George Osbourne has decided to do what his colleagues in America and Japan have been doing for quite a while now, and has asked to receive the receipts from the profits that the Bank of England has received from quantitative easing (QE). But QE has cost the Bank £375 billion I hear you say? Well it hasn't cost the bank £375 billion, it simply printed the money, but this debt - in the form of gilts - pays interest, and Mr O has asked for that interest back.
Now this is no small matter. As Richard Murphy says, this is the equivalent of about £40 billion pounds a year given the current size of the scheme, or £30 billion in total since the scheme started. As Murphy also says, that is £30 billion we no longer need to cut.
So to recap in case you missed it: the Bank of England has bought UK government debt (which the bank issued on behalf of the government) and in return it receives interest on this debt, paid by the UK government. In return the government is now asking the bank to tranfer the proceeds from this debt (back) to the UK government. I feel a bit like I am in a washing machine.
PS. as the TUC point out, maybe this has just been done by Osbourne to ensure that he can say that debt is falling rather than rising in December when he makes the Autumn Statement?
Btw, if you owed yourself £375 billion, wouldn't you just cancel that debt?