It might sound unbelievable, but for the last 170 years, parliament has ignored the question of how money is created. The last significant debate on the creation of money in Parliament happened in 1844! And even though money plays an extraordinarily important role in today’s world, most Members of Parliament still wrongly believe that only the Bank of England has the authority to create money.
So far more than 1800 people have emailed their MPs about our Dodds poll which revealed that 7 out of 10 MPs think that only the government can create new money; and, only 1 out of 10 MPs know that new money is created by commercial banks when you make a loan. Labour MPs replied in a variety of ways and then they settled on the following as a standard response (in italics):
Our recent email campaign, sharing the results of a poll, which showed an alarming lack of understanding of how money works in Britain, received this reply from the Liberal Democrats, including Nick Clegg.
On August the 19th we started an email campaign to highlight the startling results of the poll that showed that only 1 in 10 MPs understand that 97% of money is created by banks, we have encouraged all Positive Money supporters to email their MP and ask them to confirm that they are aware of these 3 facts:
MPs lack basic knowledge about the fundamentals of money, leaving them ill-equipped to understand the impending dangers of another house price boom or a second credit bubble, according to an exclusive Dods Monitoring poll commissioned by Positive Money, the campaign body calling for fundamental reform of our money and banking system.