Black Wednesday 2022 – not to be confused with Black Wednesday 1992

Though both occurred under Tory Government. [1992 is when we were forced out of the ERM]

Since the “fiscal event”, without any figures to back its credibility, was announced last week we have had a currency crash, veiled criticism from the IMF to row back, followed by bond rate surges yesterday that threatened to bankrupt our pensions funds. The Bank’s of England’s emergency action, effectively printing money, will now add to inflation.

Now pick up form this extract from

“It is at this point, one hopes, that reality dawns on Tory MPs that the current crisis has very little to do with a strong dollar or global forces, or any of the other excuses that have been trotted out in recent days. The Bank had to intervene to save the government from the consequences of its own actions.

While forced selling by pension funds intensified the action, the deeper turmoil comes by markets’ brutal verdict on Liz Truss and Kwarteng’s £45bn package of tax cuts. It was investors – not the International Monetary Fund, say – who first judged that the chancellor’s plan is no way to manage the public finances when you are borrowing potentially huge sums to underwrite a blank-cheque guarantee on household energy bills for two years.

The supposed prize – an improvement to 2.5% in the UK’s growth rate – is years away, if it arrives at all. Meanwhile, inflation is 9.9% and the current account deficit, at 8%, is wide. Investors may tolerate a few economic unorthodoxies, but they’ll demand stiff terms to fund an economic gamble that simply looks reckless. That is the source of the surge in gilt yields. It flows from Downing Street.

So, too, does the incidental damage to the Bank’s own credibility, Only last week it was planning to sell gilts into the market – not buy them – under its quantitative tightening programme (or QT, the reversal of the easing programme of the last decade). Now QT has been delayed until the end of next month, which feels like a hope rather than an expectation. The Bank had no real choice in the matter, but confusion is unmistakable.

Meanwhile, dysfunction continues in the mortgage market as lenders yank fixed-interest offers. That part of the tale should also sound alarm bells on the backbenches. Panic over mortgage costs is now water-cooler and pub talk.

The way out of the mess must involve U-turns. Even after the Bank’s temporary yield-suppression operation, Kwarteng’s programme looks unaffordable. The size of the borrowing coming down the track is too large, and the risks to households’ and businesses’ borrowing costs are too great. Kwarteng pitched his plans as a way to avoid a deep recession, but the market’s reaction to his fiscal pyrotechnics has created the risk of a deeper one.

A couple of contenders for U-turns can be read from the IMF’s withering assessment. A minor tweak would reinstate the 45p income tax rate for high-earners as a signal of prudence. A bigger move would trim the energy support programme to six months and introduce a targeted scheme thereafter.

But if Kwarteng is determined to charge down his original track (he seems to be), he should hammer down his new fiscal rules and announce them soon. 23 November, the intended date, is too far away. The same goes for the Office for Budget Responsibility’s assessment of the state of the public finances. Let the budgetary watchdog bark.

A more dramatic U-turn lies in the hands of those same Tory MPs who must digest two hard facts. In the space of four trading days, a Tory “fiscal event” has led to a major intervention by the central bank to avert a “material risk” to financial stability and a run on pension funds. And none of this would have happened if Rishi Sunak had won the leadership contest. Kwarteng, surely, cannot survive another day like Wednesday.”

Right now it appears that Truss and Kwarteng are intent on “doubling down” by finding cuts in government spending including from benefits payments and state pension inflation upgrades.

In other words benefit claimants and pensioners are going to be expected tp pay for the reduction of top rate tax from 45% to 40%.

This is not what the IMF expects. There will be more fireworks.

EDDC vote to conduct independent investigation into jailed paedophile Humphreys

A quick impression of last night’s extraordinary consultative meeting.

Back in April the council voted unanimously, with one abstention, to conduct an investigation into how Humphreys continued in his council roles, with access to children, and then became an honorary Alderman after his arrest. 

The Chief Executive, Mark Williams, was asked to advise how this could be done. So it may surprise readers to know that five months later the Council met again last night to vote on whether or not to conduct an investigation.

In the interim, Mark Williams had decided to advise the council against taking any such action because, in his opinion, all that was to be known was known and such an exercise would be a waste of taxpayers money. Just how Mark Williams can make such a categorical statement hasn’t been revealed. He kept repeating the mantra that the council must be “Fact specific”.

This “foot dragging” led Cllr Jess Bailey to take the unusual step of raising a ”requisition order” to appoint, after research, a specific independent investigation organisation, Verita, to conduct one (referred to as Option A). For a requisition order to be put to the vote it has to be supported by nine councillors. 

Her move prompted Mark Williams to come up with an alternative (Option B) which would involve commissioning a legal practice to undertake the investigation. However, his first recommendation to the council was to drop the notion of conducting an investigation, but if the council rejected this advice then it should consider his Option B as an alternative to Option A.

After debate, the council voted to conduct an independent investigation by 27 votes to 9 with 5 abstensions. There were quite a few apologies.

The council then turned its attention to the two options put before it.

During this, in what seemed a surprising move to Owl, the Chief Executive started to sow confusion by spewing out other options such as conducting an external audit or even getting asking the Secretary of State to conduct a review through a process whereby the council reported itself for misconduct!

During discussion yet more options emerged such as using Ofsted, the option recently adopted by Devon County Council. 

When put to the vote Council members voted:

22 votes to choose Option A, zero votes for Option B with 18 abstentions.

So the option concocted by the Chief Executive was completely rejected. 

Owl was left with the overwhelming impression that the council has been badly let down by Mark Williams, Chief Executive.

In April he was asked to advise how an independent investigation could be conducted. This was the moment when he could have come up with the idea, that Devon County Council came up with a couple of weeks ago, of using Ofsted or indeed any of the other options he suddenly threw into the pot last night. But he didn’t, he left a void and failed to give any constructive advice other than an investigation is unnecessary and a waste of money.

We know the debate was watched by one of the victims. He very courageously gave an introductory speech as a member of the public. Special arrangements had been made so that he could do this anonymously. He spoke about how his life had been wrecked, how important it was for his rehabilitation to be heard and how an investigation would help him.

As Cllr Eleanor Rylance put it: Humphreys weaponised his role as a councillor, later an Alderman, to elevate his status in society to put him into a position of being beyond reproach. He used it to intimidate his victims.

Some councillors were close to tears whilst making their contributions during debate. But, watching the debate, the victim may have been left with the impression that a significant “establishment” barrier lurks in the background.