Reform UK MP Rupert Lowe will this week introduce a draft law to stop the state printing “billions and billions” of pounds to bail itself out.

The former chairman of Southampton Football Club wants to stamp out “dishonesty on an industrial scale” and ban “quantitative easing” – a measure which saw the Bank of England buy nearly £900billion worth of bonds in the wake of the global financial crisis.

He will set out his proposal to the Commons on Wednesday.

Mr Lowe said: “I am pushing for the state to be as accountable to the people, as the people are to the state. As we saw during the disastrous Covid response, it is capable of printing vast amounts of money to fund unaffordable policies.

“I want the state to act as we are forced to, and live within its means. It should only be able to fund policies it can afford – this is not an unreasonable suggestion.

“Quantitative Easing is the root cause of so many of our problems, it allows for dishonesty on an industrial scale. The state should spend what it earns, not print billions and billions to bail itself out. It’s about time we had this debate in Parliament.”

The Bank of England started using quantitative easing in March 2009 in response to the financial crisis and bought £895billion worth of bonds.

Critics of quantitative easing warn that a flood of cash into the market can push up prices, encourage reckless financial behaviour and depreciate the currency – creating higher costs for importers and consumers.

The Bank of England says that it is intended to push up the prices of bonds and “bring down long-term interest rates”.

Economist Shanker Singham said: “In general I am very sympathetic to efforts to rein in the fiscal market distortions which money printing entails. I am not sure I would go as far as banning QE without tackling the underlying fiscal distortions.

“A better approach is to ensure that all regulators must consider the impact of market distortions before taking any action. There may be cases where QE is needed in emergencies, but these would have to be real emergencies where the impact of not allowing it would be truly catastrophic.”

Julian Jessop of the Institute of Economic Affairs was also wary of a ban, saying: “Despite its many downsides, QE is a potentially useful tool to support the economy when there is no more room to cut interest rates. An outright ban would therefore be disproportionate.”