a last throw of the dice

Columnist

Saturday 10 November 2012

The UK Government has cut the national debt at a stroke.

Custom byline text:

Tom Shields

It's thanks to quantitative easing. Also known as Senokot for sterling.

How did the Treasury treat this financial constipation? The Bank of England used newly-printed cash to buy up loads of government debt in the market as a means of boosting the economy. The Government pays interest on its debt. So there's £30bn worth of interest resting in an account at the bank HQ in Threadneedle Street.

But the Government actually owns this earned interest. Now Chancellor George Osborne is taking it back. (Not personally, as far as we know.) He can thereby claim the Coalition is £11bn a year closer to meeting its targets for cutting public borrowing. Just by transferring back the Government's own interest on its own Bank of England money used to buy its own debt.Sounds crazy but it's all approved by the Monopoly commission. The cash has already been handed over. Mostly in orange-coloured £500 notes. But also beige £100s, yellow tenners, and pink fivers.A source at the Treasury said: "It's been a get out of jail free card for the Chancellor. He wanted to raise even more cash by selling off the utility companies along with Fenchurch Street station and the other railway properties. But we had to explain that Mrs Thatcher already did that in the 1980s."There are plans to raid the Community Chest. A new card will read: "It's the Chancellor's birthday, all taxpayers hand over £1000."Pall Mall and Whitehall are going on the buy-to-let market. Planning regulations will be changed to allow the building of houses on top of hotels. The jail has been privatised. Another Olympics is being held next year down the Old Kent Road as a fillip to the economy.The Treasury asked Chancellor Osborne to change his Monopoly board token to a racing car to symbolise a fast-response fiscal policy. But he prefers to stick with the top hat.In other news on public spending, the Royal Navy is to be supplied with a new version of Battleship. The Department of Work and Pensions is to base its tougher benefits system on Snakes and Ladders. But with no ladders.The Treasury source added: "It's even worse over in the eurozone. It's Kerplunk and they're waiting for the last straw."

Contextual targeting label:

Finance

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

a last throw of the dice

Commenting & Moderation

MOST READ

SPONSORED LINKS

MOST COMMENTED