Monetary reform in Britain

Short description: Reform of money supply and the banking system in the Britain

Monetary reform is the process of fundamentally changing policies regarding money. It can include changes to the money creation process, fractional-reserve banking, financial institutions, financing of the economy and social credit among other things.[1]

## Contents

* 1 History
* 1.1 19th century
* 1.2 Post-World War I
* 1.3 C. H. Douglas and the Social Credit-movement
* 1.4 Monetarist transition (1970s-1980s)
* 1.5 Bank of England independence movement (1990s)
* 2 Parliamentary engagement
* 2.1 Parliamentary commissions and reports
* 3 Recent development and debate
* 3.1 2008 financial crisis
* 4 Key reform proposals
* 4.1 Sovereign money creation
* 4.2 Specific policy proposals and mechanisms
* 5 Papers
* 6 See also
* 7 References

## History

### 19th century

British monetary reform has historical roots in questioning the gold standard during the Industrial Revolution. The Currency School and Banking School debates of the 1840s laid groundwork for later reform movements,[2] particularly around the Bank Charter Act of 1844.[3]

### Post-World War I

The economic disruptions following World War I sparked renewed interest in monetary reform. John Maynard Keynes published A Tract on Monetary Reform in 1923.[4] Unemployment, economic instability, and gold standard issues created interest in alternative economic theories.[5]

### C. H. Douglas and the Social Credit-movement

C. H. Douglas, founder of the Social Credit-theory. Photo taken in Edmonton, Alberta, Canada, 1934.

In the years around 1920 the British engineer C. H. Douglas developed a theory on banking and welfare distribution, a theory which he called "Social Credit", and which soon became the cornerstone of an international movement with the same name. However, Douglas himself warned against viewing the Social Credit solely as a scheme for monetary reform. Personally he preferred to describe it as "the policy of a philosophy" or, to be exact, the policy of "practical Christianity".[6] This policy, linked to this philosophy, is all about dispersing economic and political power to individuals. As he once wrote, "Systems were made for men, and not men for systems, and the interest of man which is self-development, is above all systems, whether theological, political or economic."[7]

### Monetarist transition (1970s-1980s)

The collapse of the Bretton Woods system led to fundamental reconsideration of monetary frameworks.[8] Milton Friedman's monetarist theories gained significant influence in British policy circles, culminating in the adoption of the Medium Term Financial Strategy under the Thatcher government.

Reform movements during this period included:

* Monetary targeting experiments that questioned discretionary policy[9]
* Supply-side economics integration with monetary reform ideas[10]
* Growing criticism of government monetary intervention[11]

### Bank of England independence movement (1990s)

After a campaign for central bank independence,[12] the Bank of England achieved operational independence in 1997[13] with inflation targeting as the primary monetary policy framework.[14]

The independence movement involved:

* Cross-party parliamentary support[15]
* Academic consensus building[16]
* International comparative analysis[17]
* Economic modernization efforts[18]

## Parliamentary engagement

### Parliamentary commissions and reports

The Radcliffe report (1959) represented the most comprehensive parliamentary investigation into British monetary systems in the post-war era.[19] The report challenged conventional monetary theory[20] and influenced subsequent policy debates.[21]

Following the Libor scandal, the Parliamentary Commission on Banking Standards (2013) published "Changing banking for good" - a comprehensive report outlining radical banking industry reforms.[22] The Independent Commission on Banking recommended "ring fencing" retail deposits,[23] which was passed in the 2013 Financial Services (Banking Reform) Act.[24]

## Recent development and debate

Michael Rowbotham's The Grip of Death, published 1998, was an attack on the banking system as well as the politics of globalization, free trade and growth-oriented strategies based on these lines. The book was widely spread and got reviews in magazines such as The Ecologist,[25] Resurgence, New Internationalist, The Tribune, The Tablet, Sustainable Economics, Permaculture Magazine, Food Magazine and Social Credit.[26] Some of the British monetary reformers, such as Michael Rowbotham, are influenced by the Social Credit-movement.

The Money Reform Party[27][28] was founded by Anne Belsey from Kent in 2005 and deregistered in 2014.[29] Belsey stood for the MRP in the 2006 Bromley and Chislehurst by-election and came last with 33 votes. She stood in Canterbury in 2010[30] and came last with 173 votes. Author Mark Braund recommended the MRP website "which includes a compelling explanation of the mechanics of money creation and its impact on society".[31]

### 2008 financial crisis

The 2008 financial crisis sparked significant renewed interest in monetary reform. Several organizations emerged or gained prominence:

* Positive Money became a leading advocacy group, promoting sovereign money creation.[32]
* New Economics Foundation contributed research and policy proposals for banking sector reform.[33]

## Key reform proposals

### Sovereign money creation

Proponents argue that money creation should be a sovereign government function rather than a private banking privilege.[34]

This would involve:

* Transferring money creation powers to a public institution[35]
* Eliminating fractional-reserve banking[36]

### Specific policy proposals and mechanisms

Ring-fencing proposals from the Independent Commission on Banking represented significant policy development,[37] though falling short of full structural separation advocated by reform movements.[38]

Digital currency initiatives have gained attention, with the Bank of England exploring central bank digital currency options that could fundamentally alter monetary systems.[39]

A quantitative easing alternative is direct distribution to citizens rather than through financial markets.[40]

Britain has had numerous local currency initiatives from the Totnes pound[41] to time banks.[42]

## Papers

* 2010 – Towards a Twenty-First Century Banking and Monetary System, Joint Submission to the Independent Commission on Banking, UK (Chair: Professor Sir John Vickers), with Ben Dyson, Tony Greenham, Josh Ryan-Collins, by the Centre for Banking, Finance and Sustainable Development, the new economics foundation, and Positive Money, submitted 19 November 2010 PDF[43]

## See also

* List of monetary reformers
* Universal basic income in the United Kingdom

## References

1. ↑ For an example of the use of the term, see this contribution from Bilderberg.org
2. ↑ (in en) The New Palgrave Dictionary of Economics. Springer. 2016-05-18. ISBN 978-1-349-58802-2. https://www.google.com/books/edition/The_New_Palgrave_Dictionary_of_Economics/EO40DAAAQBAJ?hl=en&gbpv=1&dq=British+"monetary+reform"+Currency+School&pg=RA3-PA852&printsec=frontcover.
3. ↑ Glasner, David (2013-12-16) (in en). Business Cycles and Depressions: An Encyclopedia. Routledge. ISBN 978-1-136-54520-7. https://www.google.com/books/edition/Business_Cycles_and_Depressions/VOBcAgAAQBAJ?hl=en&gbpv=1&dq=British+"monetary+reform"+Bank+Charter+Act+of+1844&pg=PA31&printsec=frontcover.
4. ↑ Arnon, Arie; Marcuzzo, Maria Cristina; Rosselli, Annalisa (2022-02-11) (in en). Financial Markets in Perspective: Lessons from Economic History and History of Economic Thought. Springer Nature. ISBN 978-3-030-86753-9. https://www.google.com/books/edition/Financial_Markets_in_Perspective/Y6deEAAAQBAJ?hl=en&gbpv=1&dq=disruptions+"World+War+I"+"monetary+reform"+Britain&pg=PA122&printsec=frontcover.
5. ↑ Youngson, A. J. (2013-11-05) (in en). Britain's Economic Growth 1920-1966. Routledge. ISBN 978-1-136-58930-0. https://www.google.com/books/edition/Britain_s_Economic_Growth_1920_1966/rQ_8AQAAQBAJ?hl=en&gbpv=1&dq=Britain+1920s+"gold+standard"+high+unemployment+economic+instability+reform&pg=RA3-PT62&printsec=frontcover.
6. ↑ C.H. Douglas. "The Policy of a Philosophy". Australian League of Rights. Archived from the original on 2007-09-04. https://web.archive.org/web/20070904045608/http://www.alor.org/Library/Policyofaphilosophy.htm#1a. Retrieved 2008-03-01.
7. ↑ Douglas, C.H. (1974). Economic Democracy, Fifth Authorised Edition. Epsom, Surrey, England: Bloomfield Books. pp. 18. ISBN 0-904656-06-3. https://archive.org/details/econdemocracy00dougiala. Retrieved 2008-11-12.
8. ↑ Yokokawa, Nobuharu; Yagi, Kiichiro; Uemura, Hiroyasu; Westra, Richard (2016-04-14) (in en). The Rejuvenation of Political Economy. Routledge. ISBN 978-1-317-22147-0. https://www.google.com/books/edition/The_Rejuvenation_of_Political_Economy/OET7CwAAQBAJ?hl=en&gbpv=1&dq=Bretton+Woods+collapse+reconsideration+monetary+frameworks&pg=PA245&printsec=frontcover.
9. ↑ Needham, Duncan (2014-05-09) (in en). UK Monetary Policy from Devaluation to Thatcher, 1967-82. Springer. ISBN 978-1-137-36954-3. https://www.google.com/books/edition/UK_Monetary_Policy_from_Devaluation_to_T/tDXtAwAAQBAJ?hl=en&gbpv=1&dq=Britain+monetary+targeting&pg=PP9&printsec=frontcover.
10. ↑ Booth, Alan (1995) (in en). British Economic Development Since 1945. Manchester University Press. ISBN 978-0-7190-4503-5. https://www.google.com/books/edition/British_Economic_Development_Since_1945/9Qu8AAAAIAAJ?hl=en&gbpv=1&dq=Britain+supply-side+economics&pg=PA159&printsec=frontcover.
11. ↑ Coopey, Richard; Woodward, Nicholas (2025-06-01) (in en). Britain in the 1970s: The Troubled Economy. Taylor & Francis. ISBN 978-1-040-36584-7. https://www.google.com/books/edition/Britain_in_the_1970s/yT9UEQAAQBAJ?hl=en&gbpv=1&dq=Britain+criticism+government+monetary+intervention+1970s&pg=PA28&printsec=frontcover.
12. ↑ Cobham, David (2003-02-14) (in en). The Making of Monetary Policy in the UK, 1975-2000. John Wiley & Sons. ISBN 978-0-470-85516-4. https://www.google.com/books/edition/The_Making_of_Monetary_Policy_in_the_UK/gV3xjhcbORgC?hl=en&gbpv=1&dq=England+central+bank+independence+sustained+campaign&pg=PA103&printsec=frontcover.
13. ↑ Davies, Howard; Green, David W. (2010-04-12) (in en). Banking on the Future: The Fall and Rise of Central Banking. Princeton University Press. ISBN 978-1-4008-3463-1. https://www.google.com/books/edition/Banking_on_the_Future/O99_n-1hLGgC?hl=en&gbpv=1&dq=Bank+of+England+independence+movement&pg=PA141&printsec=frontcover.
14. ↑ Matthews, Kent; Booth, Philip M. (2006-02-22) (in en). Issues in Monetary Policy: The Relationship Between Money and the Financial Markets. John Wiley & Sons. ISBN 978-0-470-03281-7. https://www.google.com/books/edition/Issues_in_Monetary_Policy/OZmO9Q7MsQMC?hl=en&gbpv=1&dq="Bank+of+England"+inflation+targeting&pg=PA6&printsec=frontcover.
15. ↑ Schmidt, Vivien Ann (2002) (in en). The Futures of European Capitalism. Oxford University Press. ISBN 978-0-19-925368-5. https://www.google.com/books/edition/The_Futures_of_European_Capitalism/Ob7mCwAAQBAJ?hl=en&gbpv=1&dq="Bank+of+England"+independence+cross+party+support&pg=PA267&printsec=frontcover.
16. ↑ Maman, Daniel; Rosenhek, Zeev (March 2011) (in en). The Israeli Central Bank: Political Economy, Global Logics and Local Actors. Taylor & Francis. ISBN 978-1-136-82237-7. https://www.google.com/books/edition/The_Israeli_Central_Bank/j7QGY9jYS_MC?hl=en&gbpv=1&dq="Bank+of+England"+independence+academic+consensus&pg=PA20&printsec=frontcover.
17. ↑ Cobham, David (2003-02-14) (in en). The Making of Monetary Policy in the UK, 1975-2000. John Wiley & Sons. ISBN 978-0-470-85516-4. https://www.google.com/books/edition/The_Making_of_Monetary_Policy_in_the_UK/gV3xjhcbORgC?hl=en&gbpv=1&dq="Bank+of+England"+independence+international+comparative+analysis&pg=PA111&printsec=frontcover.
18. ↑ Senior, Paul; Crowther-Dowey, Chris; Long, Matt (2007-12-16) (in en). Understanding the Modernisation of Criminal Justice. McGraw-Hill Education (UK). ISBN 978-0-335-23527-8. https://www.google.com/books/edition/Understanding_the_Modernisation_of_Crimi/CdZEBgAAQBAJ?hl=en&gbpv=1&dq="Bank+of+England"+independence+economic+modernization&pg=PA28&printsec=frontcover.
19. ↑ Bonis, Riccardo De; Pozzolo, Alberto Franco (2012-01-05) (in en). The Financial Systems of Industrial Countries: Evidence from Financial Accounts. Springer Science & Business Media. ISBN 978-3-642-23111-7. https://www.google.com/books/edition/The_Financial_Systems_of_Industrial_Coun/R3ULBAJPIyIC?hl=en&gbpv=1&dq="Radcliffe+report"+comprehensive+investigation&pg=PA75&printsec=frontcover.
20. ↑ Mizen, Paul (2003-01-01) (in en). Central Banking, Monetary Theory and Practice: Essays in Honour of Charles Goodhart. Edward Elgar Publishing. ISBN 978-1-78195-077-7. https://www.google.com/books/edition/Central_Banking_Monetary_Theory_and_Prac/j5pg-t113aoC?hl=en&gbpv=1&dq="Radcliffe+report"+monetary+theory&pg=PA24&printsec=frontcover.
21. ↑ Wood, John Harold (2005-06-06) (in en). A History of Central Banking in Great Britain and the United States. Cambridge University Press. ISBN 978-0-521-85013-1. https://www.google.com/books/edition/A_History_of_Central_Banking_in_Great_Br/Jc_c_JAqrjoC?hl=en&gbpv=1&dq="Radcliffe+report"+decades+influence&pg=PA323&printsec=frontcover.
22. ↑ Macartney, Huw (2019-09-12) (in en). The Bank Culture Debate: Ethics, Values, and Financialization in Anglo-America. Oxford University Press. ISBN 978-0-19-258190-7. https://www.google.com/books/edition/The_Bank_Culture_Debate/jmmtDwAAQBAJ?hl=en&gbpv=1&dq="Changing+banking+for+good"+2013+radical&pg=PA137&printsec=frontcover.
23. ↑ Ashton, James (2018-03-12). "James Ashton: Proof ring-fencing in banks is a total waste of energy" (in en). https://www.standard.co.uk/business/james-ashton-proof-ringfencing-in-banks-is-a-total-waste-of-energy-a3787541.html.
24. ↑ Díaz, Belén Díaz; Capaldi, Nicholas; Idowu, Samuel O.; Schmidpeter, René (2020-05-11) (in en). Responsible Business in a Changing World: New Management Approaches for Sustainable Development. Springer Nature. ISBN 978-3-030-36970-5. https://www.google.com/books/edition/Responsible_Business_in_a_Changing_World/PmXjDwAAQBAJ?hl=en&gbpv=1&dq="Financial+Services"+(Banking+Reform)+Act+UK+2013&pg=PA76&printsec=frontcover.
25. ↑ Hutchinson, Frances. "The Grip of Death: A Study of Modern Money, Debt Slavery and Destructive Economics.". The Ecologist (Vol. 29, Issue 1). https://go.gale.com/ps/i.do?id=GALE|A54074036&sid=googleScholar&v=2.1&it=r&linkaccess=abs&issn=02613131&p=AONE&sw=w&cookieConsent=true&analyticsOptout=false&userGroupName=anon~40ba4d96&aty=open-web-entry.
26. ↑ "Michael Rowbotham: Written in Belief | Scoop News". http://www.scoop.co.nz/stories/HL0110/S00021.htm.
27. ↑ "Money Reform Party". http://www.moneyreformparty.org.uk.
28. ↑ Frisby, Dominic (September 18, 2008). "The Money Reform Party". Frisby's Bulls And Bears. https://www.acast.com/bullsandbears/the-money-reform-party. Retrieved April 16, 2017.
29. ↑ "Money Reform Party". Open Electoral Commission. http://openelectoralcommission.org.uk/parties/PP514/money-reform-party/. Retrieved April 16, 2017.
30. ↑ "Election candidates so far for Canterbury and Whitstable". This is Kent. April 16, 2010. http://m.kentlive.news/election-candidates-far-canterbury-whitstable/story-12012023-detail/story.html. Retrieved April 16, 2017.
31. ↑ "Money for nothing". The Observer. April 5, 2009. https://www.theguardian.com/commentisfree/2009/apr/03/g20-economics-banks. Retrieved April 16, 2017.
32. ↑ Weber, Beat (2018-05-17) (in en). Democratizing Money?: Debating Legitimacy in Monetary Reform Proposals. Cambridge University Press. ISBN 978-1-108-17392-6. https://www.google.com/books/edition/Democratizing_Money/u01UDwAAQBAJ?hl=en&gbpv=1&dq="Positive+Money"+"sovereign+money"+financial+crisis&pg=PA8&printsec=frontcover.
33. ↑ Arestis, Philip; Sawyer, Malcolm (2014-10-20) (in en). Economic Policies of the New Thinking in Economics. Routledge. ISBN 978-1-317-85049-6. https://www.google.com/books/edition/Economic_Policies_of_the_New_Thinking_in/GMfoBAAAQBAJ?hl=en&gbpv=1&dq=financial+crisis+"New+Economics+Foundation"&pg=PA62&printsec=frontcover.
34. ↑ Pettifor, Ann (2017-02-21) (in en). The Production of Money: How to Break the Power of Bankers. Verso Books. ISBN 978-1-78663-136-7. https://www.google.com/books/edition/The_Production_of_Money/_W7nDwAAQBAJ?hl=en&gbpv=1&dq="sovereign+money"+Britain+private&pg=PT110&printsec=frontcover.
35. ↑ Stellinga, Bart; Hoog, Josta de; Riel, Arthur van; Vries, Casper de (2021-06-03) (in en). Money and Debt: The Public Role of Banks. Springer Nature. ISBN 978-3-030-70250-2. https://www.google.com/books/edition/Money_and_Debt_The_Public_Role_of_Banks/oqkxEAAAQBAJ?hl=en&gbpv=1&dq="money+creation"+public+reform+Britain&pg=PA1&printsec=frontcover.
36. ↑ Roselli, A. (2011-11-08) (in en). Financial Structures and Regulation: A Comparison of Crises in the UK, USA and Italy. Springer. ISBN 978-0-230-34666-6. https://www.google.com/books/edition/Financial_Structures_and_Regulation_A_Co/D-qFDAAAQBAJ?hl=en&gbpv=1&dq=Britain+eliminating+fractional-reserve+banking&pg=PA211&printsec=frontcover.
37. ↑ Bailey, David; Cowling, Keith; Tomlinson, Philip (2015-04-02) (in en). New Perspectives on Industrial Policy for a Modern Britain. OUP Oxford. ISBN 978-0-19-101646-2. https://www.google.com/books/edition/New_Perspectives_on_Industrial_Policy_fo/DU_CBwAAQBAJ?hl=en&gbpv=1&dq=Britain+ring-fencing+banking+significant+policy+development&pg=PA110&printsec=frontcover.
38. ↑ Armour, John; Awrey, Dan; Davies, Paul; Enriques, Luca; Gordon, Jeffrey N.; Mayer, Colin; Payne, Jennifer (2016-08-04) (in en). Principles of Financial Regulation. Oxford University Press. ISBN 978-0-19-109005-9. https://www.google.com/books/edition/Principles_of_Financial_Regulation/czfKDAAAQBAJ?hl=en&gbpv=1&dq=Britain+ring-fencing+structural+separation&pg=PT603&printsec=frontcover.
39. ↑ K, Ozili, Peterson (2024-07-24) (in en). Global Developments in Central Bank Digital Currency. IGI Global. ISBN 979-8-3693-5590-9. https://www.google.com/books/edition/Global_Developments_in_Central_Bank_Digi/6OUWEQAAQBAJ?hl=en&gbpv=1&dq=Bank+of+England+central+bank+digital+currency&pg=PA40&printsec=frontcover.
40. ↑ Clark, David (2016) (in en). The Global Financial Crisis and Austerity: A Basic Introduction. Policy Press. ISBN 978-1-4473-3039-4. https://www.google.com/books/edition/The_Global_Financial_Crisis_and_Austerit/GFzvCgAAQBAJ?hl=en&gbpv=1&dq=Bank+of+England+quantitative+easing+direct&pg=PA34&printsec=frontcover.
41. ↑ Stănescu, Cătălin-Gabriel; Gikay, Asress Adimi (2020-12-28) (in en). Discrimination, Vulnerable Consumers and Financial Inclusion: Fair Access to Financial Services and the Law. Routledge. ISBN 978-1-000-29519-1. https://www.google.com/books/edition/Discrimination_Vulnerable_Consumers_and/9uYLEAAAQBAJ?hl=en&gbpv=1&pg=PT139&printsec=frontcover.
42. ↑ Lukas, Valek; Vladimir, Bures (2018-09-21) (in en). Time Bank as a Complementary Economic System: Emerging Research and Opportunities: Emerging Research and Opportunities. IGI Global. ISBN 978-1-5225-6975-6. https://www.google.com/books/edition/Time_Bank_as_a_Complementary_Economic_Sy/YwhrDwAAQBAJ?hl=en&gbpv=1&dq=UK+time+banks+community+exchange&pg=PA36&printsec=frontcover.
43. ↑ Gould, B. (2013-09-16) (in en). Myths, Politicians and Money: The Truth Behind the Free Market. Springer. ISBN 978-1-137-35863-9. https://www.google.com/books/edition/Myths_Politicians_and_Money/VVdOAwAAQBAJ?hl=en&gbpv=1&dq="Towards+a+Twenty-First+Century+Banking+and+Monetary+System"&pg=PT237&printsec=frontcover.

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