Liz Truss shared the article [by John Penrose MP] calling for the government to be forced to keep to its “day-to-day budget” balanced.
A senior minister has endorsed a proposal to let members of the public sue the government for spending too much.
Liz Truss, chief secretary to the Treasury, approvingly shared an article by a fellow Conservative MP calling for a new “fiscal rule” to be written into law, binding the government to keep its “day-to-day budget” balanced. Under the plan, the government would only be allowed to borrow to fund capital investment in infrastructure but not for spending on public services.
The idea was proposed by the Weston–super–Mare MP John Penrose, a former minister, in an article for the ConservativeHome website. Ms Truss posted it to her 44,000 Twitter followers yesterday, adding: “Great piece by @JohnPenroseNews. Economic freedom has to mean fiscal discipline.”
As Philip Hammond’s de facto deputy, Ms Truss is responsible for public expenditure and spending control.
Mr Penrose wrote that under his rule “governments would still be able to borrow for long-term investments in economic infrastructure such as fibre optics, roads or rail. But everything else, the day-to-day spending on things like health, schools, police or defence, has to be paid through your and my taxes.”
He added: “The power of a fiscal rule is that it forces governments to make sure we only live within our means. If they don’t, then citizens can take ministers to court, and the figures are independently audited to make sure they can’t be fiddled.
“This matters, because it would mean an end to boom and bust, for the government’s finances at least. We would have stronger, more predictable, stable foundations for wealth-creating investments in new jobs and technologies. Public spending on things like health, schools, police or defence could increase steadily, rather than in stop-go cycles. And we’d pack a stronger punch internationally too.”
Mr Penrose praised Ms Truss in the article, writing that she “backed the idea of a fiscal rule” in a speech at the London School of Economics in June.
Ms Truss used the speech to praise Switzerland and Chile, which she said had “shown that flexible yet robust fiscal rules can be designed which balance budgets over the business cycle … These rules are self-discipline mechanisms, which help ensure that governments do not get carried away”.
The speech made waves for her jibes at colleagues including Michael Gove. Ms Truss, who has reinvented herself as a modern low-tax libertarian since being demoted from lord chancellor last year, criticised Mr Gove’s actions against wood-burning stoves, joking: “There’s enough hot air and smoke at the environment department already.” She argued that some regulations “get in the way of consumers making legitimate choices”.
This article was written by Henry Zeffman, Political Correspondent at The Times.