Sajid Javid is Conservative MP for Bromsgrove and a former Deutsche Bank executive.
In his first conference speech as Shadow Chancellor, Ed Balls wants us to believe that Labour can be trusted with the nation’s finances.
He promised to set out “tough fiscal rules” at the next election to bring the budget back to balance and put the nation’s debt on a downward path.
I have to admit, if Alan Johnson had been on the podium today instead of Balls, these words would have had a little more credibility. With Balls, I have no faith.
This is the man who stood shoulder to shoulder with Gordon Brown for 13 years, driving our country towards economic ruin. During that time, our national debt tripled to over £900 billion, and we were left with the largest budget deficit in Europe.
Apart from taking the country to the brink of bankruptcy, what else did this record government spending achieve?
Workless household numbers that increased from 3.7 million to 3.9 million.
Cancer and stroke survival rates in England that shamefully lag behind virtually every other European country.
And, for 14 year olds, a fall in reading and maths standards from seventh in the world to 25th and 27th respectively.
His admission today that “we didn’t spend every pound of public money well” is a far cry from the apology he owes the country.
Balls now wants to prove his new found belief in fiscal rectitude. Calling for an immediate, unfunded, cut in VAT and a slowing in the pace of Government deficit reduction is an unusual way to demonstrate it. Indeed, spending pledges made by Balls would add nearly £90 billion a year to Britain’s deficit by the next election in 2015.
Whilst I don’t trust Balls for a second, let’s not be so unkind. Let’s put him to the test.
If it’s tough fiscal rules he wants, rules that actually bite, then he need not wait until the next election to set them out. He can join me in my campaign to cap Britain’s national debt by backing my private National Debt Cap Bill.
It’s already had a successful first reading in the House of Commons in July, and won the parliamentary backing of David Laws, John Redwood and Frank Field, not to mention two former advisers to George Osborne and four members of the Treasury Select Committee. The Institute of Economic Affairs, the Adam Smith Institute and The TaxPayers’ Alliance have also all given it a warm welcome.
My key point is this. The abiding lesson of the past few years is that a self-imposed limit on the sale of government bonds is far better than a limit imposed by the market. Just ask the leaders of Iceland, Greece, Ireland, Portugal and Italy.
A debt cap, which would restrict borrowing to a given percentage of GDP, would be no guarantee against such fiscal irresponsibility – but it would make it harder for politicians to rely on their favourite ruse of “buy now, pay later”.
At a minimum, my Bill would force a national debate where there has previously been only opacity and obfuscation. And ideally, it would have the same bracing effect as its American equivalent.
So, come on Mr Balls. If you’re serious about “tough fiscal rules”, why wait? You can back my National Debt Cap Bill, which is currently making its way through Parliament, right now.