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Times
23-06-2025
- Business
- Times
Bank of England governor defends QE policy against Reform claims
Andrew Bailey has hit back against Reform UK's claim that its bond-selling scheme and remuneration of commercial bank reserves were tantamount to a 'systemic misuse of taxpayers' money'. The governor of the Bank of England said in a letter addressed to Richard Tice, Reform UK's deputy leader, that 'the UK will keep the benefit of lower debt costs for considerably longer than other countries' owing to the central bank's quantitative easing (QE) programme. Bailey said that the government 'issued much more long-term debt than other countries when interest rates were low and QE had flattened the yield curve', meaning that it will receive 'a longer-lasting benefit in the form of lower debt costs'. The letter was published on Monday but written last Friday. In a letter to Bailey this month, Tice took aim at the Bank of England's bond-selling plans and remuneration of commercial banks' deposits at the central bank, claiming that the policies would unnecessarily cost the taxpayers tens of billions of pounds. The Bank of England pays interest on commercial banks' deposits, which is determined by the level of bank rate, presently set at 4.25 per cent. This means that, as the central bank raised the base rate to tame aggressive inflation since late 2021, it had offered a higher average interest rate to commercial banks on their deposits compared to the average interest rate it had across its bond portfolio. In addition to this, the central bank is often selling bonds that it bought under QE at a lower price than it paid for them. According to latest estimates from the Bank of England, losses on bond sales will amount to about £150 billion, the cost of which the government covers under an indemnity agreement. Between 2013 and 2022, the Bank of England sent £124 billion of profits earned from its QE programme to the government, Bailey noted in his letter. In the wake of the 2008 financial crisis, central banks launched massive bond-buying packages in a bid to stabilise the global economy, a process known as quantitative easing. The measures were revived and ramped up during the Covid-19 pandemic. By raising demand for bonds, central banks are able to increase their price, which pushes down their yield. These lower yields filter through the rest of the economy, which, in theory, stimulates household spending and business investment, thereby reviving economic growth. Bailey said that Tice had overlooked the potential economic costs if the Bank of England had not enacted QE to aid the economy during these shocks. He said: 'It is easy to forget the severe problems we faced with these shocks. Although the counterfactual is unknowable with any precision, most estimates indicate that QE provided very significant support to the UK economy, protecting both jobs and tax revenues.' The Bank of England owned nearly £900 billion worth of government and corporate bonds at the peak of its QE programme. The central bank has been both selling bonds and allowing them to mature as it gradually shrinks the size of its balance sheet. Under present plans, the Bank of England will either sell or allow bonds to mature at an annual pace of £100 billion. Reform UK was contacted for comment.
Daily Mail
14-06-2025
- Politics
- Daily Mail
Government spends nearly £30m of taxpayers' cash on fringe research projects including gay porn studies and recording Syrian harvesting songs
Almost £30million of UK taxpayer money has been spent on fringe research projects including studies into gay porn after the Second World War and recording Syrian harvesting songs. UK Research and Innovation (UKRI) has been given the staggering amount of funding for a number of overseas projects, which appear to have no clear benefit to British taxpayers. The funding includes £850,000 for Birmingham City University to delve into the circulation of gay male porn and porn magazines at the end of the Second World War, a T elegraph investigation revealed. The University of Oxford received more than £350,000 in a bid to preserve the threatened language of Enggano, spoken by just 1,500 people on Enggano Island, in Sumatra, Indonesia. Meanwhile, £784,000 was given to the University of Exeter to build a historical account of the development of child soldiering in Africa. It also received £307,000 of funding to revive ancestral territories, including the language and cultures of the K'omox, Pentlatch, and E'iksan in Vancouver Island, Canada, and the Maori of New Zealand. Edinburgh University were given £123,000 to record 'harvesting songs of displaced Syrian refugees living in Middle Eastern countries', while the University of Warwick received almost £800,000 to study 'invisible women in Italian cinema'. Joanna Marchong, investigations campaign manager of the TaxPayers' Alliance, believes taxpayers will be 'livid' after learning how 'ridiculous some of these research projects have become'. However, UKRI said that funding will only be given to projects that show value for money for British taxpayers and have a societal benefit. Ms Marchong said: 'UKRI have a proven track record of wasting taxpayers' cash on research projects that are no more than virtue-signalling nonsense that don't stand to benefit the people paying for them. 'Ministers need to remember why UKRI was created and return to investing in research that will make a difference to hard-working Brits.' Another project includes a joint study between the University of Roehampton and Stellenbosch University in South Africa, which was given £2.8million in funding to research how music could help the mental health of expectant mothers in Africa. When asked whether the study would also be used to help British mothers, the Stellenbosch University project team did not respond. They did say that 'group music-making has been shown to boost mood and foster social connections' and early research shows that listening to specially composed music during pregnancy 'reduces anxiety symptoms.' Roehampton University also received £805,000 to recreate a performance of the 16th-century play Galatea by John Lyly centred around 'female, trans, queer, disabled and migrants'. While, the University of London received £323,000 to make a film-making union to assist the Mursi agro-pastoralists of the Lower Omo Valley of Ethiopia. Other projects that were given funding included a look into housing rights for marginalised citizens of Lagos and São Paulo. University of Manchester received nearly £250,000 for the study. Around £300,000 was given to Birmingham University to 'promote reproductive justice' for the Pankararu and Xukuru communities in north-east Brazil. The University of Cambridge was awarded a similar amount for the 'restoration of traditional justice in the Sa'th Tama Kiwe Territory in Caldono, Cauca, Colombia'. The majority of projects funded were awarded by the Arts and Humanities Research Council, part of UKRI. While, a handful fell under the National Institute for Health and Care Research. A UKRI spokesman said: 'International research collaboration is vital to help us tackle global challenges in a complex and interconnected world, improving security and prosperity in the UK and internationally. 'Several of the projects highlighted were funded through Official Development Assistance, where the main benefit is required to be in the developing country involved. 'Projects are prioritised for funding through independent expert peer review, as set out in the Higher Education and Research Act. 'UKRI supports a diverse portfolio of investments including curiosity-driven research and strategic initiatives, which drives the creation and exploitation of new knowledge, and develops skilled and talented people for a wide range of jobs improving lives and livelihoods across the UK. 'On average, every £1 of public R&D investment generates at least £7 of net benefit to the UK through the development of new and better goods, services and processes.'
Times
13-06-2025
- Business
- Times
Reform's Zia Yusuf: My Doge-like mission on behalf of the taxpayer
Asylum seekers have been taken trampolining, bowling, to the cinema and on shopping sprees, including to a store selling luxury hair extensions, according to Reform's anti-waste council team. Auditors styled on Elon Musk's Doge (Department of Government Efficiency) said the trips out and other spending at JD Sports and PC World cost taxpayers more than £24,000 between April 2022 and December. The claims were made about Kent county council as part of Reform UK's drive to inspect accounts at ten local authorities of which it won control in May. Zia Yusuf, who is running Reform's Doge unit, said he was concerned that some local authority bosses were treating taxpayers as 'their own personal piggy bank'. He signalled a crackdown on spending on LGBT Pride events set to take place in June and vowed to make payments to contractors for filling potholes. A team of 15 auditors has been assembled by Reform, all working nearly full-time for free. After meetings began with the council earlier in June, Yusuf said his unit had uncovered 'profligate' spending. Up to 3,000 staff at the council can work from home, Yusuf said, but his questions about how laptops were monitored to ensure productivity were met with 'filibustering'. An initial trawl of documents showed that 'civil servants are spending taxpayer money like it's their own personal piggy bank', Yusuf said. Transport for children with special educational needs (Sen) was also identified by Yusuf as an inefficient system. Councils must provide payments for taxis or bus services if the child lives more than a set distance from their nearest suitable school. Costs have risen significantly for local authorities — the County Councils Network estimates that the number of children requiring transport funding has risen by a quarter since 2019. Yusuf said: 'I've been doing some analysis already with some of the team on looking at these contracts and zooming in on how much it is costing per mile to take these kids to school. In most cases, it's somewhere between seven and 15 times the cost of an Uber ride.' Yusuf said he wanted to 'really fight for the taxpayer here and say 'it doesn't make sense, the taxpayer shouldn't be paying seven to 12 times more'. ' He said some councils could save 'tens of millions of pounds'. Yusuf said he recently met a mother whose three children all have Sen and go to the same school but are taken in three cars. 'She just thinks it's really wasteful,' he said. He stressed that 'if you're a parent with a child with Sen, then you've got nothing to fear from a Reform council', adding it was an example of how he wanted to 'deliver better services for lower marginal costs'. Action on 'vanity projects' was also signalled by Yusuf. When asked whether councils should spend money organising Pride events, he said it was up to elected representatives where to spend money — but added: 'Speaking to our councillors, I think you're going to see a lot of those things either reduced materially or cut completely … The bar for spending taxpayers' money should be ridiculously high. And those are essentially vanity projects.' Auditors have started to ask councils for full lists of staff job titles in an attempt to avoid them 'hiding' diversity, equity and inclusion roles, Yusuf said. Whistleblowers have also come forward to reveal spending Yusuf deemed wasteful. They included council workers who told him that when their laptop screen broke, they were told to have it repaired, which cost double that of buying a new one. Contract competitiveness was highlighted by Yusuf as another area of concern. He said Reform's auditors were using artificial intelligence to comb through thousands of pages of successful tenders. Too often only one firm bids and therefore automatically wins the contract, providing little in the way of competition and value for money, he said. Terms can also last for more than 20 years. 'When Nasa awarded SpaceX its space exploration contract, that was six years because you want to create accountability,' Yusuf said. 'If you give someone a 25-year contract, there's no accountability. And then you wonder why our roads are so undriveable and potholes never get repaired.' While Yusuf admitted that some of the spending criticised by Reform's Doge team was 'relatively small' in the grand scheme of council budgets, he said it was still 'egregious' and had caused the social contract to start 'fraying at the edges'. A pothole-filling pilot scheme will be set up at several councils. Yusuf said contracted firms were often paid a day rate with 'no specific deadline' and used 'Iron Age' pickaxes that delayed completion. 'We're going to run pilots and demonstrate we can massively reduce the marginal cost of repairing potholes, and then provide that as a blueprint for everybody,' he said. Audits of council finances will be replicated at the national level if Reform wins the Welsh or Scottish parliament elections next year. 'We're going to bring that to every corridor of power that Reform wins,' Yusuf said. Reform has come under criticism from political rivals for the manner of its audits. Opponents have said Nigel Farage's party will have few areas to make cuts because many council spending commitments are based on statutory requirements to deliver services. There have also been two by-elections announced for Reform councillors elected in May, leading critics to claim they are a waste of taxpayers' money. After a return to Reform last week 48 hours after he resigned as chairman, Yusuf confirmed he was 'very open' to standing as an MP and said being in parliament 'allows you to have greater impact'. He left open the possibility of vying to be Farage's pick for a potential future chancellor and said he would 'leave such decisions to him'. Yusuf was unfazed by the fact that Reform raised less than the Conservatives, Labour and the Liberal Democrats in the first quarter of the year. He stressed that much of the party's income was from £25 membership fees and added about some perspective donors: 'Some of them are, I think, a bit deluded in thinking that the cadaver of the Conservative Party might somehow be resuscitated.' Some Tory MPs are in discussion with Reform about potentially defecting, Yusuf said, but he warned that their time was running out. He said the party would need some people with experience of working in government and taking on 'the blob' in Whitehall but 'the bar is extremely high … Why would we want a Johnny-come-lately in 2028-29 when we've got amazing people who are completely new to politics'. Kent county council was contacted for comment.
South China Morning Post
10-06-2025
- Politics
- South China Morning Post
Former residence of South Korea's Yoon under lawmakers' scrutiny over ‘pet pool'
A shallow pool inside South Korea 's presidential residence has sparked a debate among lawmakers over whether it was used by former president Yoon Suk-yeol and his wife for their pets. There has been increasing speculation that the pool was used for pets and not humans, said Representative Kim Byoung-joo at a meeting held on Monday by the Democratic Party, which became the country's ruling party following President Lee Jae-myung 's election win last week. 'I've looked around the space inside the official residence of the president, and a pool grabbed my attention,' said Kim, who visited the residence in the centre of Seoul along with other Democratic Party lawmakers on Saturday, according to a report by The Korea Herald. The pool appeared to have a length of five metres long, a width of two metres and a depth of 50cm at the shallow end. 'We should closely examine whether the Yoons installed facilities for personal use with taxpayers' money after moving into the official residence, where no one can monitor how the money is being spent,' Kim said. Protesters rallying against then-South Korean president Yoon Suk-yeol in Seoul last December following his failed martial law attempt. Photo: AP The lawmaker added that Yoon and his wife, Kim Keon-hee, were believed to also have a cat tower worth 5 million won (US$3,680).
Daily Mail
08-06-2025
- Business
- Daily Mail
EXCLUSIVE Government is 'blowing £270million a year on army of 6,500 spin doctors' instead of cutting public services
Labour is being urged to slash the 6,500-strong army of government spin doctors instead of cutting public services. New figures reveal that some Whitehall departments and quangos are employing more than 100 civil servants in press offices, marketing and social media. With an average salary of £41,800, it could mean the total annual bill for the 6,500 staff in the Government communication service is a staggering £271 million. And the costs to taxpayers of the state spin machine are set to rise further still as the Government is advertising a £1.7 billion contract for media and advertising. Last night, Shadow Cabinet Office minister Alex Burghart told the Mail: 'This is an absurd waste of taxpayers' money. 'They're growing an army of spin doctors to defend indefensible decisions, like snatching winter fuel payments from vulnerable pensioners.' The figures, which the Tories obtained under the Freedom of Information Act, show that NHS England had the most staff in communications roles, with 289 last year. Next is HM Revenue & Customs with 235. UK Research and Innovation had 191 communication workers last year. Labour sources insisted that the Government already has a target of reducing departmental administration costs by 15 per cent over the next five years. This is including communications teams, delivering savings of more than £2 billion a year by 2030 and targeting spending on frontline services. A Cabinet Office source said: 'These officials were nearly all recruited on the Tories' watch as they broke their promises over and over again by repeatedly increasing the size of the civil service.'
