In other words, the government created the money it spent.Īnd that is what happens every day, whenever the government spends. And, as the Bank of England has now admitted, most of this new money will never be cancelled, or be repaid to use the common parlance. No supposed taxpayer funding was involved, at all. It was funded with money created by the Bank of England using the quantitative easing process that matched the government's deficit. The Covid crisis was not funded by taxpayers or so-called taxpayer's money. Let me illustrate this with a chart from a recent report from the New Economics Foundation: Let's just deal with that 'the government has no money of its own' argument. Let's leave aside too that just because something is on the government balance sheet it must be moved off it, as she clearly implies. Let's leave aside that as the minister responsible Nadine Dorries did not know how Channel 4 is funded. This is part of the debate re privatisation decision/ future sustainability. Gov has no money of its own, it’s tax payer derived. This, however, has not stopped Nadine Dorries from spouting the same nonsense:Ĭ4 borrowings sit on the Gov balance sheet. Taxpayer's merely used government created money.
She was wrong, of course, The exact opposite is true. There is no such thing as public money there is only taxpayers’ money. It was in 1983 that Margaret Thacher told a Tory Party conference that: