It is a genuine pleasure to serve under your chairmanship, Mr Stringer, and it is a pleasure to take part in this debate. I congratulate my hon. Friend Lee Rowley on securing it. It is a pleasure to see Peter Dowd in Westminster Hall. As I go through my speech, no doubt he will not agree with the things I say, but that aside, I have tremendous respect for him.
The balanced budget rule is an important one, as it takes seriously the principle of responsible spending and enshrines it in a fiscal policy. It forces Governments to think through their spending priorities and decisions, and it contributes to more open, transparent and affordable budgeting. Countries across the world have adopted this approach, and with the exception of periods of war, economic crisis or natural disaster, they have maintained that decision.
Of course, there are different types of balanced budget rule and some Governments allow for different types of spending, or adjust their spending, depending on where they are in the economic cycle. When designing such rules, it is key that they are simple enough to be understood, followed and monitored, but flexible enough to be durable against the unforeseen economic shocks that can temporarily derail attempts to meet the goal. Indeed, if there is any short-term economic shock to the United Kingdom from, say, leaving the European Union, the Government should have the space to cut taxes in order to boost growth. The balanced budget rule also prevents profligacy, which Governments may choose to deploy to obtain votes.
One of the things that a balanced budget rule does help to do is to reduce waste. My hon. Friend the Member for North East Derbyshire referred to cheap political points, but some of the numbers that I am about to give are by no means cheap. I am referring, of course, to the last Labour Government. Although I will not give an exhaustive list of what they did, I will mention just a few things: £26 billion wasted on computer blunders; £18 billion wasted on ID cards; and £50 million wasted on an Assets Recovery Agency that only recovered £8 million in assets. The list goes on, and of course vanity projects can happen on either side of the political argument and under either party, so at all times there must be checks and balances.
However, incompetence also has a lot to answer for and I believe that the balanced budget rule would, more than our current system, prevent incompetence. Under the last Labour Government, Gordon Brown described himself as the “Iron Chancellor”. Well, he may have known a lot about iron, but he did not know much about gold, given the fact that he sold it at the worst possible time, wasting billions.
The last Labour Government talked about benefits, as does the Labour party now. Of course, as Stewart Hosie said, people who do not have an income of their own and rely on the Government for benefits to exist deserve to be supported. What Labour does not like to talk about when it comes to benefits is the £2.6 billion that was wasted on benefit fraud and errors. If anyone thinks that is bad, £57 million of that money was wasted on paying benefits into the accounts of people who were dead.
This country was ill-prepared for the 2008 financial crash and the situation was summarised quite succinctly by the former Chancellor, George Osborne, who said that Labour’s problem was that it failed to fix the roof while the sun was shining. The difficult decisions that this country has had to make since 2010 are due in part to the policies of that Labour Government. With the greatest of respect to the hon. Member for Bootle, I would have thought that Labour would by now have learned that lesson, but it has not. Instead, hundreds of billions of pounds of unfunded spending commitments are being made by the Opposition, even now.
My colleagues have worked hard to provide the successes in our economy today, but I urge them and the Minister to look at balancing the books with a balanced budget rule.