A report from the Institute of Economic Affairs recommended a return to “Victorian” prudence so that the government spends no more than it receives in tax each year.
Introducing a “debt brake” rule, with a financial penalty for the minister responsible, would force “reckless” politicians to act in the long-term interests of the country, the think-tank said.
Between 1830 and 1913 the UK Budget deficit averaged close to zero but from around 2002 Britain stopped reducing its debt and started running deficits.
The IEA report, co-written by the Conservative MP Kwasi Kwarteng and Jonathan Dupont, a researcher, said the mounting debts left Britain ill prepared for the financial crisis.
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