MPs step in as UK ‘loses’ £50 billion in cash

Country misplaces the equivalent of three-quarters of all banknotes, which could be overseas or used for secret purchases.

Have a look down the sides of your sofa, because if you find some spare change it may help the Bank of England in its search for a missing £50 billion.

MPs have discovered that £50 billion of money issued by the Bank of England is unaccounted for. That represents three-quarters of all UK banknotes in existence.

The Bank says it is not its job to check what members of the public are doing with their money.

But MPs on the public accounts committee say there are implications for public policy and the public purse if cash is not monitored closely.

The committee says the money could be used overseas, held in the UK as unreported household savings or used for cash-in-hand purchases in the ‘shadow economy’.

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Meg Hillier, chair of the committee, queried why the Bank was not curious about where the money it issues has gone.

She says: “It needs to be more concerned about where the missing £50 billion is.

“Depending where it is and what it’s being used for, that amount of money could have material implications for public policy and the public purse. The Bank needs to get a better handle on the national currency it controls.”

The missing money has aroused mockery on social media:

Every church in England has a donation wall box at the back which no-one seems to have a key to. It is probably all in there. https://t.co/1CPyptsPtM

— Fr. Eddie Green SHS ?SC (@EdwardBGreen) December 7, 2020

I assume my answer will be the same as most people's - I 'ritually kill' any spare change I have by bending and defacing it before offering it to the old gods by throwing it into a large body of water. Doesn't everyone do this...? ? https://t.co/A52w01CIWJ

— Dr Francis Young (@DrFrancisYoung) December 7, 2020

Richard Murphy, an accountant who runs blog Tax Research UK, said the money would soon be used if the Bank suddenly announced it will replace all banknotes at short notice over a maximum of a month.

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Murphy says: “It would then be the case that within a period of four weeks, at most, most literally the entirety of UK notes in issue would cease to be legal tender, and be replaced.

“During the four-week transition period old notes could, of course, be spent. 

“Replacement new notes, with a total value of about one-third of the sum previously in issue, could then be injected into the economy. Because that’s all we apparently need.”

Murphy says the vast majority of the notes would either be found or would become illegal, the cash would be identified and it would be harder for criminal trading or the shadow economy to operate.