Source · Select Committees · Treasury Committee
Recommendation 15
15
Paragraph: 122
The Chancellor should, at the next fiscal event, set out an initial roadmap of how...
Conclusion
The Chancellor should, at the next fiscal event, set out an initial roadmap of how he intends to place Government finances on a sustainable footing. The milestones on that roadmap will need to be flexible—tax increases imposed too early are like to stifle economic recovery. A reassurance that the Government intends to take steps to ensure fiscal sustainability in future will underpin market confidence and reduce uncertainty for households and businesses that may fear immediate tax rises.
Paragraph Reference:
122
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.