It is strange that the Bank of England has a Monetary Policy Committee yet  declines to set targets for money and credit expansion. It does not  normally comment on money and credit growth in its Reports, preferring to concentrate on past figures for GDP, inflation, estimated capacity utilisation and unemployment. Its forecasting record has been poor in recent years. It confidently expected inflation to stay down around 2% following its big monetary expansion and bond buying policy of 2020-21. It has only recently accepted inflation has greatly overshot its target and forecasts, waiting for the overshoot before admitting it. It now forecasts inflation to fall well below target in a couple of year’s time, yet still hiked interest rates higher as if it did not believe  its own forecast.

Whilst it is true that any given monetary measure may become distorted if it is a target or prime interest of a Central Bank, it is also true that if we look at any of the great inflations they have been accompanied or caused by excessive money and credit creation in their early stages. Given the Bank’s wish to interfere in the bond markets and to manage interest rates for various periods of borrowing from overnight to 50 years, you would have thought it would take an interest in how much money and credit is in circulation and in how far that might expand  given its actions. If inflation is agreed by the Bank to  be too much money chasing too few goods, they should not only study the too few goods (capacity) but also the too much money. Traditionally Central Banks have tried to control money and credit by moving interest rates, expecting commercial banks to lend less when rates are higher and lend more when rates are lower. More recently Central Banks have directly boosted money supply by creating bank reserves to buy up bonds. Much of this money initially found its way into asset prices, creating inflation in bonds, shares and property. More recently the inflation has spread into goods and services, as the money freed from the bonds has been spent.

The Bank should introduce some paragraphs in its commentary on rates of money and credit growth. They should explain why they think fast growth in these aggregates will not on that occasion produce inflation. Today they need to comment on whether there is enough money and credit around, given the slowdown and the dramatic change in money policy they have put the economy through.

Keeping inflation to 2% is a crucial role of the Bank of England, ECB and Fed. As events in the USA have just shown, it is however less important that avoiding banking collapse. Since Silicon Valley Bank got into trouble the Fed has made a huge change to its money policy, flipping from ultra tight with plenty of money withdrawal by selling bonds, to a large easing   with $300 bn of loans to commercial banks. It had to make the switch as it is the first duty of a Central Bank to provide cash to commercial banks so they can honour their deposits if a lot of people all want to withdraw at the same time.

The decision to shift to a much easier money policy in the short term was screened by still continuing with a 25 bp or 0.25% interest rate hike. The Fed wished to reassure some that it is still battling inflation, whilst reassuring others that their deposits are safe. Silicon Valley Bank had got into trouble because the Fed has raised rates so much, losing SVB money on the bonds it held. It is a reminder that shifting money policy to too tough brings different kinds of problems.

All the Central banks need to review where they are in money tightening and in bringing down inflation. There are always lags – it takes time to get inflation down by raising rates and throttling credit. It is important not to overdo the tightening as that can undermine banks as it  hits the affordability of credit and the value of bank investment holdings in bonds. They will all need to make sure plenty of cash is available to any bank that comes under unwelcome pressure to repay deposits, as that is the way to make sure there is no such run.

The government is currently concentrating on illegal migration with its eye catching and contentious promise by the Prime Minister to stop the boats that bring many of the illegal entrants to the UK. The Opposition parties oppose him strongly, demanding more safe routes for migrants and asylum seekers to come, and easier processes to allow people to enter more rapidly.

Most Conservatives believe the UK should provide refuge for some people fleeing violence or oppression elsewhere. This should be an offer as part of a wider offer by many richer countries to spread the  responsibility and to provide geographical choice to those seeking a new home. Many of us also believe the UK has been offering too many economic migrants a home and a job here, seeking to perpetuate a model of growing the economy by recruiting plenty of lower paid labour from abroad. Instead we would prefer to see investment in machines, computing, training and higher standards to get more of the work done with fewer better paid people. We want more better paid and high quality jobs for people already living here, backed  by the investment it takes to raise productivity and therefore wages.

The low pay model is not a great one for the people coming nor for the taxpayers who need to foot much of the bill for so called cheap labour. Paying people too little means state subsidy to provide them with housing, income top ups, health and education provision and a range of infrastructure and other public service provision. Last year we added 500,000 more people to our totals. To ensure they have a decent life that will take a lot of new housing, public sector facilities, roadspace, electricity and water capacity and a range of other capital intensive service provision. The EU some years ago suggested it took Euro 250,000 to provide for a migrant family or individual coming to the EU to provide all the facilities needed.

I have written to the Planning Inspectorate urging them to uphold West Berkshire Council’s decision to refuse planning permission to the erection of 32 houses on the land rear of The Hollies, Reading Road, Burghfield Common, West Berkshire RG7 3BH.

Please find attached below the Dear Colleague letter that I have received over tackling anti-social behaviour

Dear Colleague,
ANTI-SOCIAL BEHAVIOUR ACTION PLAN

Tackling anti-social behaviour is an absolute priority for this Government. Everyone has the right to live without fear of facing anti-social behaviour, to leave their home without fearing intimidation, to shop in a vibrant high street free from disorder and disrepair, and to use and enjoy their parks and community spaces. The public must trust that there will be action taken when they report the intimidation and harassment they face.

Today’s publication of the Anti-social Behaviour Action Plan reinforces the Government’s commitment to stamp out anti-social behaviour and restore the right of people to feel safe in, and proud of, their local area. The plan is an ambitious and wide-reaching new approach that will give Police and Crime Commissioners (PCC), local authorities, and other agencies the tools to tackle the blight of anti-social behaviour facing communities across England and Wales.

The plan sets out a radical new approach to tackling anti-social behaviour split across five key areas:
• Stronger punishment for perpetrators, cracking down on illegal drugs, evicting anti-social tenants and making perpetrators of anti-social behaviour repair the damage they inflicted on victims and communities;
• Making communities safer by increasing police presence, deploying tougher financial penalties for wrong doers, and keeping our streets orderly;
• Enhancing local pride by taking actions to revive high streets and revitalise parks and green spaces;
• Prevention and intervention through funding one million more hours of provision for young people, expanding the eligibility criteria for the Turnaround Programme,
focusing on targeted support for children most at risk and working with delivery partners on National Youth Guarantee; and
• Improving data, reporting and accountability by simplifying and improving existing reporting structures and increased accountability through better and more transparent data collection.

As part of the plan, we are funding immediate justice pilots and hotspot policing in a number of police force areas but the Action Plan makes clear they will be rolled out across England and Wales in 2024/25.

We are also launching today a targeted consultation which marks the first phase of the Community Safety Partnership review. The consultation will seek views on strengthening the accountability model of Community Safety Partnerships to align their work more closely to Police and Crime Commissioners, making sure they work together effectively to cut crime. Through the consultation, we are also seeking views on changes to the anti-social behaviour powers and tools to strengthen and broaden their use. The consultation will be published on gov.uk and will run for 8 weeks.

Tackling anti-social behaviour requires a strong and effective partnership response from all agencies working together and the measures we have outlined in the Anti-social Behaviour Action Plan give the police, local authorities and other agencies a wide range of powers and tools to deal with every situation of anti-social behaviour that may arise.

With every good wish,

Suella Braverman KC MP Michael Gove MP

Home Secretary Secretary of State for Levelling Up,
Housing and Communities & Minister for Intergovernmental Relations