Mr Farage goes to Threadneedle Street

Here’s how the Telegraph reported on Britain’s insurgent Reform party’s tax-cutting plans, which it has been confirmed at an event today:

Reform will claim the cuts could be funded by scrapping a little known scheme whereby lenders receive interest payments on reserves – piles of cash – they have to hold at the Bank of England.

These reserves, which amount to more than £700 billion, came about mainly as a result of the Bank’s quantitative easing programme. Under QE, new money was conjured out of thin air in order to shore up the financial system following the 2008 credit crisis.

The scheme will of course not be “little known” to anyone who’s paid even a modicum of attention to the UK’s macroeconomic framework for the past 16 years.

Oh right, yeah, sorry, maybe “little known” is fair enough.

A no-holds-barred raid on interest of BoE reserves is absolutely ideal territory for populist policy: the numbers are stunningly big, the details stunningly boring.

Nigel Farage, who took political control of the party he owns last week, made this pretty much explicit on Sunday, telling the BBC:

The Bank of England is paying vast amounts of interest on their QE
borrowing. Yes, I know it’s very technical. I’m doing a press conference in which I’ll lay out how we can save £35 billion before we even start.

Yes, it’s very technical, don’t worry your pretty little baby heads about how we’re going to get £35bn with zero consequences.

We’ve given Toby Nangle a tub of ProPlus and some full-fat Coke, so he’ll drop a more cerebral take at some point soon (you can already look to Paul Tucker, the NEF or Chris Giles for some views), but let’s get one thing straight: the political/media communication discourse around this is going to be incredibly cursed.

Hell, it already is. From a Reform press release on chair Richard Tice’s speech this morning (h/t to Reuters’ Andy Bruce)

This is going to absolutely suck. We can’t wait.