The Net Assets of UK Private Companies could easily be £6.4 trillion or more. A 1% net asset tax could raise £64 billion!

I had already showed that the 400 public companies in the UK have net assets of around £1.4 trillion, based on the numbers that anyone can find at the CompaniesMarketCap site. It would be trivial to simply apply a 1% annual tax on all such companies with positive net assets, raising a very useful £14 billion.

But what about the net assets of the UK's privately owned companies? 

I had a look at the remarkable website at the UK's Company Registry. It is absolutely trivial to obtain a complete list of the 5,463,264 companies that are currently active. Just click on this link.

You can find other types of companies

• 7,475,40 are Dissolved 
• 14,172 are "Open" (whatever that means) 
• 7768 are "Closed"
• 28,949 are "Converted Closed" 
• 2,987 are in Receivership 
• 111,176 are in Liquidation 
• 3537 are under Administration 
• 469 are  undergoing Insolvency proceedings
• 491 are described as "Voluntary arrangment"

And, if you just want to restrict the search to Active Private Limited Companies, you get a total of 5,128,075 companies. 

Amazingly, for all these companies anyone can download all the legal documents for free, including the current financial statements. These include a full statement that includes the assets, liabilities and net assets.  

So, what would be the net assets of those 5,128,075 active Private Limited Companies?
Well, I could download all the accounts, and do the sums. 

But, to get a preliminary estimate, I selected the 8848 companies that were incoportated during the first quarter of 2000 and still going. Here's the link for that search if you want to see them. You can download the first 5000 as an CSV file, by just clicking on a link. 

I can then use the name of each company to access the accounts.  For example, take a company called called UKOS LTD whose address is Unit 6 Grovelands Boundary Way Hemel Hempstead HP2 7TE England. Searching by name gets you to this webpage, where you just have to click on the link to download a pdf of the companies latest accounts. And on page 3, you can find this statement - where it says very clearly that UKOS Ltd has NET ASSETS of precisely £538,817. It's as easy as that. 

 I did this for the first 100 companies my list - which really looked random. 14 were described as dormant, with net assets typically of £1 to £100. 15 had negative net assets. But, if I took the total net assets for the 85 that had positive net assets, I got a total of  £123 548 807. 

So, this first look suggests that if I scaled up to the 5,128,075 active Private Limited Companies in the UK, the total would be something like £6.4 trillion. And a 1% net asset tax would generate around £64 billion.
This would require zero work, because all the accounting data is already done. 

And here's the best part - this is all completely FREE! Anyone can verify my results by going to the Companies House website and randomly sampling companies themselves. It may be that the net assets of companies that were incorporated in Q1 of 2000 are not representive. I would have to spend a couple more hours to confirm that.  But the data that Richard claims is too complex to collect is sitting there, free, for 5.46 million UK companies. No fees, no administrative burden, no valuation disputes - just the net assets that companies already calculate and file every year.

So, Richard, I simply can't accept your claim that taxing net wealth would be difficult. I have just demonstrated that a 1% tax on the net assets of Private Limited Companies and public companies would generaate an impressive 64 + 14 = £78  billion. That's not far off the £90 billion that you propose to raise by 30 different tax reforms. And I haven't even started on taxing individual net wealth! 

This also deals with Richard's claim that the wealth of individuals can be hidden if they decide to leave the wealth with companies where they are shareholders. With my fixed 1% tax approach, it really doesn't matter whether the financial assets are described as belonging to the individual, or to the company of which they are an owner. 

If I can just find some figures on the amount of wealth that has been transferred to trusts, this would be even more effective as a strategy. There would no longer be an incentive to hide wealth in companies or trusts, because the tax rate would always stay the same. It's simple, easy to understand, and very difficult to avoid. 

The UBS Global Wealth Report for 2025 - around $492 trillion in 2024, increasing to over $600 trillion in 2030?

 The latest version of the UBS Global Wealth Report for 2025 can be downloaded here. It's full of fasciniating insights. Slightly oddly, they don't give a number for the total amount of indivdiual wealth like they did last year ($471 trillion). The overall pyramid of wealth can be seen in this figure. 

 If you add up the numbers of people in each slice, you reach 3.808 billion which suggests that not everyone on the planet is included in the analysis. The total of net wealth comes to $470.51 trillion, which is strangely the number they provided in last years' report. 

As everyone knows, much of the wealth is in the hands of just few people - 15 with net wealth of more than $100 billion, 16 between $50 and $100 billion, and 2860 other billions with between 1 and 50 billion. 

Although the total figure seems the same as the previous year, you can see from this graph of the annual year on year changes that there was a 4.6% increase - suggesting that the actual total should be around $492 trillion.  

 Taxing all that at 1% a year would, at a stroke, provide the $5 trillion needed to tackle climate change.  While there have been a few blips (financial crash, covid), the report states that "Overall, total wealth net of debt and net of inflation, has risen at a compound annual growth rate of 3.4% since 2000". And they "expect this dynamic to continue throughout the second half of the decade."  This suggests that the figures could be as follows, depending on whether we use the average increase since 2000 (3.4%) or the increase in just the last year (4.6%):

That's an increas of over $105-146  trillion by the end of the decade. Would it be so terrible if less than a third of that increase was siphoned off to save our planet?  Since the wealthy are increasing their wealth anyway by 4.6% a year, they will still be a lot richer at the end. 

 And, of course, the increase in personal net wealth is heavilly concentrated among the ultra rich, as the report shows very clearly. 

The report talks about the 52 million EMILLIs  - or Everyday Millionaires - who have net wealth of 1 to 5 million dollars.But there is another graph showing the change in both average and median wealth for a range of countries. There are some dramatic differences. 
 

The average wealth figure essentially tells you whether the average person has increased their wealth. But when the median wealth increass much more than the average, it means that it is the richest half of the population that is getting most of the benefit. 

One of the most telling charts is the average and median wealth for the top 25 countries. The average figures can be used directly to determine how much would be raised by a 1% annual tax in each country. You just multiply by the number of adults. 

So, many thanks again to UBS for providing this invaluable data. 

Differences with Richard Murphy #3 - Taxing Net Wealth wherever it is found is much simpler than 30+ modifications to UK taxation

 I'm a big fan of Richard Murphy's work - he is doing a truly remarkable job, and his videos are always very clear. 

That said, I don't agree with everything he says, and this is the third post in my series about where I disagree with Richard Murphy. I've already talked about our differences on whether Modern Monetary Theory's description of money creation is realistic,  and the fact that he seems to ignore the potential of using Financial Transaction Taxes. Today I want to address what might be our biggest disagreement of all - the best approach to taxing wealth.

Richard has produced his monumental Taxing Wealth Report 2024. It's an impressive piece of work - 439 pages of detailed analysis proposing over 30 different reforms to UK taxation that could raise around £90 billion annually. But Richard explicitly argues against wealth taxes. He says wealth taxes won't work and are unnecessarily complex. I profoundly disagree.

Let me explain why a universal 1% annual tax on net wealth - applied to every entity globally - would be dramatically simpler than Richard's approach while generating vastly more revenue for addressing global challenges.

Richard's approach requires implementing over 30 separate reforms. We're talking about restricting pension tax relief to basic rate, which would raise £14.5 billion, Investment income surcharges worth £18 billion,  National insurance reforms worth £12.5 billion, Capital gains tax alignment worth £12 billion, Multiple inheritance tax changes, Corporation tax administration reforms, VAT exemption removals, Council tax modifications, Student tax abolition, plus dozens of smaller changes. These are all sensible ideas - with which I have no real disagreements. 

Each of these reforms requires separate legislation, implementation systems, compliance monitoring, and enforcement mechanisms. The administrative overhead alone would be enormous. Compare this to my proposal: "Pay 1% of your net assets annually, wherever they are held." That's it. One simple rule.

Now, Richard's £90 billion target is significant for the UK, but it's completely inadequate for global challenges. Climate action requires $5-7 trillion annually. Global poverty elimination needs $3-4 trillion annually. Universal healthcare access requires $8 trillion annually. Richard's entire UK program could fund climate action for approximately 5 days per year. We need solutions that match the scale of the problems.

Richard raises three main objections to wealth taxes, but none of them apply to my approach. First, he worries about valuation problems - how do you value private companies, art, and other assets? But I've already solved this by focusing on reported net assets. Anyone can see the net assets for 10,568 publicly traded companies by looking at the CompaniesMarketCap site. It shows that they currently have $48.14 trillion in net assets that is already reported and audited.  And the site allows you to select the 440 companies in the UK that have positive net assets - they total $1.936 trillion  - around £1.4 trillion. One percent of that is already £14 billion.  Here is a list of just those UK companies with Net Assets exceeding £1 billion. 

 Private companies in most jurisdictions also file financial statements showing their net assets. There's no valuation guesswork needed - these figures already exist. And in most countries, even private companies have to produce details reports on assets and liabilities, meaning that with no additional effort, it would be simple to calculate net wealth for such companies - it's just assets minus liabilities. 

In the UK, all private limited and public companies must file their accounts at Companies House and those annual accounts will contain a profit and loss account, as well as a balance sheet recording the assets and liabilities of the company. And there are currently 4.6-5.1 million companies registered in the UK. The accounts have already been done - and calculating 1% of net assets is trivial. And, amazingly, anyone can download all of those financial statements for just £1 each by going to this website!

I founded a company called SpiketNet Technology in France in 1999. For18 years, I attended the annual shareholders meeting where we got the full financial details. But, as with many companies, we actually had essentially no net assets - a few tables, chairs and computers! We rented the office space, and most of the money went in salary costs. We would have never paid anything under such a scheme.  I suspect that a large proportion of the 5 million UK companies would have few or no net assets. 

Anyone can get the annual financial reports of any French company by going to this site, and paying €195 - a lot more than in the UK.  

For individual net wealth, Richard worries about determining the value of property. But, there are plenty of places where you can get estimats of the value of property in the UK. They include Zoopla, RightMove, and MousePrice. There are also House price calculators from Nationwide and Halifax and the Government's Land Registry keeps records of all property transactions. I really don't think it would be unrealistic to get reasonable estimates for all property in the UK. If you can get a free property valuation instantly from your computer, how is this an administrative burden for a wealth tax?

Richard also worries about how to determine the wealth of individuals that own yachts, jewelry, art etc. For me, that's not a real problem. Just charge 1% of the insured value. Sure, people may choose not to insure their goods, but would you not insure your yacht to save 1% of its value? 

Second, Richard worries about discovery problems - how do you find hidden wealth? My "no exceptions" rule eliminates this entirely. Hidden in a trust? The trust pays 1%. Disguised in a company? The company pays 1%. Held personally? The individual pays 1%. Stashed offshore? Still pays 1% globally. Wealthy people can't hide wealth by moving it between entities because every entity pays the same rate. And, if we could get the 1% tax implemented globally, there would literally be nowhere to hide financial wealth. 

Third, Richard claims wealth taxes require "armies of tax inspectors." But my system is way simpler than current taxation. No complex income calculations needed. No capital gains timing issues. No allowances or exemptions to police. Just: "What are your net assets according to your financial statements? Pay 1%."

Here's the thing - Richard himself proves global tax coordination is possible. His work on country-by-country reporting is now implemented in over 90 countries. If we can coordinate complex multinational tax reporting, we can certainly coordinate a simple 1% rate on net assets. The OECD Global Minimum Tax, implemented by 136 countries, shows that ambitious global tax coordination is not only possible but actively happening.

My approach targeting global wealth could generate enormous revenue. Corporate net assets total $48+ trillion from just the largest companies. Individual wealth globally in 2023 was $471 trillion according to the UBS Global Wealth Report for 2024, but  the 2025 edition of the report shows that the total increased by a futher 4.5% since then, bringing the total of at aleast €492 trillion.  Government sovereign wealth funds now total  $14.368 trillion. Institutional assets from universities, foundations, and others total $2+ trillion. We're looking at a total potential base of at least $556 trillion. And that number doesn't include net wealth of private companies and trusts. An annual 1% tax would generate well over $5.56 trillion. That's 60 times larger than Richard's £90 billion target, using a single, simple mechanism rather than 30+ complex reforms.

Richard's approach, while technically sound, suffers from three fundamental limitations. There's a scale mismatch - £90 billion cannot address $5 trillion climate challenges. There's complexity overhead - 30+ reforms create massive administrative burden. And there's national limitation - UK-only solutions can't address global problems.

Richard argues his approach is more "pragmatic," but pragmatism that can't address the scale of the crisis isn't pragmatic - it's defeatist. We can either spend years implementing 30+ complex UK tax reforms to raise £90 billion, or coordinate a single global 1% wealth tax rate to raise $5+ trillion.

Richard worries about the political difficulty of global coordination. But climate change, technological disruption, and global inequality don't respect national borders. These challenges require global solutions. The financial infrastructure already exists. Most wealth is already measured and reported through existing accounting systems. We don't need to invent new valuation methods - we need the political will to apply a modest rate to existing data.

I don't want to be Richard's opponent - I want him to be an ally. His expertise in tax justice and his success with global tax coordination make him exactly the kind of person we need for this effort. Richard's detailed analysis proves that comprehensive tax reform is both technically and politically feasible. The question is whether we're ambitious enough to apply that same rigor to solutions that match the scale of 21st-century challenges.

The climate crisis won't wait for incremental UK tax reform. Global inequality won't be solved by optimizing around the edges of existing systems. We need transformational solutions for transformational times. A universal 1% wealth tax isn't just technically simpler than 30+ tax reforms - it's one of a very limited number of appraoches that can generate the resources needed to address the challenges ahead. The other one would be Financial Transaction Taxes. 

What do you think? Should we be optimizing existing tax systems or designing new ones for the challenges we actually face? I'd love to hear your thoughts.

Differences with Richard Murphy #2: Why not use a tiny Financial Transaction Tax to remove excess money from the system?

As I have said before, I agree with Richard Murphy on the vast majority of the points he makes in his long series of very clear and informative videos. 

That said, in my recent posts, I have been arguing that while Modern Monetary Theory is a very interesting idea, Richard is wrong when he says that it accurately describes the current functioning of the UK economy. Specifically, Richard claimed again in a video he posted this morning that "there isn't a shortage of money supply. In fact, as modern monetary theory points out ...  governments create all the money that we use".

I'm sorry. The truth is that the vast majority of money in circulation is created by commercial banks when they make loans. And, in my opinion, this also applies when the 18 GEMMs, that have exclusive purchasing rights,  buy UK treasruy bonds, or gilts. This is because there is no requirement for them to use pre-existing money.  

But I would agree with Richard that the UK government certainly could create the money supply by getting the Bank of England to credit the Treasury with the money its needs - as proposed by MMT. And the fact that the UK is no longer bound by article 123 of the Lisbon Treaty makes this even more feasible.

Giving the GEMMs the exclusive right to buy up bonds has the consequence that UK taxpayers ended up paying £105 billion in interest charges in 2025. The total amount of taxpayer money handed over between 2000 and 2025 comes to a staggering €1.21 trillion. 

Richard then proposes that the basic aim of taxation is not to provide funds for governent spending, but rather to remove excess money from the system to prevent inflation. That description could be applied to any of the taxes that the UK government imposes.  Just for clarity, here is a breakdown of the main types of taxes used in the UK in 2024-2025.

Total HMRC Tax Receipts: £858.9 billion in 2024-25, an increase of 3.7% from the year before, originating from 

1. Income Tax (including Capital Gains): £301 billion (35.0%)
2. National Insurance Contributions: £172.5 billion (20.1%)
3. VAT (Value Added Tax): £170.6 billion (19.9%)
4. Corporation Tax: £91.6 billion (10.7%)
5. Other Business Taxes: £97.7 billion (11.4%) 
6. Other smaller taxes: ~£25 billion (2.9%)

 I'm not sure whether any of these are specifically involved in removing excess currency from the economy. None of them include a mechanism that would allow the Bank of England to control the money supply directly. 

 So, here is my suggestion, and I would love to know what Richard thinks.

The Bank of England could indeed provide all the money the treasury needs - and follow the MMT idea. But, in addition, I would like to see the Bank of England directly responsible for imposing a minuscule Financial Transaction Tax on all sterling denominated transactions - ideally, wherever they occur in the world. The rate of the tax could be continuously varied to ensure that the money supply is optimal.  It's a proposal that I have been making for over a decode - see for example this post from 2014

I've used the BIS figures to demonstrate that there were over $18 quadrillion of transactions globally in 2022, a figure that was  up 13.2% on the figure for 2021 ($15.9 quadrillion). We will see what the figures will be for 2023, 2024 and 2025, but I think we can assume they will be even more eye-watering. 

The next question is what proportion of those numbers correspond to transactions involving sterling? The Bank of England did a survey of market activity in April 2025 that the average daily UK FX turnover reached a record high of $4,045 billion, representing a 26% increase relative to turnover recorded in the October 2024 survey. This constituted the largest survey-on-survey increase since 2013. 

For those figures, transactions that involved GBP constitute about 12% of the total - a figure that fits with the BIS Triennial survey for 2022. Let us suppose that the Bank of England could impose a tiny FTT on 12% of $18 quadrillion - over $2 quadrillion. How much money could be removed from the system?
Well, even with a tax of just 0.05%, it would generate around $1 trillion, roughly equal to the entire tax revenue of the UK government. 

In the context of MMT, the aim is not necessarilly to replace the existing tax system. Rather, the idea is to show that the Bank of England would have plenty of scope for keeping the money supply under control. 

My proposal is that everyone using sterling would pay the tax - it's effectively just a tiny service charge imposed by the Bank of England for using the currency. Anybody making bank transfers in Sterling, or using a credit card to pay in Sterling would pay. But the amount (0.05%) would be nothing compared with the 1-3% merchant fees that the credit card companies impose on us. 

Some might imagine that the high-frequency traders that are responsible for the vast majority of the transactions would shift to using other currencies. Frankly, I don't think that would be a problem for the UK - it would tend to reduce the volatility in the system. 

 One of the advantages of such a system is that the value of the FTT would be directly set by the Central Bank - and not used to raise money for the Treasury. I think that this would make the MMT model much simpler to defend. 

My entire blog in pdf form - Saving the World 2010-2025

 It's been a couple of years since I last converted my blog into a searchable pdf file, and I noticed that the link that I provided for downloading the file was broken. 

But, I've just fixed both problems. And you can now download the entire blog as a 24MB pdf file using this link or clicking the link in the panel on the right. 

It now stretches to over 1100 pages (!), and the table of contents alone is 18 pages long. But the document is full of links so that you can go directly to a particular post by clicking. The hyperlinks in the text should also work, although it's quite likely that some of the earlier links don't work anymore. 

 I doubt that many people will do more than just skim through it. But, it's searchable. So if you want to find a particular topic, it should be easy enough. 

The QE Profit Scam: Why the Bank of England's Secondary Market Purchases Prove the System is Rigged

I've discovered the smoking gun that proves the UK's government debt system is the biggest financial scam in British history. Academic studies by Joyce et al. (2011) show that the Bank of England's first £200 billion of QE purchases reduced gilt yields by approximately 100 basis points, while Bridges and Thomas (2012) estimate asset price increases of around 20%. Joyce and Tong (2012) found yield reductions of up to 120 basis points in the 15-20 year maturity range.

Think about what this means. When the Bank of England announced QE purchases, gilt prices soared. The banks that had exclusive rights to buy these gilts at auction - the 18 Gilt-Edged Market Makers - suddenly found themselves sitting on assets worth 15-20% more than they'd paid. This isn't market economics. This is a rigged casino where the house always wins.

Here's how the scam works. Only 18 banks can participate in gilt auctions - no pension fund or foreign government can buy directly from the Treasury. So we've created an artificial monopoly. Then the same central bank that forced the Treasury to issue debt promises to buy that debt on secondary markets, pushing prices up by 15-20% and guaranteeing massive profits for the banks.

Under banking regulations, UK gilts carry a zero risk weight, meaning banks need no capital to buy unlimited quantities. They can create new money from thin air to purchase them with no regulatory limits. The result? Banks create money to buy government debt, the central bank inflates the value by 15-20%, banks pocket the profits while taxpayers pay £105 billion annually in interest.

And now it gets even better for the banks. The Bank of England is currently selling gilts from its QE portfolio through "quantitative tightening," pushing prices down and creating fresh profit opportunities. Banks can buy cheap gilts from the Bank of England's fire sale, knowing the government will keep issuing more debt they'll have exclusive access to purchase.

Here's the ultimate irony: when the Bank of England holds gilts, the Treasury pays interest to the Bank, which returns those payments to the Treasury - essentially creating a closed loop with no net cost. But the Bank claims it must sell these gilts to "create space for future QE operations." This is costing taxpayers £24 billion annually in losses, with total expected losses between £50-130 billion over the programme's lifetime. The Treasury Committee concluded that the Bank "has taken a leap in the dark" with QT, admitting "experts are divided regarding the risks."

Here's what really gets me angry. Since Brexit, the UK is no longer bound by EU Article 123, which prohibited direct central bank financing. The government could simply have the Bank of England create money directly for public spending, eliminate the middlemen, and save the £105 billion annual interest payments. Instead, we maintain a system designed in Brussels to benefit European banks even though we're no longer bound by European law.

Some ask, "Can't we reform this?" But the system is working exactly as designed. The QE profit mechanism proves this isn't a bug - it's the feature. Each "reform" would undermine the fundamental structure because extracting taxpayer wealth is the system's primary function.

The Bank of England openly stated it wanted to push up asset prices through QE. What they didn't mention is that these "asset price effects" are direct transfers from taxpayers to financial institutions. When gilt prices rise by 15-20%, future taxpayers pay higher costs while banks pocket the gains.

No manifesto ever promised voters we'd let 18 banks create money to buy government debt and pay £105 billion annually in interest on money created from nothing. That £105 billion could double the NHS budget, build 350,000 homes annually, or give every household £3,750 per year.

The solution is simple: end the GEMM monopoly, stop unnecessary gilt issuance, use Bank of England money creation directly, and save £105 billion annually. Post-Brexit, no EU law prevents this. The Bank already creates money - it did £895 billion for QE. The Treasury could credit government accounts directly with no intermediaries, no interest payments, no bank profits.

The choice is stark: continue paying £105 billion annually to maintain a rigged system benefiting foreign investors and banks, or use our monetary sovereignty to fund public investment directly. There is no middle ground. The system cannot be reformed because the wealth extraction isn't a bug - it's the entire point. It must be abolished.

Where did the £1.21 Trillion in Interest Payments Go?

 

Between 2000 and 2025, UK taxpayers will have paid £1.21 trillion in interest payments on government debt. That's £1,207,800,000,000. To put this in perspective, that's enough to fund the NHS for eight years, or about £46,000 for every household in the UK.

But where did all this money actually go? Who received these vast sums extracted from British taxpayers over a quarter century?

The shocking answer is that the UK government refuses to tell us. When citizens have tried to get this information through Freedom of Information requests, the Debt Management Office hides behind claims of "commercial sensitivity" and "data protection" (https://www.whatdotheyknow.com/request/overseas_holdings_breakdown_by_c). Apparently, knowing who receives £105 billion annually courtesy of UK taxpayers might upset someone.

Despite this deliberate opacity, we can piece together the picture from various sources. According to the Office for Budget Responsibility, at the end of September 2024, the ownership of UK government debt breaks down roughly as follows:

• Overseas investors: 32% of total gilt holdings
• Bank of England (QE programme): 24%
• UK insurance companies and pension funds: 21%
• UK banks and building societies: 6%
• Other UK holders: 17%

Let's follow the money.

Foreign Holders - The £380-400 Billion Transfer

With foreign holders owning around 30-32% of UK debt throughout this period, approximately £380-400 billion of that £1.26 trillion has left the country entirely. According to research from CEPR, "foreign investors only hold about 25-30% of UK government debt" but this still represents massive capital outflows (https://cepr.org/voxeu/columns/sovereign-subsidy-zero-risk-weights-and-sovereign-risk-spillovers).

While the UK government won't tell us exactly which countries hold our debt, we know from the global pension fund data that the largest pension markets are:

• United States: Controls 65% of global pension assets
• Canada: Major player in global pension funds
• Japan: Significant holder of foreign government bonds
• Netherlands: Massive pension funds relative to country size
• Switzerland: Ditto

Source: Global Pension Assets Study 2024 (https://www.thinkingaheadinstitute.org/research-papers/global-pension-assets-study-2024/)

It's reasonable to estimate that US and Canadian pension funds alone have received £130-160 billion of UK taxpayer money since 2000. British workers struggling with the cost of living crisis are literally funding comfortable retirements for Americans and Canadians.

UK Banks - The Money Creation Scam

Here's where it gets truly scandalous. UK banks don't need to use existing money to buy government bonds. They create it. As we've established, under Article 114(4) of the Capital Requirements Regulation, UK government bonds carry a 0% risk weight for banks (https://www.eba.europa.eu/single-rule-book-qa/qna/view/publicId/2021_6160).

This means:

• Banks need zero capital to hold unlimited amounts of UK government debt
• They can create new money from nothing to buy these bonds
• They face no regulatory constraint on how much they hold

The 18 Gilt-Edged Market Makers (GEMMs) have exclusive rights to buy government bonds at auction (https://www.dmo.gov.uk/responsibilities/gilt-market/market-participants/). These include:

• UK banks: Barclays, HSBC, Lloyds, NatWest, RBS
• Foreign banks: Goldman Sachs, JP Morgan, Deutsche Bank, BNP Paribas, and others

Together, UK banks and foreign banks operating in the UK have likely collected £250-315 billion of that £1.26 trillion - money they created from thin air and lent to the government at interest.

UK Pension Funds and Insurance Companies

According to the OBR's July 2025 Fiscal Risks and Sustainability report, "private sector DB schemes held 52 per cent of their total assets in the form of gilts" (https://obr.uk/frs/fiscal-risks-and-sustainability-july-2025/). These holdings generated approximately £260-280 billion in interest payments over our period.

But here's the inequality angle: defined benefit pension schemes are increasingly rare and concentrated among higher earners and older workers. The government claims there's no money to properly fund the state pension, yet it's paid over a quarter of a trillion pounds to already well-funded private pension schemes.

The Bank of England Shell Game

The Bank of England, through its quantitative easing programme, owns about 24% of UK government debt. The interest paid to the BoE (approximately £300 billion of our total) technically stays within the public sector. But even this isn't straightforward - the unwinding of QE means the government is now paying higher interest rates on the reserves created, effectively transferring money to commercial banks that hold reserves at the BoE.

What Could We Have Done With £1.26 Trillion?

Instead of enriching foreign pension funds and banks that create money from nothing, that £1.26 trillion could have:

• Eliminated student debt (currently £206 billion) six times over
• Built 4.2 million council houses at £300,000 each
• Installed solar panels on every home in Britain and made the country energy independent
• Given every UK household £46,000
• Funded a genuine "levelling up" of the entire country

The Great Silence

Perhaps most revealing is what politicians don't talk about. When did you last hear a Prime Minister or Chancellor explain that we're paying £105 billion this year in interest, with a third going overseas? When has anyone in government admitted that banks create the money they lend to the government from nothing, then collect interest on it forever?

Both Labour and Conservative governments maintain this system. They'll argue about a few billion here or there on public services, but the £105 billion annual transfer to bondholders is treated as untouchable, inevitable, almost a law of nature.

It's not. It's a choice. A choice to prioritize bondholders over citizens, banks over public services, the wealthy over everyone else.

The Solution Exists

The UK has the sovereign power to create its own money. The Bank of England proved this with £895 billion of quantitative easing. Instead of maintaining a system where private banks create money and charge us interest on it, we could:

• Use direct monetary financing for public investment
• Create a national investment bank that returns profits to the public
• End the GEMM monopoly on government financing
• Save £105 billion annually for public services

The £1.21 trillion transfer since 2000 represents one of the largest wealth extractions in history. It's not economics - it's plunder. And it continues to increase every year, so that we UK taxpayers can expect to fork out £122 billion by 2030.

Until we demand transparency about where our money goes and why we're paying banks interest on money they create from nothing, this extraction will continue. The first step is understanding the scam. The second is ending it.

---

All data from official UK government sources: Office for Budget Responsibility, UK Debt Management Office, Bank of England, Office for National Statistics, House of Commons Library, European Banking Authority.

The €335 Billion European Heist: How Banking Cartels Across Europe Extract Wealth from 450 Million Citizens

Following my exposé of the UK's £105 billion GEMM scam, let's lift the lid on the even bigger racket operating across the European Union

European taxpayers paid €335 billion in interest payments in 2024 - a staggering 15.6% increase in just one year. That's €745 for every man, woman and child in the EU. But where does this money go? And why does a monetary union with its own central bank need to pay private banks hundreds of billions in interest?

The answer exposes one of the greatest financial scams in history.

The Same Scam, 27 Times Over

Just as the UK has its 18 GEMMs (Gilt-Edged Market Makers), nearly all EU countries have their own exclusive club of "Primary Dealers" - banks with monopoly rights to buy government bonds at auction:

• France: 15 Spécialistes en Valeurs du Trésor (SVTs)
• Germany: 25 members of the Bund Issues Auction Group
• Italy: 16 Primary Dealers for Italian government bonds
• Spain: 21 Market Makers and 6 Primary Dealers
• Netherlands: 14 Primary Dealers

These aren't local banks serving their communities. The same names appear again and again: Goldman Sachs, JP Morgan, Deutsche Bank, BNP Paribas, Barclays, Société Générale. It's a transnational banking cartel with exclusive access to create money for governments.

The Zero Risk Weight Scam Goes European

Under Article 114(4) of the EU Capital Requirements Regulation (CRR), ALL European government bonds carry a 0% risk weight when held by banks in their domestic currency. This completely overrides the Basel Banking regulations that would normally require capital based on actual risk. This means:

• Greek government bonds (rated BBB) - 0% risk weight
• Italian government bonds (rated BBB) - 0% risk weight
• German government bonds (rated AAA) - 0% risk weight

All treated identically despite vastly different default risks!

The Perverse Incentive

Here's where it gets truly insane. Since Greek and Italian bonds pay HIGHER interest rates (to compensate for their higher risk), banks actually have an incentive to:

1. Create money from nothing (remember: 0% capital requirement)
2. Buy the riskiest EU government bonds for maximum yield
3. Collect higher interest from taxpayers in struggling countries
4. Face zero regulatory penalty for loading up on risky debt

A German or French bank can create unlimited euros to buy Greek debt paying 3.4% interest instead of German debt paying 2.7%. More risk, more reward, but still zero capital required!

The Double Standard

When normal citizens or pension funds buy government bonds, they must use real money - savings they've earned and accumulated. When they buy Greek bonds, they take real risk with their real money.

But when banks buy the same bonds:

• They can create the money from thin air - as they do when making standard loans
• They need no capital to back it
• They face no regulatory constraint on how much they buy
• They collect billions in interest from taxpayers

A French bank can create €10 billion from nothing to buy Italian or Greek debt, still at 0% risk weight, and collect hundreds of millions annually in interest.

Follow the €335 Billion

Where do European taxpayers' interest payments actually go?

Based on patterns similar to the UK:

• €100-130 billion likely goes to foreign investors - pension funds in the US, Canada, Asia, and sovereign wealth funds
• €70-90 billion to European insurance companies and pension funds - predominantly benefiting wealthy retirees with private pensions
• €60-80 billion to the banking sector - the very banks that created the money from nothing
• The remainder to various European institutional investors

Just as British taxpayers fund American and Canadian retirements, European taxpayers are doing the same on a massive scale.

The Great Lie of "Market Discipline"

European politicians constantly invoke "the markets" to justify austerity. "The markets demand fiscal discipline!" "We must satisfy the bond markets!" But what markets?

When the "market" consists of banks that can:

1. Create unlimited money to buy bonds (zero risk weight = no capital constraint)
2. Never have to sell (they can hold to maturity and collect interest forever)
3. Face zero risk (government bonds in their own currency can't default)

Where exactly is the market discipline?

The ECB's Fake Constraint

"But the ECB can't lend directly to governments!" cry the defenders of this system. "It's Article 123 of the Lisbon Treaty!"

True. But this "constraint" is a deliberate choice to force governments to borrow from private banks who create the money anyway. It's like saying "I can't walk through this door" while ignoring the identical door right next to it marked "Private Banks Welcome." 

The ECB proved during the pandemic and sovereign debt crisis that it can buy unlimited government bonds on secondary markets. The money creation happens either way - the only question is who profits.

The Democracy That Never Was

No European citizen ever voted for this system. No referendum ever asked: "Should we let private banks create money from nothing and charge taxpayers €335 billion annually in interest?"

Yet whether you vote for socialists in Spain, conservatives in Germany, or populists in Italy, this system remains untouchable. The banking cartel's right to create money and collect interest transcends all democratic choice.

The Solution: People's Banks in Every Nation

Here's the beautiful irony: while the ECB cannot lend directly to governments, there's nothing stopping EU countries from creating public banks that can. A People's Bank in each country could:

1. Be capitalized by the government (as many public banks already are)
2. Participate in government bond auctions (no rule prevents this)
3. Create money to buy government bonds (just like private banks do now)
4. Return all interest payments to citizens (instead of private shareholders)

This isn't radical - it's exactly what private banks do now, just with public ownership.

What Could Europe Do with €335 Billion Annually?

Instead of enriching global bondholders and banking cartels, €335 billion could:

• End homelessness across Europe (estimated cost: €20 billion)
• Provide free university education for every European student
• Build a genuine green energy infrastructure
• Establish universal childcare across the continent
• Give every EU household €2,000 per year

The National Breakdown of the Scam

Let's look at some specific countries:

France pays approximately €50 billion annually in interest:

• €15-20 billion likely leaves the country
• €10-15 billion to French banks that created the money from nothing
• French taxpayers funding foreign retirements while their own services are cut

Italy pays approximately €65 billion annually:

• Despite having its own currency before the Euro, now trapped in a system where Italian banks create money that Italian taxpayers must pay interest on

Germany pays approximately €40 billion annually:

• Even the "fiscally responsible" Germans are caught in this trap
• German banks profit while German citizens are told to tighten their belts

Breaking the Cartel

The solution doesn't require treaty changes or ECB reform. Each country can:

1. Create a national People's Bank tomorrow
2. Have it participate in bond auctions alongside private banks
3. Gradually replace private debt with public debt where interest returns to citizens
4. End the €335 billion annual extraction

The private banking cartel maintains its monopoly only because politicians lack the courage to challenge it. The moment one country shows it can be done, the whole edifice crumbles.

The Ultimate Irony

The European Union was sold as bringing prosperity to its citizens. Instead, it has created the perfect mechanism for extracting wealth from 450 million Europeans for the benefit of:

• Global financial elites
• Foreign pension funds
• A transnational banking cartel

The very banks that caused the 2008 financial crisis, required massive taxpayer bailouts, and destroyed millions of lives, now collect €335 billion annually from European taxpayers for creating money from thin air.

Conclusion: End the European Debt Scam

The UK's £105 billion GEMM scam is replicated and amplified across Europe. €335 billion annually - and rising 15.6% in a single year - flows from European taxpayers to banks and bondholders who did nothing to earn it except create digits on a computer.

This isn't about left or right, North or South, fiscal hawks or doves. This is about ending a system where private banks have captured the money creation power of democratic states and use it to extract tribute from citizens.

Every European should be asking their representatives:

1. Why do private banks have monopoly rights to create our money?
2. Why do we pay €335 billion in interest on money created from nothing?
3. Why don't we create People's Banks to keep this money in public hands?

Until these questions are answered, European democracy remains a facade behind which banking cartels extract wealth from citizens with perfect efficiency and zero risk.

The scam ends when citizens understand it and demand change.

€335 billion annually. 15.6% increase in one year. Zero risk for banks. Maximum extraction from taxpayers.

This is not economics. This is theft.

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Sources: European Central Bank, Eurostat, National Debt Management Offices of EU Member States, 2024 data

The £105 Billion Scam: How 18 Banks Create Money from Nothing and Charge UK Taxpayers Interest on It

 

A follow-up to my critique of Richard Murphy's MMT position

Richard Murphy is right that the UK government could, in theory, have the Bank of England create all the money it needs. But he misses the scandalous reality: instead of using this sovereign power, the UK has handed money creation for government spending to 18 private banks who collect £105 billion annually from taxpayers for this privilege.

The Comfortable Club of 18

Meet the Gilt-Edged Market Makers (GEMMs) - the exclusive club of 18 banks with monopoly rights to buy UK government bonds at auction. This isn't some historical accident; it's a deliberately maintained system that ensures every penny the government spends must first pass through these private gatekeepers.

These aren't your high street banks. They include giants like Barclays, Goldman Sachs, JP Morgan, and Deutsche Bank. And here's the kicker: they don't even need to use existing money to buy government bonds. They can create it.

The Magic of Zero Risk Weights

Under banking regulations, UK government bonds (gilts) carry a 0% risk weight. This means banks need exactly zero capital to hold them. Compare this to:

• Mortgages: 50% risk weight (banks need capital backing)
• Business loans: 100% risk weight (full capital requirements)
• Government bonds: 0% risk weight (no capital needed whatsoever)

This creates an infinite money creation loophole. A GEMM can create £1 billion, £10 billion, or £100 billion in new money to buy gilts without any regulatory constraint. There's literally no limit.

The £105 Billion Annual Transfer

In 2024-25, UK taxpayers will pay approximately £105 billion in interest on government debt. Let me break down where your money goes:

• £32-34 billion leaves the country - paid to foreign investors including pension funds in the US, Canada, and elsewhere
• £25 billion goes to the Bank of England - but this is just the government paying itself
• £22 billion goes to UK pension funds and insurance companies - benefiting mainly those with large private pensions
• The remainder goes to UK banks and financial institutions - including our GEMM friends

The Scam Exposed

Here's how the circular fraud works:

1. Government needs to spend money (on NHS, schools, infrastructure)
2. Instead of having the Bank of England create it (which it absolutely could), the government auctions bonds
3. Only the 18 GEMMs can bid at these auctions
4. GEMMs create new money from thin air to buy the bonds (remember: 0% risk weight = no capital needed)
5. GEMMs can keep the bonds and collect interest forever, or sell them on for a profit
6. Taxpayers pay £105 billion annually in interest on this privately-created money

No Market Discipline

The government and financial media perpetuate the myth of "market discipline" - that the government must satisfy private investors to fund its spending. But when those "private investors" can create unlimited money to buy government debt, where's the discipline?

Even if pension funds, insurance companies, and foreign investors didn't want to buy gilts, the GEMMs could simply:

• Create the money to buy the entire issuance
• Hold it on their books (at zero capital cost)
• Collect guaranteed interest from taxpayers

Post-Brexit Sovereignty Ignored

Since Brexit, the UK is no longer bound by EU Article 123 (which prohibits central bank financing of government). The government could:

1. Have the Bank of England directly create money for public spending
2. Eliminate the GEMM middlemen
3. Save £105 billion annually in interest payments

Instead, we maintain a system designed to extract maximum rent from taxpayers for the benefit of:

• Foreign investors (£32-34 billion)
• Wealthy UK pension holders (£22 billion)
• Banks and financial institutions (£26 billion)

Richard Murphy's Blind Spot

This is where I fundamentally differ from Richard Murphy's MMT analysis. Yes, the government could create its own money through the Bank of England. But focusing on theoretical possibilities ignores the actual institutional reality: we've outsourced money creation for government spending to private banks who charge us £105 billion annually for the privilege.

MMT advocates are right about monetary sovereignty but often silent about this privatized money creation scam. The issue isn't whether the government can create money - it's that we've handed this power to banks who use it to extract enormous rents from taxpayers.

The Democratic Deficit

No voter ever agreed to this system. No manifesto ever said: "We promise to let 18 banks create money from nothing and charge taxpayers £105 billion annually in interest." Yet both Labour and Conservative governments maintain this arrangement while claiming there's "no money" for public services.

What Could £105 Billion Buy?

Instead of enriching foreign investors and banks, £105 billion could:

• Double the NHS capital budget
• Build 350,000 affordable homes annually
• Provide free university education for all
• Implement a genuine green transition
• Give every UK household £3,750 per year

The Solution Is Simple

1. Use the Bank of England's money creation powers directly for public spending
2. Stop the unnecessary gilt issuance for spending that could be directly financed
3. End the GEMM monopoly on government financing
4. Save £105 billion annually in unnecessary interest payments

Conclusion: End the Scam

The UK government has the sovereign power to create its own money. Instead, it maintains a system where private banks create money to lend to the government at interest, costing taxpayers £105 billion annually. This isn't economics; it's extraction.

Richard Murphy is right that we have monetary sovereignty. But until we confront the institutional reality of how that sovereignty has been privatized for bank profits, MMT remains an academic exercise while taxpayers continue funding one of history's greatest financial scams.

The question isn't whether the government can create money - it clearly can. The question is why we allow private banks to do it instead and charge us £105 billion annually for the privilege.

It's time to end the GEMM scam.

---

Note: All figures are from official UK government sources including the Office for Budget Responsibility, the Debt Management Office, and the Office for National Statistics for 2024-25.

Differences with Richard Murphy #1 - The Bank of England does not produce the money supply - although it could

 Richard is a big fan of Modern Monetary Theory (MMT), and has made several videos on the subject. He even has a playlist that currently contains 14 videos, devoted to the topic. 

The basic point is that the UK Government can effectively create as much money as it wants by telling the Bank of England to create it.  It did precisely this when it generated hundreds of billions to tackle the financial crisis in 2008-9 and also to cope with the COVID pandemic. 

I would agree with this. However, Richard goes further when he claims that ALL the money in circulation is created by the government.  Actually, what he says that the money is either created by the Government via the Bank of England, or by commercial banks under license. 

The critical question for me is whether the government really does control the amount of money created by commercial banks. In my opinion, there currently is no direct way for the government to control this. For a long time, I have been convinced by the arguments of the people at Positive Money who would say that roughly 97% of the money in circulation in the UK economy has been created by Commercial Banks when they make loans. Yes, the government COULD generate money via the Bank of England, but the reality is that it is commercial banks that do the money creation. 

 In other recent videos, Richard has been claiming that the government does not need to borrow money from the financial markets. Rather, selling bonds should be thought of as a way for the government to provide a safe place to for people to save financial resources. Effectively, if we accept that all the money in circulation has been created by the Bank of England, then providing a way to save that money is a very different way of understanding the situation to the standard view that our governments are forced to borrow. Richard would say that there is no need to borrow what you produced yourself. 

This is all very nice. And I would agree that the UK government shouldn't need to borrow from the financial markets at all. Unfortunately, that is not the way the system works at the moment.  

Currently, our governments typically emit bonds (gilts in the UK), which get bought up on the primary markets by a restricted set of Gilt-Edged Market Makers (GEMMs). Here is the current list

Banco Santander S.A. (London Branch)

Bank of Montreal (London Branch) - *Associate GEMM

Barclays Bank plc - †Strips Market Participant

BNP Paribas

Citigroup Global Markets Limited

Deutsche Bank AG (London Branch)

Goldman Sachs International Bank

HSBC Bank plc - †Strips Market Participant

J.P. Morgan Securities plc

Lloyds Bank Corporate Markets plc

Merrill Lynch International (Bank of America)

Morgan Stanley & Co. International plc

NatWest Markets plc - †Strips Market Participant

Nomura International plc

RBC Europe Limited (Royal Bank of Canada)

The Toronto-Dominion Bank - *Associate GEMM

UBS AG (London Branch)

Winterflood Securities Limited - †Strips Market Participant, **Retail GEMM

Individuals like you and me cannot buy gilts directly - we can only buy gilts on the secondary markets. 

So, looking at this list, it seems clear that essentially all the GEMMs are commercial banks. And my question to Richard is - do those banks have to have any money to be able to buy the Treasury Bonds? If they don't, when they buy up those bonds, they may keep the bonds for themselves. Here are the figures for UK Treasury Bond issuance over recent years. 

UK Gilt Issuance History (Annual Gross Issuance in £ billions)

Recent Years (Confirmed):

• 2025-26: £299.2 billion (planned)
• 2024-25: £299.6 billion (second-highest on record)
• 2023-24: £232 billion
• 2022-23: £169.5 billion
• 2021-22: £131 billion (approximately)
• 2020-21: £485.8 billion (record high - pandemic response)

Pre-Pandemic Period:

    Pre-pandemic average (2015-2020): Approximately £125 billion per year 

Now, in prinicple, those GEMMs are supposed to act as intermediaries to allow others to purchase the bonds.  However, it is clear there is no reason why a GEMM could not hang on to the Bonds that it has purchased. 

In principle, the GEMM could also use its own internal financial resources to purchase the bonds. But there is a crticial point. There is no obligation on them to use existing money to make the purchases. When they buy the bonds, they could perfectly well use the standard banking procedure of making a loan. 

 To be clear, if GEMMs can:

1. Purchase gilts without using pre-existing funds
2. Keep them indefinitely without selling to third parties
3. Create the purchasing power through accounting entries

Then this would constitute money creation in a very real sense.The key insight is that when a bank (as a GEMM) purchases gilts, it could theoretically:

1. Credit the government's account with newly created deposits (just as banks create deposits when making loans)
2. Add the gilts to its asset side of the balance sheet
3. Create a corresponding liability (the deposit) on the liability side

This is functionally identical to how banks create money through lending - they're creating purchasing power "out of thin air" through balance sheet expansion.

The whole GEMM system is supposed to allow the 18 different banks to compete to buy the bonds, thus ensuring that the UK Treasury gets a good deal. However; it seems to me to be clear that there is effecrtively no limit to the amount of money that could be created by the 18 GEMMs. It is hardly surprising that everytime the UK Debt Management Office auctions Bonds, there are typically plenty of buyers among the GEMMs. But again, I can't see any way of preventing the 18 GEMMs from simply taking turns to scoop up the bonds.  

 So, to return to my basic point of disagreement with Richard, I would agree that the UK Government COULD create all the money in the system. But the fact is that it is doesn't do that at the present time. Worse, I suspect that the bond markets could be a way of increasing the money in circulation that is effectively impossible to control. It would be much clearer if the entire bond market system was scrapped and the government do what Richard claims they can do accoriding to MMT - create the money supply directlly.  

I mentioned the figure provided by Positive Money who claim that 97% of the UK's money supply comes from commercial bank loans - and not the Central Bank. It turns out that this figure is still broadly correct. Here are the latest numbers

Central Bank Money (Base Money/M0):

• Notes and coins in circulation: Approximately £100 billion
• Bank reserves at BoE: Approximately £700-800 billion (hugely inflated due to QE)
• Total M0: Around £900 billion

Broad Money (M4):

• Total M4 money supply: Approximately £2.6-2.8 trillion
• In 2010, M4 was £2.2 trillion with only £47 billion in physical cash (2.1%)

The key calculation is that commercial bank-created money = (M4 - Physical cash) / M4 = (£2,600 billion - £100 billion) / £2,600 billion = 96.2%

In other words,  approximately 96-97% of money in circulation is created by commercial banks through lending.

What's fascinating is how QE has distorted the traditional picture:

Pre-2008 (Normal times):

• Central bank reserves were tiny (£20-30 billion)
• Banks created most money through lending
• The 97% figure was stable

Post-QE (2009-present):

• Central bank reserves exploded to £800+ billion
• But this money mostly sits idle in the banking system
• It doesn't circulate in the real economy
• The public still uses bank-created money for 96-97% of transactions

The critical point is that even though the Bank of England created £875 billion through QE (peak), this didn't change the fundamental fact that the money actually used in the economy is still overwhelmingly commercial bank-created money. The QE reserves mostly just:

• Sit in banks' BoE accounts
• Earn Bank Rate (currently 5.25%)
• Don't get lent out to the public
• Create a massive interest burden for the government

 So, I agree with Richard that the UK government could create the money needed to finance everything - but it's not currently what happens.