Government debt reduction forecasts include inflation-linked fuel duty rises despite 13-year freeze
A panel of independent economists were quizzed by TSC chair Harriett Baldwin on their views regrading Hunt's latest Autumn Statement: Credit: HM Treasury
In an oral evidence hearing yesterday (28 November), a panel of independent economists were quizzed by TSC chair Harriett Baldwin on their views on last week's Autumn Statement.
One of the three economic priorities outlined by the government in the executive summary of the Statement was to reduce the size of the national debt, but when asked if this goal had been addressed, Paul Johnson, director of the Institute for Fiscal Studies, said it had not.
«Debt is rising a little bit at the moment and is set to stabilise at 93% of national income. That is despite the fact that tax revenues are rising to their highest levels ever,» Johnson said.
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He added this was partly due to the much higher level of debt interest spending and the increased spending on health.
«The Autumn Statement, clearly by reducing taxes, was not prioritising getting debt down,» he said.
Johnson outlined how the government's target of debt falling in the last year of the forecast was technically met by the new measures, but the reduction would only be «by a tiny amount» and was dependent on a very specific set of events.
He said the estimated fall in five years was levelled with a «huge uncertainty», given there were doubts about the UK's economic outlook.
Johnson added that in order for this to happen, «the numbers that are pencilled in to get that debt falling require petrol and diesel duties to rise in line with inflation every year, which, of course, they have not for 13 years».
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