Biweekly Symposium No. 524: The Establishment of the National Debt and Fiscal System of the UK

Lecturer: Dr. LIU Zhongjing

Host: ZHAO Nong

Commentators: WANG Chaocai, SHI Cheng, JIANG Hao

Dr. LIU Zhongjing though most of the research on the British fiscal system was technical. A key factor of the micro-ecological system change should be take into account rather than a certain structure, institution, or measure.

In the early 17th and 18th century, UK did not invent a unique fiscal technique, or financial technology. In the 200 years during the Renaissance, the British national debt evolved rapidly, where the repercussions led to the destruction of the republic policy of the UK and the national debt system. The public debt institution was not merely a financial institution, or an economic institution, but an outcome of the political conglomerate’s evolution.

The stage of development made it necessary to introduce in the national debt system. After the two incidents of solvency in 1693 and 1697, according to the 1697 program, the national bonds could be converted in the Ministry of Treasury, or can be substituted by tax. That is to say, when tax was collected, people could submit the bond as a substitution. The establishment of the sinking fund of UK was a critical creation. After its foundation, a system of periodical debt payment system was built. Bonds were issued in times of war, and relieved in times of peace. With the market extending beyond UK, more and more processes were established which ensured the stability of the bonds. This pool is now connecting the majority of countries, especially those advanced economies.