EDM 854

Publicly Created Money and Monetary Reform is the title of Eearly Day Motion 854 tabled by David Chaytor MP in the House of Commons on March 10^th 2003. The text reads:

"That this House, concerned at the rising burden of private debt¹, public borrowing², student borrowing³and public-private finance initiatives;

	notes that the proportion of publicly created money in circulation has fallen from 20% of the money supply in 1964 to 3% today;
	believes that increasing the proportion of publicly created money in issue may provide a new means of financing public investment;
	further notes that it is suggested that the use of publicly created money can cut the cost of public investment by at least one half of what it would otherwise be by eliminating the need to pay interest;
	accepts that such a policy can be adopted without any impact on inflation if suitable regulatory changes are made;

and therefore urges the Treasury and Treasury Select Committee to commission independent reviews on procedures for increasing the proportion of publicly created money in the economy and on the benefits of so doing and report them to this House."

1. Private debt has, according to the Bank of England, grown at the rate of 13.5% over the year to October 2002. This is part of a continuing trend of growth in borrowing being in excess of income growth in the UK. http://www.bankofengland.co.uk/mfsd/li/030103/lendind.pdf

2. Public sector net debt did, according to HM Treasury data published in November 2002 fall between 1996/97 and 2001/02 by £38 billion but is forecast to increase between 2001/02 and 2006/07 by £97 billion. http://www.hm-treasury.gov.uk/media// 54E68/040303PDB.XLS published by the Office of National Statistics for HM Treasury

Explanations are available as

4-page Briefing Notes

12-page Briefing Document

The historic precedence is a Motion from 1964.

Current correspondence: Letter to the Chancellor of the Exchequer March 19, 2003

Response by Ruth Kelly MP as the Minister responsible April 15, 2003