The Bank of England wanted to buy bicycles in case of societal collapse

A dozen bicycles were proposed to let the directors travel around if civilization had fallen

There was pretty stunning revelation in the House of Lords last night. Lord Myners, a former member of the Court of Directors of the Bank of England, told the House:

In the light of what we now know about the Bank of England, I think we have to ask whether it is still right to be putting as much authority in the hands of the Bank without appropriate accountability.

When I was a member of the court, I sat in on a meeting of the financial stability committee – it would have been 2006 or 2007. One of the governors at that meeting proposed that as a mechanism to cope with crisis, the Bank should buy half a dozen or a dozen bicycles in order that members of the Bank could move swiftly and anonymously around the City.

That tells us a huge amount about where the Bank sits in terms of its understanding of the complexity of financial markets. Some of the things that we have seen over the past few weeks have simply raised more questions about the wisdom of putting so much power in the hands of the Bank.

We already know of Alistair Darling's fear that he would wake up one day to find the ATMs had stopped working, but this shows that in some areas of our financial system, the fear was much greater.

Myners seems to think that this precaution shows that the bank was run by a bunch of panicky blowhards who didn't really understand how financial markets work. But the idea that total financial collapse WASN'T a possible outcome of the largest crisis in 80 years seems risk-blindness of the highest order.

A man rides a bike. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty Images.
Show Hide image

Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.