New book! Available now!

 

This new book is now available as an e-book for Kindle.

In 2011, when I was in my late thirties, I wrote a book of short stories called They All Die At The End.

And, in 2013, when I was in my early forties, I was more optimistic -- if just as prone to giving away endings -- when I wrote another volume of short stories, this time called Everything Turns Out Just Fine.

It seems that, in my early fifties, I prefer more uncertainty, since my new book, published a few days ago, is called It Could Go Either Way.

Paperbacks

They are all available as paperbacks, if you prefer books in physical and tangible form:

• They All Die At The End
• Everything Turns Out Just Fine
• It Could Go Either Way

The first two are also available via Amazon (or any other retailer) but the new book is taking a little longer to work its way through the old-school distribution channels.

Ideal Gift

It's my birthday this weekend. As a gift to me (and to yourself), why not take the opportunity to buy a book or three?

All the stories are self-contained. (Well, that's not entirely true. Most of them are self-contained.) But the trilogy works best as a set. Just thought I should mention that.

And, if you'll forgive me repeating my previous post:

Book 1 -- They All Die At The End

Way back, in 2011, I wrote a book of ten short stories called They All Die At The End.

Many short-stories are constructed as set-up and punchline. And there's nothing wrong with that.

But my idea was to turn that on its head. Give away the ending (in the title of the book) but still write a gripping and involving story with a thing or two up its sleeve.

From this review:

...the point of view and narrative voice shift around between stories, which provides a nice variety, keeps the ‘joke’ fresh and prevents any ‘samieness’ from setting in. I’m impressed that the author found ten very different ways (from the sublime to the ridiculous) to kill off his characters but I was also  clearly aware that the stories are about much more than the endings and this is a valuable lesson to the reader (and aspiring writers). Don’t rush to the end point, savour the journey.  I’m not going to go into detail about any specific story because I don’t want to spoil the experience for the reader. I can’t pick out a favourite. I can tell you there are no turkeys.. each story is self contained while connected to and serving the aims of the whole and I for one was sorry when the final death occurred...

Book 2 -- Everything Turns Out Just Fine

Then, in 2013, partly in response to being asked why all my stories had to be so dark, I wrote another anthology to turn the previous one on its head.

Everything Turns Out Just Fine was part-funded by a successful Kickstarter project. The perks available to people chipping in included allowing them to name characters, suggest themes (such as a wedding) or give me a "now get out of that" opening, such as an embarrassment in Nepal.

And so these stories don't end in death, except when they do, and are significantly lighter, except when they aren't.

But why take my word for it when you can read someone else's words about it? From this review:

...it’s also just as fiercely unique as the previous one. A real treat ten times over all over again. Again, I can’t pick a favourite, I enjoy them all so much. Again, I see so much depth beneath the absurdist humour that pervades. Again he ‘dovetails’ characters and the ‘author’ intrudes into the last story. If you were ‘ticking boxes’ for the elements of great storytelling, Peter Tarnofsky ticks them all. And then adds that little bit of magic. He paints himself out of a corner time and time again to get to that unpredictably predictable ending. The characters he introduces you to all come to life before your eyes, even (sometimes especially) when set in the most incongruous and impossible of settings. He melds domestic reality with complete way out impossibility artlessly. And throughout, he keeps you guessing. You can believe everything he says and not believe any of it at all, at the same time. It’s fun. It’s thought provoking...

So what's this new book? And why now, after all this time?

About a year ago (true story), the piston in my chair began to fail. Sitting at my desk, I would find myself gradually sinking lower and lower until I (literally, not metaphorically) hit rock bottom.

And so I did what any decent writer would do. I took that as a starting point for a short story, not altogether sure what would happen next, or what I was actually writing it for.

The overall theme had been rattling around in my head for a while. Probably since 2013. What if I threw away my own concept of giving away the ending, thereby turning the themes of both books on their heads at the same time? It sounds uncomfortable.

In other words, what about writing a book called It Could Go Either Way in which, er, it could go... well, you get the general idea.

New book! Coming soon!

And here is a preview of the cover.

Although there's no guarantee it'll still be the cover by publication time. (Any thoughts, opinions or suggestions welcome).

A little context, history and flattery first.

Old book -- already available...

Way back, in 2011, I wrote a book of ten short stories called They All Die At The End.

Many short-stories are constructed as set-up and punchline. And there's nothing wrong with that.

But my idea was to turn that on its head. Give away the ending (in the title of the book) but still write a gripping and involving story with a thing or two up its sleeve.

From this review:

...the point of view and narrative voice shift around between stories, which provides a nice variety, keeps the ‘joke’ fresh and prevents any ‘samieness’ from setting in. I’m impressed that the author found ten very different ways (from the sublime to the ridiculous) to kill off his characters but I was also  clearly aware that the stories are about much more than the endings and this is a valuable lesson to the reader (and aspiring writers). Don’t rush to the end point, savour the journey.  I’m not going to go into detail about any specific story because I don’t want to spoil the experience for the reader. I can’t pick out a favourite. I can tell you there are no turkeys.. each story is self contained while connected to and serving the aims of the whole and I for one was sorry when the final death occurred...

Another old book -- also already available...

Then, in 2013, partly in response to being asked why all my stories had to be so dark, I wrote another anthology to turn the previous one on its head.

Everything Turns Out Just Fine was part-funded by a successful Kickstarter project. The perks available to people chipping in included allowing them to name characters, suggest themes (such as a wedding) or give me a "now get out of that" opening, such as an embarrassment in Nepal.

And so these stories don't end in death, except when they do, and are significantly lighter, except when they aren't.

But why take my word for it when you can read someone else's words about it? From this review:

...it’s also just as fiercely unique as the previous one. A real treat ten times over all over again. Again, I can’t pick a favourite, I enjoy them all so much. Again, I see so much depth beneath the absurdist humour that pervades. Again he ‘dovetails’ characters and the ‘author’ intrudes into the last story. If you were ‘ticking boxes’ for the elements of great storytelling, Peter Tarnofsky ticks them all. And then adds that little bit of magic. He paints himself out of a corner time and time again to get to that unpredictably predictable ending. The characters he introduces you to all come to life before your eyes, even (sometimes especially) when set in the most incongruous and impossible of settings. He melds domestic reality with complete way out impossibility artlessly. And throughout, he keeps you guessing. You can believe everything he says and not believe any of it at all, at the same time. It’s fun. It’s thought provoking...

So what's this new book? And why now, after all this time?

About a year ago (true story), the piston in my chair began to fail. Sitting at my desk, I would find myself gradually sinking lower and lower until I (literally, not metaphorically) hit rock bottom.

And so I did what any decent writer would do. I took that as a starting point for a short story, not altogether sure what would happen next, or what I was actually writing it for.

The overall theme had been rattling around in my head for a while. Probably since 2013. What if I threw away my own concept of giving away the ending, thereby turning the themes of both books on their heads at the same time? It sounds uncomfortable.

In other words, what about writing a book called It Could Go Either Way in which, er, it could go... well, you get the general idea.

It Could Go Either Way

I'm proof-reading it at the moment. Another ten stories with occasional nods to characters, situations or setups in the previous books.

You know how it is. You read it through, again and again. You ask other people to do the same. Take a pencil, make notes in the margins, find all the typing errors, grammatical errors, errors where you say the same thing twice, errors where you say the same thing twice, errors where you say the same thing twice, errors where you get the names of your own characters wrong, errors where your characters switch sides half-way through a conversation and errors where you've written a long paragraph that's basically just a list.

There will be a website for the new book shortly, at which point I'll link to it here.

In the meantime, here's the cover (again). This might not be the final one. Or it might. It could go either way.

The Money Flowed Like Water

The country needs water: fresh, clean, plentiful, safe water -- delivered to homes and businesses up and down the land for a fair price.

Private companies are required to act in the interests of their shareholders, to maximise the return on their investment using their skills and business acumen to cause the share price to rise and to generate enough profit for regular and sizeable dividends to be paid.

In a country where customers cannot pick their water company, and therefore competition cannot keep the worst excesses of sharp business practice in line, it is therefore vital for a regulator to ensure that water is delivered, bills are fair and profits are reasonable.

(Oh, and that investment is made in infrastructure, that sewage is dealt with appropriately, that leaks are repaired in a timely manner, and so on and so on.)

Because the private company would be required to charge as much as possible while doing as little as possible. It is for the regulator to determine how much is 'as much as possible' and how little is 'as little as possible'.

Ponzi

A Ponzi Scheme is one in which new investors' deposits are used to pay supposed profit share to previous investors. It's entirely dependent on a continuous (and accelerating) stream of new investors coming on board forever. Clearly that cannot happen and so, sometimes sooner than expected, the scheme runs out of suckers to draw in -- at which point it promptly collapses. Jail may then ensue.

Consider this business strategy:

• Acquire public infrastructure at attractive price.
• Borrow vast sums of money, secured against the value of the infrastructure and the certainty of receipts from captive customers.
• Pay dividends using the borrowed money.
• Enjoy higher share price due to the size of the dividends.
• Enjoy lower borrowing costs because of the higher share price.
• Borrow more money at attractive rates.
• Pay more dividends.
• Etc

The amount borrowed by the water companies is very similar to the amount that has been paid out in dividends. Close to nothing that was borrowed has been invested in the company.

If no dividends had been paid, the share price might have been lower. This might have made borrowing more expensive. But if no dividends had been paid, no borrowing would have been required. So the only advantage of the borrowing was to make the borrowing slightly cheaper than it would have been otherwise -- except that it probably wasn't needed anyway.

And the customers will be paying the interest on the borrowed money.

This is not a Ponzi Scheme but it has something in common with one. It is as though someone has manufactured a 'stable' version of the Ponzi scheme, with the executives and the shareholders as the original investors, continuously being fed 'profits' from everyone else.

Insult

And, as a wonderfully insulting flourish, now that the water companies have been found wanting, they have kindly agreed that investment will be made in the infrastructure.

And that investment will, of course, be entirely paid for by their customers.

It has to be -- the borrowed money has gone as dividends, it cannot be clawed back. The debt is still there as a huge drain on customers' money -- but that's okay because they will be paying it back through their bills, probably forever.

The one saving grace is that many of the shareholders are pension funds so some of this vast borrowed pseudo-profit will go towards paying out pensions. Unfortunately, many of those pension funds are based in foreign countries so that's not going to help the thoroughly victimised customers very much.

And, even if all the pension funds were British, would it be a clever idea to pay pensions based on overcharging the general public for their utilities? And via a circuitous route involving dividends, loans and interest charges? How much are the banks making out of these loans?

Illegality

As far as I'm aware, nothing even slightly illegal has occurred.

Private companies are expected to behave in a way that maximises their advantage while paying no regard to anything else.

The legal framework that set up this system, and the regulator who must have known what was occurring, are clearly not fit for purpose. But that's very different from finding out that laws were broken and that there was an obligation to make things right.

Solution (that won't happen)

• Change the law to vastly increase the responsibilities of the water companies.
• Increase the power of the regulator with a view to keeping prices very low indeed.
• Wait for the companies to go bankrupt and take everything back into public ownership at zero cost.
• If possible, get the loans written off when the companies go to the wall. Rather than venture capitalists and American pension funds now owning all our reservoirs and sewers.

We cannot comment on individual cases

How many times have you read that at the end of a news article?

The journalist has set out the details of the shoddy treatment experienced by someone, including background, detail and aftermath, together with interviews with all the key people involved.

Well, not quite all the key people involved because the ones responsible, the ones who (probably) caused this, the ones who could (probably) fix this, just say that...

We cannot comment on individual cases

We are all individual cases. What happens to us is an individual case. There's little point in proudly announcing that 95% of stuff is handled well if that means that a few thousand people every week are in the remaining 5%, the group that was done over, the group that cannot be helped, that cannot be commented on, whose difficulties will instead be inflicted on some other unlucky candidates next week.

Because if we are to learn anything, it is from the individual cases.

Why did it go wrong?

There are only three answers to this one:

1. It didn't go wrong. This is how it's supposed to work. Deal with it.
   
   
2. The process isn't supposed to happen like this. Someone made a mistake. We'll get them in for a chat and make sure it's put right for you and that this doesn't happen again.
   
   
3. The process is wrong, which means cases like yours end up like this when we follow the process.  It's not the fault of the person who did this for you. We'll change the process, then no one will experience this again.

So, if only you could comment on individual cases, you could tell us which of those three answers is the right one. And then you can take action:

1. Announce proudly that this is how it's supposed to work! Why wouldn't you be proud of it? If it doesn't need fixing and it's behaving as intended, then say it loud and say it proud. You can handle the nay-sayers, can't you? Because you know why this is the way it should work and you can easily defeat their petty arguments. (If you can't handle the nay-sayers, at least consider the possibility that this is not the correct answer this time.)
   
   
2. Our intentions were pure but the doofus who handled your case needs to be reeducated, if you know what I mean. Sorry for your trouble, have a boiled sweet and a sticker for your trouble.
   
   
3. Good lord, this process must have been designed by the previous administration. Looks like another one of their screw-ups fell through the net. But we know about it now so we'll put it right and bring it all up to snuff. Sorry for your trouble, have a boiled sweet and a sticker for your trouble.

See? It's not so hard. Once you accept that individual cases are just, you know, cases, then you can behave like a human being and actually say something meaningful.

For example?

Consider the German punk band, Trigger Cut, who were denied visas to perform in Britain in the last few days. No one really knows why because there was no official comment on this individual case. But what possible use is that?

1. If Trigger Cut got their application wrong, then tell us what they got wrong so that others don't fall into the same trap.
   
   
2. If the Border Force official got the process wrong, then apologise to Trigger Cut, try to make it good as best you can (maybe money?) and tell us that it was a mistake by an individual, who didn't understand the process that was supposed to be followed.
   
   
3. If the whole process is a complete mess and no one understands it, then fix it. Once you've done that, explain to us how it's supposed to work.

Instead, what we actually got from the government was (highlighting is mine, of course):

A government spokesman declined to answer questions about why Trigger Cut were refused entry to the UK.

They said: “Musicians and performers are a valued and important part of UK culture with the country attracting world class entertainers and musicians from around the globe. This is why we offer a dedicated immigration route for creative workers.

“All visa applications are carefully considered on their individual merits in accordance with the immigration rules. The application process is designed to ensure that all visa decisions can be made using the most accurate information and is fair for all applicants.”

At no point could it be argued that the government spokesman has explained any aspect of what went wrong in this case. And it might have been helpful if they had.

Another example?

Doctors' pensions -- this one has been rattling on for a while now, e.g. four years ago when half of doctors, apparently, were proposing to retire early as a result.

In a (non-financial-advisor approved) brief nutshell, changes in tax laws meant that senior doctors were hitting some tax/pension threshold that meant that vast sums of additional tax were being demanded from them. In some cases they would have been left earning almost nothing because so much of their income was disappearing in tax. Which would certainly make some people think early retirement would be a better option.

Now, it doesn't really matter what the exact details of this tax legislation mean -- which is fortunate because I have no intention of reading up on the detail. But we know, from many anecdotes in articles such as the one above, what the effect has been.

And, at this point, rather than declining to comment on individual cases, it would have been so much more helpful to pick one of the possible three answers:

1. This is a fair and equitable tax situation which is working as intended and which we do not plan to change.
   
   If you're picking this option -- well done! You're proudly sticking up for the skill of whoever wrote this tax law, together with the genius of the politicians who decided to implement it. Because if this is what you meant to do, why wouldn't you proudly say so?
   
   
2. This is an unintended consequence of trying to do something else. (What? Who knows? Ask a tax/pensions expert.) While the principle was sound, we've accidentally affected more people than intended and will be urgently redrafting the legislation and guidance to deal with this mistake. And, obviously, reimbursing anyone who faced a huge tax bill.
   
   It's a reasonable halfway-house answer. We had the right intentions, slipped up a bit with the execution, but, don't worry, trust us, we'll make it all right. Thanks for pointing it out to us...
   
   
3. I think this whole thing was crafted on a Friday afternoon when Geoff came back from the pub three (or more) sheets to the wind. Goodness only knows how it got so far and why no one spotted it earlier. But we're withdrawing it now, and promoting Geoff up a bit to where he can't do as much harm. And, obviously, reimbursing anyone who faced a huge tax bill.
   
   Maybe this is the truth at the heart of the crisis -- but we'll never know because a response like this would never come out. Instead, Geoff would get his promotion, the legislation would be polished up a bit at a totally different time, and some people might receive hints that there was an application form to reclaim unreasonably high pension/tax bills.
   
   

Overall

You've got to admit there is a problem before you can begin fixing it.

And the only way you can see problems is by looking at the individual cases and commenting on them. Otherwise, we're all just dots or ants -- because if you look at any person or people from far enough away, it becomes so much easier not to care.

Orson Welles explained it rather well -- not sure which of the four writers was responsible for the words: Graham Greene, Orson Welles, Alexander Korda and Carol Reed.

Alternatively, take the coward's way out. Refuse to comment, change the subject and say that everything you do is "using the most accurate information and is fair".

Inflation -- an opportunity to make money!

Returning to a subject I covered a few months ago (Clarkson's Hammer), let's look at what interest rate rises will mean for the average person.

And when I say "the average person", I am, of course, excluding anyone who does not pay rent or for a mortgage.

(I suspect that means I'm excluding the people who actually decided to raise interest rates, i.e. everyone on the Bank of England's monetary policy committee. Do feel free to contact me if that's incorrect. In the meantime I'll continue assuming that they know this will cause suffering for others and they're quite comfortable with doing it anyway.)

Keep it simple

Let's think about someone who has borrowed £100,000 on their mortgage. Last time they fixed their interest rate, it was 2%. So they were paying £2000 per year in interest charges.

And now they need to remortgage, in order to avoid the dreaded 'follow-on' rate. They can either take a tracker (about 5%) or a fixed-rate (about 6%). So they will now be paying either £5000 or £6000 per year in interest charges.

The difference is between £3000 and £4000. Let's call it £3500 per year.

This year, they will be paying an additional £3500 to their bank, for nothing.

Rentals?

Anyone who is renting will be paying a landlord who could well be the person who just had to remortgage at a higher rate and is now paying an additional £3500 to their bank for nothing.

So let's assume that the annual rent will go up by £3500 to cover it. Because it will, won't it?

And where does this money go?

It's curious how difficult it is to find an answer to this online. My assumptions (again, do write in if you know better) would be that the bank has to pay a bit extra to the Bank of England for being allowed to create this loan money out of thin air, but that they keep the rest.

So let's work on the assumption that some of the extra £3500 goes to the bank, and the rest goes to the Bank.

But why?

To cure inflation, of course. In order to cure inflation, demand must reduce, which means people have to be poorer, which forces shops, businesses, etc to reduce their prices to get their customers back. Or go bankrupt, whichever happens first.

Even if we accept that (which I don't), why does the money have to go to the bank? Why can't it be gathered up by the government in a good old tax rise? Why can't it be taken as a compulsory charity donation?

Or why can't it be not taken at all? Inflation will fall anyway once the energy prices peak and (whisper it) this round of inflation wasn't actually caused by people having too much money and frittering it away. It's a mixture of gas prices, shortages because of the war and a bit of old-fashioned profiteering from companies using the current state of the world as cover for hiking prices way beyond what's necessary to cover their increased costs.

Maybe if people weren't poorer and didn't cut back on their 'discretionary spending', fewer businesses would go bust and it would actually be better for the country and prevent a recession...

But what do I know? I'm not on the monetary policy committee.

And what can we do about it?

Nothing. Pay up or get repossessed/evicted. Maybe buy some shares in your bank so at least you get some of it back in a dividend payout. (This is NOT financial advice, in case you were wondering.)

When budgets meet reality

On the excellent podcast "The Rest Is Politics", presented by Alastair Campbell and Rory Stewart, last week, Rory suggested that the NHS couldn't be expected to pay for everything. Drug prices are rising, people are getting older, etc, etc. Efficiency savings are required, etc, etc.

But why, Rory, why? And what happens to the people who now won't be helped because the budget of the service isn't big enough to include them?

What Is A Budget?

A budget is a best guess of what will be required. (Other definitions are available).

Some budgets will be very educated guesses. Some, sadly, will not.

Some will be surprisingly accurate and some will be surprised by an unexpected event that makes all the effort that went into creating them an absolute waste of time.

But budgets are not reality and never will be.

If the task is to build a bridge and the budget contains insufficient material to actually reach across the gap, very few would begin construction while imploring the gap to make efficiency savings so that the planned bridge will actually reach the other side.

And if the task is to look after the healthcare needs of a nation, what then?

Endless Need

Drug prices are rising, average age is increasing, conditions are becoming more complex -- the need is endless and you simply can't expect a health service to cover everything.

Why not?

If people have a health condition that can and should be treated in order to remove injury, restore function, reduce risk of imminent death -- it would be beneficial to them and to society for this treatment to happen.

(Of course it's good for society -- better health means the person can work, pay tax, spend money on other businesses, interact with other people for the common good...)

If the health service won't pay for it -- because it's a "won't" not a "can't" -- then our hypothetical person has two options:

• suffer
• pay for it themselves

There simply aren't any other options. And a huge number of people can't afford to pay for it themselves and so they will suffer. And maybe die prematurely.

Pay For It Yourself

Let's just break this down a little, starting with an extreme example:

• very rare conditions that are expensive to treat

Well, if they're particularly rare then we're talking about a very small number of patients. So if we split the cost of whatever they need across the country (i.e. fund it through the health service, paid for by central government), it's actually a surprisingly small amount each for us to chip in.

The other option is that the person who picked up this condition in the lottery of health will have to pay an eye-watering amount of money in order to be looked after.

Whereas the person who (for want of a better example), broke his leg while skiing, requiring a long, complex and expensive operation to put the shattered bone back together, will pay nothing. And he chose to go skiing...

I'm not suggesting that those who have an accident doing something they love shouldn't be covered. I'm also not suggesting that those who find they have a rare and difficult condition should be left on their own.

At the other end of the scale, we have:

• extremely common conditions that are cheap to treat

Multiply the number of these by the lower cost for each and you could well end up with a far higher bill than for our 'very rare conditions' example above. But of course you'd cover these people -- there are so many of them that it would make no sense to exclude them, wouldn't it?

So if you're not trimming from either end, where will the axe fall? Somewhere in the middle? Thus leaving quite a lot of people with moderately expensive bills? Is that meant to be better?

And, while the drug bill for the health service might be startling:

• the health service will be getting a good price due to economy of scale
• and what's the alternative? (The answer you're looking for is 'suffering'.)

What Good Is A Budget?

So what good is your budget? Are you going to arbitrarily stop spending once you've hit this budget-number which was just a best guess made some time ago?

What will happen when reality meets fantasy (i.e. this budget)?

Do you start telling reality that it's wrong? Do you tell the patient to make efficiency savings in the severity of their condition?

Because there are only two options, ignoring the budget and doing what's needed, or abandoning someone at their time of need because an Excel spreadsheet thrown together the previous year says so.

A budget is a useful way of estimating what's going to be needed to get something done. It is a terrible way to decide when to stop doing what is needed.

Because if the bridge is worth building, then finish it. The valley isn't going to get any narrower to help you.

Heads You Lose, Tails... actually, we don't have a tails

The Great British Energy Price Off (Part... I dunno, I lost count some time ago)

For those concerned about escalating energy prices, whether the UK government's support package is sufficient and whether 'we' will be paying off this 'debt' for generations to come... here's something else to worry about.

Businesses.

Phew, you might think. I don't run a business. I'll cross that off my list of stuff that keeps me awake at night.

But do you ever buy anything from anyone? If so, increases in business expenses will have to be passed on to the customer. You do realise who that is, don't you?

It seems that energy companies might be massively profiteering from the 'differently' regulated tariffs for businesses. (I only said 'might' because I don't want to unfairly malign them here by jumping to conclusions. I'll leave you to jump to your own conclusions.)

Also, we're not talking about 'unworthy' businesses (whatever they are). No, the Chief Executive of Care England (which represents care homes amongst other things) has said “We believe there can be no justification for charging such horrendous and financially crippling rates."

The owners of care homes, together with the owners of pubs, restaurants and, presumably, many other businesses, are aggrieved that the wholesale price of gas has gone way, way down recently. But their bills are continuing to reach for the skies.

(Read the full story here.)

The key line I'd like to bring to your attention is this one:

"Suppliers have argued that uncertainty over the future price of gas and electricity has made determining the price of contracts difficult."

And this is the territory of 'heads you lose, tails... actually we don't have a tails'. Yes, I know I made that joke in the title. I thought you wouldn't mind a bit of recycling.

So businesses are being asked to pay far more than the current 'market' price at the moment, just in case the price goes up in a month or two (or six or twelve or twenty or whatever). Let's look at the options here:

• Right now, the energy company will be making a nice healthy profit as they're charging significantly more to supply the energy than it's costing them to acquire it.
• If the price does go up, the energy company will be fine (phew!) as they won't be stuck with having to supply at a loss (just have to put up with a smaller profit -- boo!)
• If the price instead goes down, it's bumper bonus for the energy company (double phew!) as now they're making an even bigger profit.
• If the price goes up even further than the energy company predicted, they might make a loss. But...
• (a) they've probably set the contract price so high that this is vanishingly unlikely (from the article -- "companies were being charged 25p to 40p per kilowatt hour, far higher than spot prices of about 3p")
• (b) by the time this vanishingly unlikely high wholesale price kicks in, they'll have made so much profit from their customers that this won't be an existential threat to their business anyway.

I'm going to assume that owners of care homes, pubs, restaurants, etc have thought of the following and that neither would work:

• Just move to another energy company. (Ha ha ha ha ha ha. Let's not kid ourselves that one of them is missing out on this feeding frenzy by trying to actually compete on price to gain customers.)
• Don't take a contract -- just buy at the 'spot' price (i.e. current variable rate). This isn't really an option because energy users can't buy from the generators and have to go through a (leach) energy supplier company.

Overall -- fake competition is driving up prices

Real competition between rival suppliers would drive down prices.

Fake competition between suppliers acting as though they were a cartel drives up prices to the highest possible point, then a little higher. Oh, and then higher again when it turns out they can get away with it. (Yes, I know they're not really a cartel but it sure looks, feels and acts like one.)

Where next?

The initial days of the energy crisis caught the smaller suppliers with their supply trousers down. They had agreed fixed price contracts with too many customers at prices that turned out to be unaffordable when the wholesale price rose.

Without some money in the bank to keep them going over this period, these small companies went backrupt, unable to fulfil their supply obligations. Any profit they had made previously had been safely tucked away as dividends, directors' pay, whatever -- and so the company ceased to exist, fell off its perch and the supply of all their customers had to be picked up by other, less bankrupt companies.

Interestingly, the cost of continuing to supply these customers at below market rate fell to the general public. Part of your higher bill is to subsidise those whose fixed price contracts bankrupted their supplier. Ah, you say, wouldn't it be fairer to claw back the profits those companies made in happier times since they should have prepared for this eventuality? Ah, you say, wouldn't it be easier just to bail out the company without driving it to bankruptcy? Yeah, neither of those was ever going to happen.

And now it's happy times for energy supply. Prices continue to go through the roof thanks to the 'free market' approach of ensuring the maximum price is charged at all times.

The customer doesn't see this though, thanks to the 'price cap'. This is a maximum amount that the energy suppliers can charge. Well, it's the most they can charge the customers. But they then work out the difference between that figure and what they wanted to charge the customers -- and they collect that from the government instead. (Bumper cash bonanza!)

Where does the government get that cash from? From you, of course. They've gone to the money markets, taken a massive loan in your name and will expect you to repay it over as long as it takes.

So where is the money going? Energy suppliers and banks.

And for what?

Trapped in a game of "Simon Says..."

So how's it all going?

Interest rates are going up.

Taxes are rising.

Prices are rising.

The school buildings aren't getting repaired.

The hospital roof is near collapsing.

And what have we got to show for it? Apparently, the markets are not as 'spooked' as they were and our grandchildren won't have to pay back our 'national debt'.

Yes, but what have we actually got to show for it?

Why are we so concerned not to spook the markets?

Which is better from the following two choices...?

• Economic collapse, mass unemployment, rising home repossessions and millions turning to foodbanks.
• Spooked markets.

Would you risk a bit of market spooking to avoid the first list? After all, what does a spooked market actually lead to? And why is it bad? And is it as bad as the first list of catastophes?

Because if a spooked market might lead to the first list of catastrophes, then isn't it a risk worth taking to avoid definitely causing all that pain and misery?

Simon Says

Otherwise, we're trapped in a game of "Simon Says...".

Anything that might 'spook' the market has to be avoided.

So the market says you've got to have austerity...

 -- great, let's cut everything to the bone, then start to starve people.

The market says interest rates have to go up...

-- fantastic, let's force businesses to go bust and people to lose their homes.

The market says we know best about pricing

-- brilliant, we're sure you won't engage in any price gouging.

Alternatively, we could actually try to repair the country and ignore the fact that 'Simon' is telling us to punch ourselves in the faces. Do you see 'Simon' punching himself in the face? Do you? As whatsisface said in Shrek over twenty years ago, "Some of you may die, but it's a sacrifice I am willing to make."

National Debt

This is an imaginary construct that has been around for hundreds of years. We owe it to ourselves because the government owns the Bank of England. It hasn't been repaid and probably never will be. Suggesting our grandchildren will be repaying it is an absolute pile of piffle.

Money

Because, after all, what is money? It's an imaginary construct too.

When the government wants to spend money, it does not have to raise tax to do so. It literally asks the Bank of England to create it from thin air.

In order to make sure we don't have too much money, which actually could lead to inflation, some of it is recalled and destroyed. This is known as tax. So the best way to reduce inflation is to increase tax because that will actually, literally, really take money out of the system.

When you go to the bank for a loan, they don't give you money that someone else has deposited. They literally create the money out of thin air. And, when you repay it, that money no longer exists. Ah, but the interest still exists -- and that's where the bank's profit comes. It has created something from nothing, and charged you for giving you the result of the magic trick. Must be nice, running a bank...

So, when interest rates go up, money is taken out of the system, sort of, except it isn't really. You're poorer and the bank has earned more money.

Effectively, it's like taxes have gone up except, rather than taking money out of the system to effectively counter inflation, money has been taken out of the wallets of 'normal' people and moved into the profits of banks, where it will potentially be moved off-shore in order to be tax efficient.

Overall

The government is using a variety of crises to pump up the profits of banks and multinationals, to downgrade the health and education services to encourage people to lose faith and pay for private treatment, and as an excuse to deregulate various industries in order to reduce the responsibilities of large companies to respect and look after the country in which we all live.

Have a nice weekend.

Compulsory gambling

Some people like to gamble. That's fair enough, as long as they're in control of their spending, not depriving family members of food money, not going into impossible debt, not having to turn to crime to support their habit. Actually, maybe I should go back on my assertion that it's fair enough.

However, many people don't like to gamble. They simply want to earn money and buy stuff for a fair price. But society doesn't seem to respect those people very much at the moment.

Energy prices, pension payments, mortgages -- they're all a bit of a gamble right now. You put in your stake and hope for the best. That woman over there got a great deal, that man waited another day and ended up paying twice as much for the same thing! Sucker!

Gambling is fine (within the limits badly explored in the first paragraph) as long as it's for fun (!) or fripperies or a new pair of shoes. But when it's for something that's vital -- like electricity or retirement income -- is it really something whose value should depend on the roll of the dice? A situation over which you have no control will have a potentially catastrophic life-changing impact -- does that sound like a sensible way to run anything at all?

Take pensions (as many scam artists are now doing). You pay money into the scheme every month and, when you retire, depending on how the stock market has been feeling recently, you may be either comfortable or a bit scared. (Never mind that the person managing the fund has done very nicely regardless of performance -- that's a complaint for another day.)

Pensions used to be a promise to continue paying a percentage of your final salary -- the risk was on the company, not on the individual. But we're all free marketeers now -- so we have to have the risk, not the company. (Was anyone consulted on this one?)

In France (apparently -- I've done minimal research), everyone's pensions are paid by the government (yes, out of taxation!), based on their earnings over their working life. Higher taxes, I hear you say. How awful, I hear you say. Yes -- but the British version is that what we don't pay in taxes, we instead pay to financial institutions in the hope of getting a decent pension out of them, but with no assurance of that. How does the extra tax compare to the pension contributions? Would you rather pay a bank a chunk of money in order to receive a pension of some (unknown) value? Or pay a bit more tax in return for confidence that your pension will be life-supporting?

Not that you have the choice. In Britain, you must gamble. (And the house always wins, as the cliche goes. No, not your house.)

Speaking of houses... Mortgage payments are linked to what the 'markets' think of the government, via 'confidence', inflation and whatever the Bank of England decides to set as the interest rate. In other words, it's a crap shoot. There is absolutely no link between the percentage cost of your loan and anything you have any control over whatsoever. Phyllis might buy a house this week and get a mortgage rate of 4.5% while Stanley might buy a house next week and get a mortgage rate of 6.3%. Why? Who does this serve?

In olden days, building societies would take deposits from some people, pay them interest on lending the money to the building society, then lend it out to others at a higher rate. And in that margin was their profit. If they didn't pay enough to investors, they wouldn't have the money to lend out. If they charged too much to borrowers, they wouldn't sell very many loans so their profit would drop. Simple but effective.

And what do we have now? Banks make money out of thin air when it's borrowed, pay a pittance to savers because they don't need their money and hike the interest rates on loans when the Bank of England tells them to jump. Because someone's shorted the pound or some other thing that has absolutely nothing whatsoever to do with your house, life or mortgage.

I realise that an economist with a good understanding of modern monetary theory could explain why the state of the gilt markets has a direct effect on the required interest rate on domestic mortgages.

Clearly, if you stand far enough away from the misery, you can say that the damage to individuals is irrelevant compared to the 'greater good' of the country, economy, party donors, whatever.

But it's very hard to stomach that some people must pay their banks more money for no reason other than that the Chancellor of the Exchequer made a series of very bad mistakes and some traders decided to enrich themselves as a result.

Reduce your electricity bill -- in three easy steps!

Follow this easy guide!

1. Find someone, preferably local, who fixed their electricity rate a while ago and who still has plenty of time left on their fixed-price contract.
   
   
2. Run an extension lead to their house, pop an electricity meter on the lead and connect that to your house's main circuit. (You may prefer to ask an electrician to do this.)
   
   
3. Tell your current supplier that you'll be getting your electricity elsewhere and ask them to disconnect you from the grid. (Otherwise you'll be paying the daily standing charge.)

Congratulations -- you just cut your electricity bill!

Now pay for the electricity that you use, direct to your neighbour, at the fixed-rate on their account. Also, pay half of their daily standing charge -- it's only fair.

The fact that this would theoretically work tells you all you need to know about how ridiculous the electricity supply game is in Britain.

The same electricity, travelling down the same cable from the same sub-station, fed from the same power line -- and yet charged at a dramatically different rate purely based on the random chance of whether and when the customer took out a fixed-price contract.

Alternatively...

If you don't like this approach, your best bet is to wait until the system is changed to one in which the country's electricity requirements are estimated, the electricity is bought and/or generated at a sensible price, the unit cost is calculated by dividing one by the other, and everyone is charged at that rate.

You'll probably be waiting a long time for that.

Because, while economy of scale is absolutely taken for granted in the corporate world, if you try doing that as a community of people, you'll be laughed out of town as a communist.

Irritate The Innocent, Ignore The Guilty

The Before Times

A few years ago, people using contactless cards at my local railway station could tap their card on a card-tapping machine. There were several of them, on many different walls. It was quick and easy.

Going in? Tap and beep. Person staring uncomprehendingly at one machine? Use the other one across the corridor, or a bit further up, or just over there. Tap and beep.

Going out? Tap and beep. Any machine. Doesn't matter. Just make sure you do the tap and hear the beep and it'll be all good.

Using a paper ticket? How very retro of you. On your way. Nothing to do except leave. Or enter. Depending on whether... well, you can work out the rest.

Then The Gates Came

The old tap and beep machines are still there but they are decommissioned and sad and turned off. They do not glow or beep, no matter how much you may tap them.

Instead, you must now use the gates, with a tapping pad on them and some of the slowest response of any machine in the twenty-first century. (There may be slight exaggeration in that sentence.)

The queues, or scrums, or disorderly gaggle fills the corridor and clogs the stairs as each person taps, waits for a beep, waits for the gates to heave themselves open.

Anyone rushing to get onto a train can forget about it. There are people waiting to tap and beep and they ain't clearing the corridor or stairs for anyone.

This does not seem like an improvement.

But The Revenue Is Protected (Oh No It Isn't)

No it really isn't. On any given day, you can watch a person or two or twelve tail-gate someone else through the gate, or just do a little hip-swivelling shimmy to nudge the gates apart enough to allow them to leave.

The dour-faced under-trained, high-vis-jacketed man stands and observes. No doubt intervention is above his pay grade.

The honest, upstanding, ticket buying member of society is delayed in a scrum of despond while the scallywagg fare evader is untroubled.

So the installation of gates has inconvenienced the innocent while making no difference to the guilty. I wonder how much they cost to bolt onto the floor, how much they cost to maintain, how much they cost to run (electricity is quite expensive right now, don't you know) and how much fare evasion they have prevented...

Other Gates

Last month, an Avanti train arrived at Oxenholme station (in the beautiful lake district) so late that the staff had locked the station and gone home. You can read the shocking story here. 

Some passengers climbed over the two-metre (spiked) gates in order to leave. The rest had to wait for the police to find a maintenance worker who had a key.

Given that the gates could be climbed by some (several? loads?) of passengers, and assuming that they weren't competitors returning from a parkour convention, I think it's reasonable to assume that the gates aren't that great at stopping able-bodied people from getting into or out of the station.

So anyone wishing to get up to mischief at that station could probably just climb in, using the assumption that railway mischief-makers are generally going to be able to climb. (You've only got to look at some of the astonishing places that railway graffiti ends up to realise that railway ruffians are good at scaling heights.)

Which means that these gates are also fairly pointless since all we're certain they've done is to imprison passengers for the 'crime' of travelling on a late train.

Money

Yes, it all comes back to money in the end.

Anti-money-laundering approaches are like railway gates. How many times must we jump through bankers' hoops to prove our identity so that they can know their customers?

And how many times does that stop people's accounts being drained by scammers? One approach, apparently, is to fool someone into moving funds into another (innocent but stupid) person's account, who is then instructed to move the money again, thereby fooling banks by the amazing process of moving money twice.

Don't the banks know the person in the middle? Because they know their customer, don't they? And wouldn't they know where the money was going to? Because they would know that customer as well, wouldn't they?

What's that you say? The money goes to a foreign account? Oh, that explains it then. Because all financial services outside the UK are completely unregulated and therefore it's impossible to ever, ever, ever track any money that's gone into that lawless realm. (I'm being sarcastic.)

So we, the innocent and the honest, wave our photocopied passports and paper utility bills (who has paper utility bills?) and receive one-time passcodes on our phones and are sent passwords in the mail and wait and wait and wait and wait.

While the dodgy dealers simply push through the bankers' useless gates or vault the financials' fence. While the data-protecting high-vis jacketed bank staff look on and say there's nothing they can do.

Call this a right-wing government?

 (For the avoidance of doubt, this is SATIRE. It does not reflect my actual views.)

Why won't the British government properly protect the interests of sensible, self-sufficient citizens?

Last year, having correctly predicted that energy prices were about to rise dramatically, I took the sensible precaution of arranging a fixed-price deal with my supplier that will protect me from price rises until September 2023.

This option was open to anyone in the UK but a startling number of people did not take it. Instead, they decided to chance their luck. And, boy, did their luck not hold out.

Still, that's what happens when important financial decisions have to made in the free market economy. Some people win and some people lose.

And we can't have the alternative. You know what that would mean:

• bulk buying for the whole nation to get economy of scale and equal pricing for all
• some people would be paying a tiny bit more and some people would be paying an awful lot less

Someone has to stand up for those who would be paying a tiny bit less. Like me. Because I'm smart and have a fixed-price deal.

But now the government is going to stab me in the back.

How dare they charge me to bail out the mistakes of others?

The government has introduced a price cap to protect people from ludicrously high bills. They are restricting the utility company's abilities to charge whatever they like for energy.

I don't need that. I protected myself.

This is going to be paid for through taxation and a levy on energy bills for many years to come. So I'm going to be forced to pay to bail out utility companies and people who didn't have the foresight to fix their energy prices.

The money to pay for this bailout is going to be borrowed from banks. Not the Bank of England (which the government owns), but other banks (which they don't). So interest charges will accrue.

The government is forcing me, through taxes and levies on my bills, to bail out utility companies, people who didn't think to fix their utility prices and, additionally, to pay interest to banks for a loan I neither want nor need.

I'm being ripped off

Imagine things the other way around. Imagine if I had fixed my energy prices at a high rate and then the cost of energy fell.

• Would the utility company help me with my bill?
• Would the government give me money towards my costs?
• Would other people be taxed to help me pay my bill?
• Would the government borrow from banks to help me pay my bill then pass on the interest charges to other member of the public?

I think we can agree the answer would be 'NO' to all of those questions. (Except, perhaps, the last because there's nothing governments like more than giving money to banks for almost no reason -- here's an example. Or if you prefer it phrased less respectfully, here's another.)

In this case, the utility company has made the mistake of agreeing to supply energy to me at a price that means they will make a loss. Well boo hoo. That's the free market for you.

They've also failed to arrange long-term sensible prices for buying the energy in for resale. That means they can only buy it at a price most of their customers can't afford. Which isn't going to be great for sales.

So they either have to expect to sell much less of it (and ride out the hideous consequences, both for their financial position and the cold population) or they sell at a loss and either have to dig into their reserves or declare bankruptcy.

How dare the government charge me to prop up the finances of a failing company? Let them go bankrupt so a proper capitalist can take them over and run them properly.

But if I'm expected to help them through these dark times, I want something more than just a bill for supporting them. I want shares in the company. Because otherwise I'm paying money into large corporations and getting nothing at all back for it.

And that is a rip off. Another example of large companies as benefit scroungers.

Emperor's New Elephant In Your Blindspot

( I couldn't pick a single cliché for my title.)

The world price of gas.

Let's just think about that for a moment. Wherever you are in the world, there is a price for gas. It's the world price. It's the price you must pay to buy gas.

(Yes, I know there are contracts and futures and spot prices and blah blah blah... but behind all that complication is the simple fact that it doesn't matter who you are or where you are, the price is the price is the price.)

And yet, the price of anything is only known when there is a sale. Until that point, all we have are bids and offers. Everyone knows this.

That house isn't 'worth' £1m because it's for sale and that's what the advertisement says. That's simply an indication of what the seller is hoping to get for the house. Similarly, if the buyer offers £900k, that doesn't mean the house is worth £100k less than the seller thought. When it sells at £925k, that doesn't mean the correct price was £925k and thank goodness we discovered it, phew, etc. It just means that the seller and buyer reached an agreement that they could accept that monetary value for that house between them on that day.

So what's the world price of gas? And why is it currently so high?

It's only high because buyers are buying it at a high price. If they weren't, that wouldn't be the price, no matter what the sellers might want, any more than the price of that house was £1m when no one was buying it for that.

So why aren't the buyers offering less?

Free markets

As touched on previously on this blog, free market ideology has a tendency to favour the freedom of rich people to get richer. By doing things like accepting very high prices when buying gas.

How about the freedom of the buyers to get together and agree that they won't bid each other up to crazy rates? Are they not free to do that? Why not?

The sellers are all operating through the 'world price of gas' which serves to inflate the price. How would it be wrong for the buyers to operate through the 'world buyers of gas' (which sadly doesn't exist) which considers the costs of exploration, extraction, transportation and dividends to shareholders and then offers a fair price?

The fossil fuel companies are smaller than the world

As ridiculous a heading as that clearly was, it seems that some people don't realise it.

The fossil fuel companies consist of a tiny number of people who are very good at obtaining a substance and selling it. But if their mechanism for selling it will lead to their amassing vast wealth while impoverishing huge number of others, it might be worth considering that they are dependent on the rest of the planet's people. And that they should be happy with lots of wealth rather than aiming for vast wealth.

Because, let's face it, the fossil fuel companies weren't exactly destitute last year (or the year before for that matter). Last year's profits were pretty good.

And this year's are going to be stratospheric -- but only because we are paying their crazy rates.

All it needs is for enough of the gas buyers in the world to say the prices are ridiculous and to offer less. And to stop bidding against each other. And to deal with any shortage themselves rather than letting the market decide by selling everything at such a high rate that demand drops to meet supply.

There's another way for demand to drop to meet supply -- international agreements. And that route doesn't lead to economic collapse. Sure, a few countries will break ranks and offer more money and get more gas. But so what? As long as enough big customers can stand firm, the price will drop.

And the fossil fuel companies will still do very nicely. And economies won't collapse. And everything will certainly be a lot better than keeping the current arrangement.

Alternatively...

Carry on. But what happens next year when the price is even higher? After all, they know we'll roll over and pay this year's crazy prices.

So why not try for even more next year? Why wouldn't they?

Face down the bullies now. It'll only get harder the longer you leave it.

Economics for rich people - a brief guide (part one)

If in doubt, ignore rich people. Don't try to placate them, control them or even offer the gentlest of nudge. They'll circumvent, waste your time and tie you up in knots. So just ignore them and decide what's best for the majority.

But, on the odd occasion when that doesn't work, here are some helpful pointers.

Inflation or recession?

Easy -- rich people prefer recessions.

Inflation erodes the values of savings (which rich people have, do try to keep up).

Recession makes poor people unemployed and destroys a few businesses that rich people probably don't use.

Government spending

Just roads, thanks. (Maybe a few police but not too many.)

Rich people have got health-care, education and security. They're not top users of public transport. Libraries -- don't be silly.

But they do have to drive on the same roads as everyone else.

Benefits

Rich people, of course, are frequently utterly dependent on benefits.

Because many businesses pay their employees too little to live on. The state has to step in with benefits so that these employees can actually afford to take those jobs.

Are the employees really the recipients of the benefits? Or is it the company (and its owners) that stand to gain as a result?

Without companies having ready access to this state support, there might be proper competition in the job market. Companies that actually were economically viable would pay decent wages and employees would gravitate there. Companies that didn't pay enough wouldn't have staff and so would have to offer a better deal.

This will be a sticky one to unpick.

How did we get here, where deadbeat employers don't pay their staff enough to live on so that state has to make up the difference?

Could it be that (whisper it) the minimum wage is actually too low if it isn't enough to live on?

Isn't it extraordinary that the question even needs to be asked?

But it really needs reframing. The government is paying benefits to enable economically unviable companies to make a profit. The companies are benefit scroungers.

How about starting with a little shaming -- companies list number of employees and number dependent on in-work benefits.

Any company with more than, say, 10% of their employees requiring benefits is classified as a scrounger and gets to pay more business rates.

(Never going to happen.)

You're welcome

Further installments of this series will be along from time to time.

Guaranteed effective -- or your money back!

Economics -- what actually is it?

An attempt to model the big, hairy world of finance and business using a mixture of gross simplifications and guesswork?

As useful to the way the world works as astrology is to astronomy?

Regardless of the situation, there's normally an economist to argue convincingly for one solution, another to argue for the opposite and a third to explain why they're both wrong.

And yet here we are. The Bank of England's economists have told us that we must all pay more money to the banks in order to prevent inflation. (See previous post.)

Error 1 -- inflation follows wage increases

This is the reason given by Andrew Bailey at the Bank of England (salary estimated to be somewhere over £500,000) why wages must not go up because otherwise there will be inflation.

This seems plausible. After all, if businesses think you've got some extra money they're going to try to grab it by hiking their prices. And what does a price hike mean? Yes, it's inflation if it happens in too many places at the same time.

But there's a flaw in the reasoning, Andrew, isn't there? We currently have inflation and the vast majority of people in the UK have had no (meaningful) pay rise in a very long time.

So what you're saying is that we shouldn't have the bad inflation where people can continue to afford to buy stuff. Instead we should have the good inflation in which people go hungry. Thanks, Andrew!

Error 2 -- interest rate rises are necessary to tackle inflation

The argument that people need to be poorer, by being ordered to give more of their money to banks, in order to reduce demand in the market in order to force prices down in order to reduce inflation doesn't stand up to the slightest breeze.

Even if you accept the idea that demand must drop to beat inflation and so people need to have less money for discretionary spending, interest rate rises are the actions of a sadist on a suffering population.

Because people are already poorer. The cost of living has already risen catastrophically.

The ludicrous rise in energy prices (in which we are forced to give vast profits to fossil fuel companies for no reason), coupled with rampant profiteering from other companies using the energy crisis as a smokescreen, means that people have less money to spend. Demand will drop anyway.

The rise in energy prices was like being mugged by the fossil fuel companies. But the interest rate rise is being kicked by your own government when you're lying on the ground after the mugging, then them stealing your shoes.

Error 3 -- interest rate rises are necessary to preserve the value of the pound

Interest rates have just gone up.

The pound has just fallen to its lowest level against the dollar since March 2020.

I don't think we need to go any further with this one.

It's all gambling anyway

The Bank of England is gambling that the economy can be saved by pouring money from the population into the banks. To match the money being poured into the fossil fuel companies.

With the political will, we can fix the fossil fuel problem. (Obviously we'd need a functioning government that actually wanted to help, but that's a different problem.)

But the interest rate rise requires a different approach. How about the Bank of England actually cuts us in on their wager?

Rather than forcing the population to give the banks bigger profits, how about putting the extra money they're draining from people into special ring-fenced accounts?

If inflation then goes down, and the Bank of England can prove that interest rate rises helped, that money can go on its merry way to whichever bankers' yacht it would have gone to anyway.

And if it doesn't, then the banks can give it all back. With interest (preferably at the new higher rate, just before it's scrapped).

But how can they prove it?

Yes -- my suggestion is based on the idea that the Bank of England might be able to prove that the rise in interest rates reduced inflation.

How can they prove it? Good question -- I don't know.

But if they can't come up with decent proof, then what on earth makes them think there's any link between the two things? Surely they wouldn't inflict economic catastrophe on so many people without a good body of evidence? In which case, they can show it off and the money can be kept in the banking sector.

By the way, 'proof' does not mean that they put up interest rates and inflation then fell. That's just two things happening. We need proof that one caused the other.

If you're happy with the idea that one thing happened after another means that the first thing caused the second, then I'm going to tell you that the sun only rose this morning because I did a little dance in the garden just before sunrise. And unless you pay me a squillion pounds, I won't do the dance tomorrow and the sun won't rise. Are you prepared to take that risk?

Is the Bank of England prepared to take the risk that people might get a refund of their extra interest charges? If not, it means they're not confident it will work -- in which case how about not doing it at all?

If so, bring it on! Come on Andrew -- roll the dice and see if you get lucky.