’t get enough. Too much and people will either quit or resort to the smuggled alternative. But if we want them to quit……

    But defenders of Laffer don’t usually consider they need to consider total taxation revenue. If people are buying fewer cigarettes they’ll be spending on something else and paying different taxes. VAT is a tax too and a reduction in that could help stimulate the economy. Whether it helps “balance the books” doesn’t matter in the slightest. If it leads to higher than desirable levels of inflation then it could need to go back up again.

  • Peter Martin 8th Oct '20 - 12:55pm

    @ Graham Evans,

    “The Government could sell gilts”

    True. They could. If they had the buyers. But, presumably, they don’t because otherwise why would Govt have instructed the BoE to enter the market?

  • Graham Evans 8th Oct '20 - 4:02pm

    @ John Marriott. Of course domestic inflation is caused by the balance between supply and demand. That’s why you can addres excessive inflation by reducing the money supply, and one of the ways you do that is by increasing taxation. I don’t understand why you imagined I thought otherwise.

  • Graham Evans 8th Oct '20 - 4:10pm

    @ Peter Martin. The BoE entered the market by buying gilts to increase the money supply and hence demand. Of course as the bank now holds some so many gilts if at some stage it wants to reduce the money supply it will sell those gilts to reduce the money supply.

    As for buyers, there certainly won’t be a shortage of domestic buyers, particularly if the yield is attractive. Insurance companies and pension schemes need to hold long dated bonds to hedge their long term term liabilities, while banks could be forced to buy gilts if the BoE/Government changed banks’ capital requirements.

  • Peter Martin 8th Oct '20 - 8:42pm

    @ Graham Evans,

    “The BoE entered the market by buying gilts to increase the money supply and hence demand.”

    This is the official fiction.

    Just what does ‘money supply’ mean? Money is created and destroyed endogenously. It’s just about impossible to say what it is. Anyone with an ability to spend can choose to exercise that ability or they can choose to carry on not spending. ie Carry on saving. Gilts are freely convertible into cash. So anyone holding gilts has just as much spending power as someone holding cash.

    If the BoE buys gilts it adds to the demand for them and forces up the price. A higher price corresponds to a lower yield which in turn corresponds to lower interest rates. This is the purpose of BoE intervention. So are we more likely to spend if interest rates are 0% rather than 1%? Possibly but it’s not going to make that much difference.

  • john oundle 9th Oct '20 - 1:23am

    ‘Why so eager for higher taxes? Now is not the time.’

    Everyone is a fan of higher taxes as long as it’s somebody else paying them.

  • Graham Evans 9th Oct '20 - 8:18am

    @ Peter Martin You have identified the weakness of QE. Just because the financial institutions which sold gilts to the BoE became flush with cash, it doesn’t follow that this then flowed through the general economy. Decisions by companies to invest aren’t simply based on the interest rate or indeed the availability of credit. There is an argument that adopting the US approach of helicopter money might be more successful in boosting consumer spending, but even that might not work because consumers might simply use the money to pay down debt.

    So we’re inevitably brought back to old fashioned Keynesianism. The government should step in to directly spend money. The Government doesn’t need to issue gilts to do so. It simply uses its overdraft facility with the BoE, which adjusts its balance sheet accordingly. There are perfectly legitimate reasons for the Government to issue gilts to help financial institutions to manage their affairs, but issuing gilts to pay for government expenditure isn’t one of them.

  • Graham Evans,

    You list many correct things, but then wrote, “What taxation doesn’t do is directly finance public expenditure. That is financed by the Bank of England creating money to service the economy.”

    Government revenue (i.e. taxation) does finance most of public expenditure. And it can fund it all when the economic conditions warrant it. However, it is important for people to know that unlike their personal finances a government has no need to balance or be in surplus as a matter of principle. Governments can run deficits for a long time and if we look at UK governments it is a rare government that runs only surpluses or even any budget surplus.

    I would hope that anyone who studied economics or the Keynesian policy of full employment understood that government finance was not like a household’s budget. There is no excuse for any of our MPs to have held that view this century and I am not sure any did. They believed our economy was like Greece and that austerity was the correct policy to have after a recession. I don’t understand why any of them believed this, but I worry that most of them still believe austerity was the correct policy in 2010. I am also concerned that a majority of the members of the Federal Policy Committee and the Federal Conference Committee believe that all increases in government expenditure have to be covered by increases in government revenue.

    David Raw,

    Do you think Gustav Sresemann’s death in October 1929 caused the downfall of the Hermann Muller government in March 1930 rather than Muller’s health? I think the decisions of Hindenburg were much more important. If he had supported the Muller government with emergency powers as he did with the Bruning government history might be different.

    Peter Martin,

    Where do you get the idea that the government will buy back gilts on demand, they have a due date when the principle will be paid.

  • @ Michael BG. I agree with you. Hindenburg was far from impartial in the granting of emergency powers.

  • Peter Martin 10th Oct '20 - 4:01am

    @ Michael BG,

    “Where do you get the idea that the government will buy back gilts on demand, they have a due date when the principle will be paid.”

    Gilts can be bought and sold before their due date.

    At present, though, the Govt (if we consider the BoE to be a part of Govt) is doing exactly this. ie ‘Buying back gilts on demand’.

    “Much of the debt will be quickly sold on to the Bank of England (BoE) as part of its £200bn quantitative easing (QE) programme, which currently does not permit it to finance the government spending directly.”

    So the nonsense of the situation is that the the BoE isn’t allowed to buy bonds directly from the Treasury but they are allowed to buy from someone else who’s only bought them in the first place because they know they can sell them to the BoE at a profit.


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