It is fashionable amongst the political parties and some football fans to demand a Statutory “independent” football regulator. Some fans support such a change as they are critical of some club owners or managements   and think a Regulator  might be able to sort things out for them .

I fear the prospect of an all wise Regulator who would just happen to bring about change in each club that fans would like  is a good dream, but difficult for any appointed Regulator to achieve.A Regulator faces very difficult pressures when Team A claims rival Team B has broken rules and then Team B responds with a counter claim. The more rules there are, the more disputes. Where two or more teams are in dispute any verdict will upset a lot of fans.

Football is a popular sport. It is entertainment. It attracts a large number of rich individuals and some companies that like the game and want to spend their money on trying to build a winning team. Some do make more money out of it by succeeding in getting their team promoted and so generating more revenues. Some make money out of associated property development and retail opportunities using the club assets and brand. Many just spend their money on the costly hunt to transfer talent and then pay mega salaries to retain good people which can  end in financial losses.

The FA is the regulator. They believe there needs to be rules over how much money a club can spend and borrow and rules over how clubs attract and retain talent. There obviously have to be game rules all accept, and rules over how you win or lose in league and cup competitions. It is difficult to see how an independent regulator could usefully change FA rules over most of these matters. The FA itself is discovering that its efforts to regulate club finances using penalties that include reducing a teams points in the league can upset fans and make rivalries more bitter. What is best settled on the pitch ends up being settled by lawyers.

If we do set up an independent Regulator under Statute law there will then be a wish to drag Ministers into decisions. When too many fans become critical of the Regulator the cry will go up for Ministerial interference or for some change of the law.

There is a good case for an element of fan ownership or for clubs  to be established as trusts owned by fans. This would need to be arrived at with agreement or from buy out of the existing owners.  All the time the football model is based on bidding ever higher sums for a small pool of well known players and managers clubs will turn instead to billionaires to help fund their expensive habits.Fans will not have sufficient collective money to pay the sky high prices of the famous.  They then have to live with  that relationship.The   rich shareholder  is well advised to keep on the right side of the fans. The fans offer the team support, pay  high prices for tickets and buy the merchandise.   I do not think politicians should tell football clubs and the FA how to finance themselves. There must be no question of taxpayers bailing out clubs.

Please find below my interview with GB News on the Bank of England’s losses:

Yesterday I criticised 3 big boom/ bust cycles that came from Bank action and establishment thinking. In each case they ignored money and credit.

The 1975 inflation high peak followed a doubling of broad money 1970-4 as a result of a badly supervised switch to competition and credit control policy by the Bank.

The 1992 inflation followed a 36% surge in broad  money 1989-92, brought on by the dangerous  European Exchange rate mechanism. IMF figures clocked broad money growth peaking  at 86% when the Bank and Treasury were creating billions of pounds  to try to keep the value  of the pound down to the permitted target. They then saw it plunge to a low of minus 28% when the Bank was busily buying in pounds trying to get the value back up to the target after the inflation sank the currency.

The 2008-9 banking boom followed and created a 66% surge in broad money Q1 2009 compared to Q 12005. Over the Labour years 1997 to 2010 money growth trebled.

The more recent inflation followed 30% money growth 2020 to 2023.

I set out the case against the European Exchange Rate Mechanism before we entered. I urged the government to turn down the Bank and Treasury advice. I explained it could lead  to  excessive money or too little. It led to both. I took the quoted company I led  out of the CBI because the CBI refused to accept ERM membership would be damaging.

In the run up to the crash of 2009 I supported the Opposition in Parliament who regularly  warned of excessive credit expansion and government overborrowing.

This time round I warned against the continuation of QE during 2021-2 as inflationary. More recently I switched to warning against excessive bond sales as recessionary.

Why do the Bank and Treasury persist with boom/ bust policies?

President Biden changed US policy towards the Middle East in 2020. He pulled out of Afghanistan too suddenly, losing a crucial air base and undermining  his allies. It led directly  to the Taliban taking the country over, after 20 years of the west losing lives and spending huge sums to stop them. He then tried to get a negotiated settlement with Iran. President Trump had negotiated successfully with the Gulf states to achieve their peace with Israel and to try to do the same with Saudi. All agreed Iran was a threat.

President Biden has ended up with worse relations with Saudi and the Gulf states, with OPEC pushing up oil prices by witholding production and now with US forces shooting down Iranian drones and missiles. Iran was always constructing a ring of hostile forces to the west with the Houttis in Yemen now firing on civilian cargo ships, with Hezbollah in Lebanon , Iraq and Syria and Hamas in Gaza.

The UK needs to be super vigilant to stop terrorists gaining access, to continue to work closely with allies to ensure good intelligence

The political classes seem incapable of understanding why we have so many boom bust inflationary cycles. I want more MPs to be demanding a change of policy by the Bank so we can have a growth policy with lower tax rates and better funded core public services.

It is no accident or external force which gave us an inflation in 1975. It was the  Bank conducting a policy called competition and credit control badly leading to fast money growth and a secondary banking crisis. In 1977 it was an overspending over borrowing Labour government which ended with a humiliating trip to the IMF to bail us out.

In 1990-92 it was Bank and Treasury policy to put us into the European Exchange rate mechanism which ballooned the money supply backed by PM Major and gave us more inflation.

In 2007-9 it was Bank and Labour government policy to allow commercial banks to lend much more which led to inflation, egged on by high public spending and borrowing.

In 2023-4 the inflation came from Bank Quantitative easing and a big boost to the money supply.

In each case the Bank over corrected  for its errors pushing us into recession.

Why doesn’t the Bank learn from  this string of errors and give better advice?

Let’s start with some agreement. I agree the Bank needs to improve its forecasting and the  communication of its findings.

I do not agree that all Central Banks made worse forecasts over covid and Ukraine. Mr Bernanke seems to ignore China, Japan and Switzerland who kept inflation down despite the swings of oil and food prices. Their forecasts remained nearer the mark.

I do not agree that more highly paid people and more spending will provide the answer. The Bank has a lot of intelligent well qualified people. They need to correct their errors and change their thinking. The models need improving, but they have the people to do that.

It would be a good idea for the Monetary Policy Committee to look at the quantity of money being created and the velocity of circulation, and to provide comment, if only to say they have a good reasons to think creating lots of money will not be inflationary or destroying lots of money will not be recessionary so others can challenge this. Those outside the Bank that did look at the ballooning of the Bank balance sheet and money supply and warned it could prove inflationary got the forecast right even if the Bank is still sure they got the reason wrong. It would be better to have this argument around the MPC table. Why did the MPC who think inflation comes from other sources not manage to predict what happened? The MPC itself needs greater diversity of economic thought. Having someone on it who got the inflation outlook right in recent years would be a good start.

It is also a big disappointment that Mr Bernanke did not consider the impact of the waxing and waning balance sheet of the Bank. Decisions about the bond buying and selling need careful consideration as well as the interest rates. Their strong connection to public finances is also important for their impact on the economy.

The UK public sector is letting many people down and upsetting a lot of voters. Opposition parties in Parliament are good at criticising. They blame Ministers, as our system invites them to do. Opposition parties fail to ask why so many of the failures are in so called independent bodies with highly paid public sector chiefs paid many times a Minister. They  claim just small extra sums – compared to the huge extra  sums this government has tipped in – would make all the difference.

If only. If extra money would bring the NHS  waiting  lists down or would fix the Post Office and the railway things should be improving well by now. Ministers have tried this. Any Conservative MP will vote for a few extra billions of spending if it could deliver the end of waiting lists, good border control or a new railway line on time and to budget. We have often so voted.

It is a crucial part of our Parliamentary democracy that we do ultimately  hold government Ministers to blame for the many failings of public services and public bodies. We also expect government to intervene or to change the law when the private sector and or too many individuals miscarry.

I still believe  in that system. I fully understand why government gets the blame when inflation goes too high, but note that an independent Bank of England is responsible for inflation and brought high inflation on. There are so many areas now where government is blamed but in practice the decisions and budgets rest with independent bodies, or where national and international law and judges prevent Ministers carrying out what they want to do. There are even cases where Ministers change the law but are still thwarted by activist courts.

I will explore how far this removal of power has gone, how many of the independent bodies are behaving badly or incompetently, and how courts and treaties prevent Ministers implementing  the public will. As many blame Ministers, Ministers need to take back powers to solve the problems the current system fails to resolve or make worse. The doctrine of independent bodies is doing plenty of damage, from the Post Office to the railways, from Ofwat to the Bank of England. The EHCR stops us controlling our borders  and the WHO which had a bad covid pandemic wants more powers to control the NHS.

In July 2022 the UK ten year interest rate was 2%. In early September it was 3% and by the time of the Kwarteng budget on 23rd September it was approaching 4%. It peaked on 9th October at 4.38%. In July 2023 it made another new peak at 4.65% and stayed high until November. It is now just over 4%.

This pattern was similar to the pattern in the USA and the Euro area. The main cause of large rate rises in all three places was the decision of their Central banks to go in for rapid and severe monetary tightening, as they belatedly woke up to the high inflation they had allowed or caused, depending on your view.

It is true that in the period September  26th to September 28th 2022 the UK had a  bad sell off in gilts . This was mainly caused by the Liability Driven Investment crisis.  The Bank has written of “severe dysfunction in  the UK government bond market when distressed forced selling of gilts by liability driven investment funds led to a fire sale dynamic”. The IMF also wrote  how  “liability driven investment funds were at the centre of the severe stress that emerged in the UK gilt (bond)  market”

There are those for political reasons who claim all this was brought on by so called unfunded tax cuts in the mini budget. They overlook the fact that the increases in  spending were considerably higher than the tax cuts, forget that the gilt market had fallen a long way that month before the budget because the Bank wanted a big rise in interest rates, and forget the role of LDI investors the following week in driving the market down more. The Chancellor did push the  deficit up more than I suggested  and could have done more to control spending. Nonetheless the pattern of rate rises and falls show that the main cause of the rate increases was Bank policy, and the main cause of the three day  meltdown was LDI troubles as owners of bonds they could not afford had to sell to pay their bills. It was very difficult finding buyers when they knew the Bank was about to sell £80 bn worth of bonds and LDI investors had to sell lots of bonds as well.

Further proof of this is how the Bank turned the gilt market round. By announcing purchases of bonds and suspending the planned sales the Bank brought the ten year rate back down to 3.1% by 20th November 2022.The fact that  the following year after a series of tax rises the rate went considerably higher than in September 2022 again underlines tax cuts were not the main issue.