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Call for Evidence

Call for evidence

How sustainable is our national debt?

UK public sector net debt, often referred to as ‘national debt’, currently stands at just under 100 per cent of GDP.[1] The UK’s growth outlook remains weak; quantitative easing has significantly increased the sensitivity of the UK’s debt to changes in short-term interest rates; and it is unclear whether the Government’s fiscal rule, as it relates to the national debt, is fit for purpose.

In July 2023, the Office for Budget Responsibility’s (OBR) Fiscal Risks and Sustainability report stated that “the 2020s are turning out to be a very risky era for the public finances”. It observed that “governments face growing costs from an ageing society, a warming planet, and rising geopolitical tensions – challenges that no longer loom in the distance in our 50-year projections but pose significant fiscal risks in this decade”.[2]

The Economic Affairs Committee is launching an inquiry to investigate whether the UK’s national debt is on a sustainable path; if not, what steps are required; and whether the Government’s fiscal rule regarding the national debt is meaningful.

The Committee seeks evidence on the following questions. Respondents are not obliged to address all of them.

  • What is meant by a “sustainable” national debt? Does the metric of debt as a percentage of GDP adequately capture sustainability?
  • The Government’s target is for public sector net debt (excluding the Bank of England) to be falling, as a percentage of GDP, by the fifth year of the OBR’s forecast. How meaningful is this target; and how does it inform an evaluation of the sustainability of our national debt?
  • How robust are the assumptions used by the Office for Budget Responsibility when forecasting our national debt?
  • What implications does the structure of the UK’s national debt have for its short and longer-term funding?
  • What are the market risks created by high levels of public debt; and what factors will influence the market’s appetite for this debt?
  • What levels of productivity and growth are required to ensure our national debt is sustainable?
  • If we are to ensure our national debt is sustainable, what might this mean for fiscal policy?
  • Should the definition of the national debt differentiate between debt incurred for investments (which generate revenue for the Government), and other areas of spending?

This is a public call for written evidence to be submitted to the Committee. The deadline for submissions is 9 February 2024.

The Committee is looking to hear from as diverse a range of views as possible. Diversity comes in many forms and hearing from a range of different perspectives means that Committees are better informed and can more effectively scrutinise public policy and legislation. Committees can undertake their role most effectively when they hear from a wide range of individuals, sectors or groups in society affected by a particular policy or piece of legislation. We encourage anyone with experience or expertise of the issues under investigation to share their views with the Committee, with the full knowledge that their views have value and are welcome.

Short, concise submissions are preferred. Responses should not be longer than five sides of A4. The Committee cannot accept anything that has not been prepared specifically in response to this call for evidence, or that has been published elsewhere.

ANNEX: Guidance for Submissions

Written submissions should be submitted online, as a Word document, using the written submission form available at https://committees.parliament.uk/call-for-evidence/3299. This page also provides guidance on submitting evidence.

If you have difficulty submitting online, please contact committee staff by email at economicaffairs@parliament.uk or by telephoning 0207 219 5358. 

Short submissions are preferred. Paragraphs should be numbered. All submissions made through the written submission form will be acknowledged automatically by email.

Evidence which is accepted by the Committee may be published online at any stage; when it is so published it becomes subject to parliamentary copyright and is protected by parliamentary privilege. Submissions which have been previously published elsewhere will not be accepted as evidence.

Once you have received acknowledgement that the evidence has been accepted you will receive a further email, and at this point you may publicise or publish your evidence yourself. In doing so you must indicate that it was prepared for the Committee, and you should be aware that your publication or re-publication of your evidence may not be protected by parliamentary privilege.

Personal contact details will be removed from evidence before publication, but will be retained by the Committee Office and used for specific purposes relating to the Committee’s work, for instance to seek additional information.

Persons who submit written evidence, and others, may be invited to give oral evidence. Oral evidence is usually given in public at Westminster and broadcast online; transcripts are produced and published online. Persons invited to give oral evidence will be notified separately of the procedure to be followed and the topics likely to be discussed.

Substantive communications to the Committee about the inquiry should be addressed through the Clerk to the Committee, whether or not they are intended to constitute formal evidence to the Committee.

This is a public call for evidence. Please bring it to the attention of other groups or individuals who may not have received a copy directly.

You may follow the progress of the inquiry at: https://committees.parliament.uk/work/8090

[1] Office for National Statistics, ‘PS: Net Debt (excluding public sector banks) as a % of GDP: NSA’ (21 November 2023): https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/timeseries/hf6x/pusf

[2] Office for Budget Responsibility, ‘Fiscal risks and sustainability’ (July 2023): https://obr.uk/frs/fiscal-risks-and-sustainability-july-2023/

This call for written evidence has now closed.

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