Source · Select Committees · Treasury Committee
Recommendation 14
14
Paragraph: 121
One legacy of the crisis will be a sharp rise in the level of public...
Conclusion
One legacy of the crisis will be a sharp rise in the level of public debt and, possibly, an ongoing rise in borrowing. This has been and will be necessary to contain the economic damage from Coronavirus and does not raise immediate debt sustainability concerns. However, it will make the job of stabilising the public finances in the long term more difficult.
Paragraph Reference:
121
Government Response
Acknowledged
HM Government
Acknowledged
On your recommendation about setting out a roadmap towards fiscal sustainability, given the unprecedented circumstances, it is right that the government’s economic response has focused on limiting the extent to which there is permanent damage to the economy, which would lead to higher structural borrowing over the medium-term. Although this will lead to a rise in borrowing and debt in the near-term, with borrowing costs now close to record lows, this is affordable and sustainable. Over time and as the economy recovers, the government will take the necessary steps to ensure the long-term health of the public finances. The government will set out further details on its plans for sustainable and balanced fiscal policy, including a revised fiscal framework, in due course, as the economic and fiscal outlook becomes clearer.