{"id":54661,"date":"2020-12-22T14:28:10","date_gmt":"2020-12-22T14:28:10","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=54661"},"modified":"2020-12-22T14:28:17","modified_gmt":"2020-12-22T14:28:17","slug":"uk-law-has-already-enacted-modern-monetary-theory-and-was-last-updated-to-do-so-in-2000","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2020\/12\/22\/uk-law-has-already-enacted-modern-monetary-theory-and-was-last-updated-to-do-so-in-2000\/","title":{"rendered":"UK law has already enacted  modern monetary theory, and was last updated to do so in 2000"},"content":{"rendered":"<p>I saw this tweet today by the Gower Initiative for Modern Money Studies:<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Deliberately misleading the public? Or do your journalists lack a basic understanding of monetary operations and government finances, <a href=\"https:\/\/twitter.com\/hashtag\/MMT?src=hash&amp;ref_src=twsrc%5Etfw\">#MMT<\/a> ? <br \/>A complaint submitted today by our Associate, Neil Wilson. <br \/>In case you decide to ignore it... <a href=\"https:\/\/t.co\/2T05MaTDC1\">pic.twitter.com\/2T05MaTDC1<\/a><\/p>\n<p>&mdash; Gower Initiative for Modern Money Studies (@GowerInitiative) <a href=\"https:\/\/twitter.com\/GowerInitiative\/status\/1341328643507810304?ref_src=twsrc%5Etfw\">December 22, 2020<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>I have pursued the Act that they refer to, <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/Vict\/29-30\/39\/section\/13\" target=\"_blank\" rel=\"noopener noreferrer\">which is this<\/a>:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-54662\" src=\"https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.05.34-550x548.png\" alt=\"\" width=\"550\" height=\"548\" srcset=\"https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.05.34-550x548.png 550w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.05.34-301x300.png 301w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.05.34-768x766.png 768w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.05.34-1536x1531.png 1536w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.05.34-401x400.png 401w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.05.34.png 1968w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/p>\n<p>I am aware that is small print, but the text of this 1866 Act <a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/2000\/20\/schedule\/1\/paragraph\/5\" target=\"_blank\" rel=\"noopener noreferrer\">was updated in 2000<\/a> and says this:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-54663\" src=\"https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.19.27-550x201.png\" alt=\"\" width=\"550\" height=\"201\" srcset=\"https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.19.27-550x201.png 550w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.19.27-768x280.png 768w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.19.27-600x219.png 600w, https:\/\/www.taxresearch.org.uk\/Blog\/wp-content\/uploads\/2020\/12\/Screenshot-2020-12-22-at-14.19.27.png 1392w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/p>\n<p>Note subpart 2 in particular:<\/p>\n<blockquote><p>The Comptroller and Auditor General shall, on receipt of a requisition from the Treasury, grant the Treasury a credit on the Exchequer account at the Bank of England (or on its growing balance).<\/p><\/blockquote>\n<p>So, in other words, whenever the Treasury demands funds from the Bank of England it can have them, even if that increases its liability owing to the Bank. Which is exactly what MMT says, of course.<\/p>\n<p>Subpart 3 confirms this:<\/p>\n<blockquote><p>Where a credit has been granted under subsection (2) issues shall be made to principal accountants from time to time on orders given to the Bank by the Treasury.<\/p><\/blockquote>\n<p>The language remains that of 1866: the accountant referred to is the person responsible for the use of the funds. But that is not the key point: the issue is that the Treasury demand and as is noted, the Bank jumps.<\/p>\n<p>Again, this is exactly as MMT says.<\/p>\n<p>And as is also clear, whilst the 1866 Act says that all government revenues shall be paid into this account, nothing says there must be a balance held on it to permit this payment instruction to be enacted: it can happen, come what may, even if the overdrawn balance on it is growing. So an overdraft is legislated for here, and authorised by law, come what may.<\/p>\n<p>So, UK law has already enacted MMT.<\/p>\n<p>Well spotted by Neil Wilson.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I saw this tweet today by the Gower Initiative for Modern Money Studies: Deliberately misleading the public? Or do your journalists lack a basic understanding<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2020\/12\/22\/uk-law-has-already-enacted-modern-monetary-theory-and-was-last-updated-to-do-so-in-2000\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[],"class_list":["post-54661","post","type-post","status-publish","format-standard","hentry","category-modern-monetary-theory"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/54661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=54661"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/54661\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=54661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=54661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=54661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}