Response to the House of Lords’ Economic Affairs Committee inquiry into the Sustainability of the UK National Debt

We are publishing our response to the House of Lords’ Economic Affairs Committee’s inquiry into the sustainability of the UK’s national debt. This has also been published in the inquiry’s page, with reference number SND0023.

In this submission, we have highlighted the difficulty in establishing a practical measure of sustainability that can be used in the short-to-medium term and that correlates with long-term sustainability, and discussed particular issues with the UK Government’s current set of fiscal rules.

Looking at more long-term projections that the Office for Budget Responsibility produce, we have highlighted the sensitivity of some of them – for example, the assumptions about non-demographic health cost pressures – and how updating these would be of value given that they drive so much of the results in the long-term projections. We also brought to the Committee’s attention that in the OBR’s current long-term projection framework, productivity growth has little impact on outcomes, which could be factored in with some modelling updates and therefore bring it more in line with the economic consensus.