The government stunt before the local elections of taking powers to override the Chinese owners and the managers of British Steel at Scunthorpe failed to save Labour from electoral loss. We now need to be told how much all this will cost UK taxpayers. It has the makings  of a financial disaster resulting in   the loss of many jobs.

There is first the need to sort out the ownership. The Chinese owners will contest their liability for costs and losses since the government took over issuing the orders. Company law  will be in conflict with the imprecise statements in the emergency law to “save” the blast furnaces and jobs. The government clearly wants the owners out as there is such a big disagreement over the future of the plant.

The second is to find a new owner/ manager to take over the responsibility for the business, with agreed levels of subsidy which will be needed and could be high to keep open the present plant.

The third is to return to the US trade talks and negotiate the freedom from super tariffs on our steel exports as the government originally claimed.

The fourth is to agree a plan with the new management over the likely life of the current blast furnaces and any necessary investment into them .

If the government is unable to find a new owner/ manager and has to nationalise, all of the above need to be done through a new nationalised Head of British Steel. Taxpayers will then have to take all the risks and pay all the bills, instead of limiting exposure to an agreed level of subsidy.

If nationalised all the capital spending as well as the losses have to be included in public spending. Those who argue for nationalisation fail to tell us how much all this costs. They also imply it will save all the jobs and gives eternal life to two very old blast furnaces. I do not believe them.  At current energy prices in the UK a blast furnace will not be internationally competitive.

We have government of the lawyers by the lawyers for the lawyers . Could they please get better at the law? Could they get onto the side of the British people instead of so often siding with questionable  interpretations of foreign treaties  and courts?

Why did our government lawyers not point out that the International Court of Justice who advised we should give the Chagos away has no power to judge a UK case involving a Commonwealth member?

Why did they not remind us the US accepts no judgements of the International Court of Justice?

Why did they not point out under our Treaty opting into the Court we have the right to unilaterally amend the terms of membership?

When advising on the human rights of illegal migrants, why do they not point out that France under the same human rights laws comes to a very different view over what they have to offer them?

Why don’t our government lawyers find a way to strengthen or enforce the law against illegal boat trips, money laundering , people  trafficking and dangerous voyages to stop the small boats.?

Why don’t they want to enforce and strengthen environmental and fishing law against plundering 100 metre plus industrial trawlers in our waters?

Most of us want to live under the rule of  law, but we want one that’s fair to taxpayers and voters legally settled in our country. The government lawyers are out of touch with the public mood.

Facts4EU have launched a campaign to save our sovereignty, with several other groups in support. The give away of Chagos, the invitation to the EU/Spain to police the Gibraltar border , and the offer to the EU that we will lay them money to enforce more of their trade and farming laws on us all point  to a government that does not value our sovereignty.

A party with a big majority in Parliament has every right to impose more  laws, put up our taxes and waste our money if that’s what they want to do.They will  pay the price at the next election if they ignore the criticism and opposition voices. Any if these things can be cancelled or amended by a new government after the next election.

What they are not allowed to do is to give powers of self government away without consent. It needs  a referendum to give powers away to the EU after the clear result in 2016. The Labour party did not signal its surrenders to international pressures and bad advice over these matters in its Mainfesto.

Well done to Facts4EU and the other groups who are promoting thus  campaign, Stand up for Our Sovereignty. I say Save Our Sovereignty. We all say SOS.

Donald Trump came to office wanting peace. He had pressed the Biden team to try to get a cessation of hostilities in Gaza. He thought he could talk to Putin to get a ceasefire in Ukraine. Both have proved too difficult so far. Now as he tries to negotiate a settlement with Iran to stop them acquiring nuclear  weapons and stop them backing militant groups  in several Middle East hot spots, he sees Israel taking preemptive military action against Iran.

The UK with France tried to put together a coalition  of the willing to act as a peacekeeping force in Ukraine There were not  many willing and Russia saw such a force as a NATO proxy  on the side of Ukraine, not as an independent and neutral peacekeeper. In Gaza the UK speaks as a neutral telling both sides, Hamas and Israel, to calm it.The UK has no plans to intervene militarily in Gaza.

What do you think the US should do next? Is there anything useful the UK could do or say to promote peace in any of these conflict zones?

The OBR in March, reviewing its budget forecasts, quietly cut its forecast for capital or wealth taxes by £2.8 bn for 2025-6.  It slashed £5 bn off the forecast for 2028-9, an 18% fall to a £23 bn total. Capital taxes are Inheritance tax, capital gains tax and Stamp duties. So much for Labours plan to soak the rich to pay for everything.

The government has to learn that energetic entrepreneurial people and people who have worked hard and built up their savings do not need to stay here to pay extra taxes on their efforts. Indeed they are leaving in their droves for lower taxes and sunnier climes. We are not just losing the ultra rich, the Non Doms driven out by the abolition of the right to just pay here on their wealth and earnings here. We are losing the modestly affluent, retiring abroad, and young strivers who want to set up a business or get a well paid job somewhere where they can keep more of the reward.

It is also the case that those with savings and wealth who do stay decide to pay less capital tax as the rates go up.People with second homes bought a long tine ago do not feel able to swap them for a more appropriate sized or located property because the CGT and Stamp Duty is crippling. Housing becomes less well adjusted to needs as a result. People with shares bought  a long tine ago, or tec shares  bought well more recently sit on large capital gains. They are not going to switch the capital into something new or better if they face a big tax bill to do so. Capital is less well allocated and the government loses out on Stamp duty on switching assets.

Jealousy is a bad basis for  public policy. The notion that there enough rich people to stay and pay even more of the tax to cover a spendthrift government has always proved wrong. 1970 s UK had the brain drain with sky high tax rates. The Labour government had to borrow from the IMF and cut public spending as tax revenues disappointed.  Cuba and Venezuela impoverished themselves by blaming the rich.

This  government loves giving away  money and assets to foreign governments.They love taxing us to fund this largesse.

They gave away Chagos and a big dowry  to Mauritius. So big a dowry Mauritius cuts Income tax whilst we pay more. China applauds Mauritius whilst the PM wrongly claims China is against the deal!

£500 m to France to control the small boats, which then increase in numbers.

The offer of money to the EU to put us under their  laws which most of us do not want.

The offer to Spain/EU to run our borders  in Gibraltar with their armed police on our sovereign key naval and air base. The Spanish PM is over the moon and still claims he wants to take over Gibraltar against international law and the views of Gibraltarians.

Then there is the payment to house thousands of illegal migrants in hotels because the government fails to implement its promise to smash the gangs.

Why is this government always against us? It is the government of international lawyers, by international lawyers for international lawyers.

The Chancellor set about spending with rare enthusiasm as she pandered  to her Labour MP audience. In a heavily party drenched presentation she played fairy godmother giving out public sector sweeties to as many named MP s, public sector trade unions and client groups as she could cram in . A bloated state was put on a fattening diet.

Every part of the public sector mentioned was praised for its employees and achievements. Every part had according to Reeves been starved of money by the previous governments which had put up public spending every year. Not once did she mention the productivity collapse, the staggering losses of the nationalised industries, the huge cost overruns of many public sector projects. This was fantasy economics.

We are asked to believe they will build nuclear power stations on time and to budget, yet we are not told what either the cost or the  timetable will be. We are asked to believe the newly nationalised railway  will run to time and not  send supplementary bills. We are told British steel is saved without being told how we replace the blast furnaces, square the Chinese owners and avoid all the US tariffs. We are asked to believe that re announcing tram and rail projects long in the pipeline will revive city centres and solve problems of urban decline.

There was no mention that longer term interest rates are way above Truss levels, that markets think the government is borrowing too much, or that the small increases in spend for the last two years look implausible under a spendthrift government wanting to be re elected. This Chancellor invented a black hole then set about digging a much bigger one.

PS The document issued after the speech promises 5% savings from efficiency improvements based on a £3 bn Transformation  Fund to spend more on computing. This does not even remove all the lost productivity since 2019. There are targets to reduce administrative costs without explaining how.

There is going to be no new golden nuclear age anytime soon in the UK. All but one of our present nuclear power stations close this decade as we impatiently await Hinckley C coming on stream to replace one third of the  lost capacity 2020-30.

The last government proposed building a second large station in Suffolk at Sizewell, and announced a competition to choose a builder for a series of smaller reactors.  Yesterday this government announced Rolls Royce will be the team leader and designer building these reactors. It was not a firm contract. There is no chosen location for the first one. There is £2.5 bn of public money over five years with no specified outputs listed in the announcements.

The Rolls Royce website says they want to gain safety and design approval for a 470 MW plant occupying a 5 acre site using pressure water technology. It will take an estimated 4 years from starting site work to the reactor generating power. Allowing further long periods to negotiate terms, get approvals  and set up fabrication it may be ten years before the first is running.

The government also announced £14.2 bn public spend on going ahead with Sizewell C. Again there is no contract, as they have not negotiated the private capital with co investors. They will not put a price  on it, but others say £40 bn. As the most recent guess for an SMR is £3 bn,  Sizewell is 13 times the price for under seven times the power. It does not look like great value. Past attempts to build one of these in France and the UK have gone way over budget and been much delayed. They say they  now know how to build them and will just copy one that is almost built. Sizewell will not be up and running before 2035.

The government tells us lots of new nuclear, more than we had before the  closures, is  essential. So how do we manage for the next ten years when nuclear almost disappears? We will need plenty of transitional gas stations for when the wind and the sun let us down.

Last night on GB News I set out again how I would cut Bank  of England losses on bonds.

The first thing to do is for the Chancellor to tell the Bank she will not pay for any more losses from selling bonds in the market. No other central bank does this. There is no stated good purpose for  the policy.The Chancellor’s permission was needed for the purchase, and the Treasury guarantees against loss.This gives her the right to order a stop to sales.

The second is to raise with the Bank the running losses where the  Bank spends far more on interest on commercial bank deposits than it receives in interest on the bonds which were bought at very high prices when interest rates were much lower. The ECB for example pays a lower rate of interest on its deposits than its lending rate . The Bank of England has the  same rate for lending and borrowing. The Bank could require a minimum level of reserve deposits by commercial banks at zero interest.

Some suggest paying nothing on any of the deposits. This has not been tried in recent years when these much larger deposits have built up. The ECB got  away with reducing the interest it pays. Markets might be more alarmed by the sudden withdrawal of all interest payments to banks. There could also be a knock on effect on bank lending and growth from the sudden sharp reduction in bank profits and cashflow. Better to proceed with more prudent  steps to carry markets with you.

I have been talking about huge Bank of England losses and the need to curb them for the last two years on this site. Now the Telegraph is reporting them as well, and Richard Tice has written to the Bank about them.The BBC when  I last  briefed them again about it told me no one reported it because they did not  understand it . Let’s have another go at explaining.

After the banking crash, briefly after Brexit and extensively after the pandemic out break the Bank created money to buy up £875 bn of government bonds. They paid high prices for them.

When bond prices rise the interest rate falls and vice versa. The Bank   bought the bonds to drive the prices up and the  interest rates down. If the government borrows £100 for a very long time at 1% it promises to pay  £1 a year interest on that £100 bond. If rates fall to o.5% the bond price rises to nearly £200 so the £1 of interest is now 0.5% of the value. If rates rise to 2% the £100 bond falls to nearly £50 so £1 of interest is 2% of value.

Now the Bank is sitting on big losses as it  has put interest rates up a lot and has  been selling bonds to drive their prices down. It is losing money three ways.

1. Selling depressed bonds in the market at big losses. There is no need to do this. The Bank could hold the bonds until they mature and repay at their original issue value. This is what other Central banks are doing.

2. Losing less on the bonds it holds to maturity. It is still losing on many of them which it bought above initial issue and repayment value

3 Paying more to commercial banks who deposit money with it than it gets on interest on the bonds it has bought with the money.

Tomorrow I will  explore how far the Bank could go in  reducing these losses.