Lord Agnew is not a household name, but the Treasury minister’s dramatic resignation this week over the government’s record on tackling fraud in the Covid grant schemes was significant.

Here was the government’s own anti-fraud minister denouncing said government at the despatch box for the casual nature in which £4.3bn of taxpayers’ cash ‒ equivalent to £154-per-household ‒ was written off by the Chancellor, seemingly gifted to criminals.

According to the peer, on Rishi Sunak’s watch, the Treasury “appears to have no knowledge of, or little interest in, the consequences of fraud to our economy or society”, adding that “a combination of arrogance, indolence and ignorance freezes the government machine.” Lord Agnew wouldn’t defend it, and who could blame him?

His departure must be seen for what it is: another damning blow to the Conservatives’ claim to careful stewardship of the public finances.

Contrary to the traditional Tory claim, Sunak’s handling of the public purse during the pandemic has been far from responsible. From the billions frittered away on crony contracts fast-tracked via “VIP lanes”, to the over-reliance on expensive contractors and temporary staff for Test and Trace in England, his record is one of wastefulness and economic incompetence. (How some Test and Trace consultants could justifiably be paid more than £6,600-per-day remains beyond me).

No business or household budget could ever afford to be run in such a reckless fashion, let alone during a cost-of-living crisis. Like the Prime Minister’s lockdown parties, the Chancellor’s draining of the public purse is another example of ‘One rule for them, another for the rest of us.’

Time and again, the government has failed to deliver value for money, a fact made more difficult to bear by the government’s insistence on hammering working families with a freeze on the income tax threshold, rising council tax, and a hike in National Insurance contributions in April.

Labour must therefore continue to highlight this pattern of waste, and make clear its own plan to treat every penny of taxpayers’ hard-earned money with the respect it deserves.

Efficient public spending is a social good. Spending wisely on day-to-day running costs and limiting waste will ensure the next Labour government has the resources to invest long-term in our NHS, schools, and police, and it will help keep taxes on working people to a minimum. In order to fund bold but necessary investment programmes such as the £28bn annual Climate Investment Pledge, the principle of providing value for money should be at the heart of every Budget and every spending decision made in the Treasury.

That’s why I welcomed Rachel Reeves’s commitment to establish an independent Office for Value for Money (OVM) at Conference last September. The details of the proposed OVM need fleshing out with regard to its remit and powers, and the meaning of ‘value’ would have to be strictly defined as being of benefit to the British public so as to prevent crony behaviour by any future government. But the idea is a strong one and would instil confidence in the public. Under the next Labour government, the gravy train ridden by Tory donors and cronies would finally be brought to a screeching halt. And public money lost to failed crony contracts would begin to be recouped.

Labour also needs to put fraudsters on notice. Fraud and economic crime more widely is a huge drain on our public services. Consider the new hospitals that could have been built or the council and social house building that could have been financed from the lost £4.3bn. At a time when households are facing massive increases in their energy bills, a rise in taxes and falling real wages, it cannot be right that working people are forced to make up the difference with tax increases.

So if the Chancellor doesn’t do more to recover the lost billions from the criminals that stole it, then Labour must when it’s next in office. Moreover, the Party should prepare to legislate for a Bill on economic crime to reform Companies House and stop public money from finding its way into the pockets of criminals. These measures would demonstrate to the British people that Labour respects taxpayers’ cash and will not tolerate waste.

Although Lord Agnew’s resignation has been rather lost amid the noise surrounding the Sue Gray report, the Chancellor’s willingness to write off billions shouldn’t be forgotten. Sunak is not financially responsible, and he has let down taxpayers yet again. It is now for Labour to demonstrate that it is the party of efficient public spending ahead of the next general election.

Finley is Co-Chair of London Young Fabians and Chair of Harrow West Young Labour. He can be found on Twitter @harnettfinley.