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Reforming The Uk Fiscal Framework

Author

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  • Caswell, Ben
  • Millard, Stephen
  • Pabst, Adrian

Abstract

This paper argues that the current UK fiscal framework fails to support growth-enhancing public investment while inadequately restraining debt accumulation. Frequent changes to fiscal rules, their short horizon and incentives that prioritise current spending over long-term investment have undermined economic stability and productivity growth. We propose a reformed framework centred on clear fiscal objectives, enhanced OBR analysis of long-run sustainability and a target for the primary surplus consistent with maintaining stable debt. A supplementary investment rule would ensure adequate public capital formation. Together, these reforms aim to raise productivity, support resilience and improve living standards.

Suggested Citation

  • Caswell, Ben & Millard, Stephen & Pabst, Adrian, 2025. "Reforming The Uk Fiscal Framework," National Institute Economic Review, National Institute of Economic and Social Research, vol. 272, pages -2, May.
    • Handle: RePEc:cup:nierev:v:272:y:2025:i::p:_2
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