Taking Back the Bank

When the Bank of England was made 'independent' in the New Dawn, Brown and Balls tried to limit the loss of power to the Treasury by all and any means - the most notorious was the hiving-off of financial regulation to the FSA although the research and expertise needed to supervise financial activity was in the Bank. Just as importantly, reserve powers were secured in the Act to take back the conduct of monetary policy and set interest rates.

Brown cannot implement the cuts to spending and raise taxes to the levels needed to deal with government debt for obvious political reasons. His client state, his power base, he himself, would be lost.

The debt is to be inflated away and for that Brown needs to break every rule in the book, for though the UK may not use the Euro (oh Five Tests of yesteryear, where are you now?) it is as constrained by EU rules, no matter how relaxed during this recession, as any other Member State. And to break the rules he needs Balls at the Treasury. They set their false bank independence up and left an escape hatch. Darling has to go so that they can use it.