This House of Lords Library Briefing places the current position of the UK public finances in a longer-term context, both historical and into the future. From this perspective, it explores the question of whether the debt position is ‘sustainable’.
Sustainability of the UK Public Finances: A Long-Run Perspective (376 KB , PDF)
Commentary on the public finances has been prominent following the Chancellor’s Spring Statement on 13 March 2018. Much of the comment has focussed on developments since the financial crisis and forecasts for the next few years. This Briefing takes a wider perspective and places the existing debt and deficit positions in a longer-term context, both historical and into the future. From this perspective, it explores views on the question of whether the debt position is ‘sustainable’.
The Briefing looks at the origins and history of the national debt, the reasons why it varies over time and how interest payments on the debt arise—and subsequently themselves feed back into the debt.
Based on historic analysis, it could be argued that the current position of the UK public finances is sustainable. However, the Office for Budget Responsibility (OBR) is specifically tasked with considering sustainability as part of its remit, and it takes a different, forward-looking perspective. The OBR’s projections have “huge range of uncertainty”, but on its central projection it concludes that the fiscal position is unsustainable over the long-term. The key reason for this is the impact of “an ageing population and further upward pressure on health spending from factors such as technological advancements and the rising prevalence of chronic health conditions”. The OBR concludes that: “policymakers and would be policymakers will need to think carefully about the long-term consequences of any policies they introduce in the short-term”. Brexit also introduces a further source of uncertainty both in the shorter and longer terms.
The Briefing concludes with the policy implications put forward by the OBR, as well as from some shorter term work by the Institute for Fiscal Studies and a related report by the Institute for Economic Affairs.
Sustainability of the UK Public Finances: A Long-Run Perspective (376 KB , PDF)
In the autumn budget the chancellor announced changes to inheritance tax reliefs. From April 2026, taxes would apply to agricultural assets over £1mn (or up to £3mn in certain circumstances). The government has said this will just affect the wealthiest landowners and disincentivise buying agricultural land to avoid tax. Farming groups have argued the policy is a threat to the future of family farming.
In February 2024 the House of Lords Communications and Digital Committee published a report on large language models and generative AI. It highlighted the opportunities and risks this technology offers, and recommended actions the government should take to support the market while mitigating risks. The new government has said it will legislate to address safety risks arising from generative AI.
On 30 October 2024, Chancellor Rachel Reeves delivered her first budget which included the details of the settlement for the Department for Culture, Media and Sport. It also contained more general measures which relate to the cultural sector. This briefing gives an overview of how the cultural sector is currently funded, what was said in the budget in this area and what the sector has said in reaction to the announcements.
