{"text":[[{"start":6.55,"text":"The writer is a member of the budget responsibility committee of the OBR and a professor at Imperial College"}],[{"start":13.35,"text":"A generation ago, the UK government’s debt, relative to its GDP, was around 30 per cent. Today it is close to 100 per cent. Office for Budget Responsibility analysis suggests that such are the likely pressures on demand for public spending over the next few decades, should expenditure rise in line with them and the tax system be left much as it is, debt might well be 150 per cent of GDP within another generation. "}],[{"start":38.55,"text":"Not only that but it could be rising at an ever faster rate and in a way that would clearly be unsustainable. Left unchecked, this makes it likely that a very sharp fiscal tightening might be necessary in future."}],[{"start":50.099999999999994,"text":"How debt rose from 30 per cent to nearly 100 per cent is not difficult to see. A series of shocks — the financial crisis and its aftermath, Covid-19, energy price rises due to wars elsewhere — are all factors. Slow growth of productivity and incomes has exacerbated their impact. Governments struggled to stop debt increasing. This looks set to be an ongoing challenge."}],[{"start":74.3,"text":"Much of the focus in the UK is on what tax-and-spending measures might be needed now to stay within fiscal rules set in terms of where the national debt and deficits might be a few years ahead. But what lies further down the road — over the next few decades rather than years — is of great importance. This is particularly so when debt is already high."}],[{"start":96.1,"text":"In a series of possible scenarios — with more or less optimistic assumptions about the economy, demographics and spending pressures — we at the OBR have assessed how the fiscal picture could evolve over the next 50 years."}],[{"start":109.69999999999999,"text":"What emerges is that, over the longer term, substantial changes to spending and tax will be needed. In the absence of fiscal tightening, debt would be likely to rise on an unsustainable trajectory. Higher productivity growth, a healthier population and longer working lives would make the problem less serious. But longer-term increased demand for public services, with reduction in some tax revenues, generates significant fiscal pressures."}],[{"start":137.1,"text":"These fiscal problems might not seriously emerge for a few decades. In the OBR base scenario — where the government’s current fiscal consolidation plan is delivered and without further substantial shocks — the debt stock may not rise much for 10 years or more. But it is significantly higher as a share of GDP 20 years from now, by which time it looks to be on an unsustainable upward trajectory. Some plausible alternative scenarios are worse, some are better, but unsustainable rises in debt emerge in most of them."}],[{"start":169.64999999999998,"text":"At some point, the balance between spending and tax revenues needs to adapt. Without adjustment, debt would be likely to reach levels such that new debt could not be raised in the market at a pace to sustain it. Should that happen, the combination of spending cuts and tax increases that would then be needed would be of a scale that would be very painful for government and citizens alike."}],[{"start":191.54999999999998,"text":"None of this is inevitable. But if we do not change our policies, there is a substantial risk that a sudden sharp fiscal adjustment could happen down the road. If it does, it is the young people of today — people already born — who will face the painful consequences."}],[{"start":208.39999999999998,"text":"The sooner action is taken to head off the risks, the less adjustment will be needed. The required reduction in the deficit to maintain debt at current levels relative to GDP could be twice as large if implemented in the middle of the century rather than in the early 2030s. Unsustainable fiscal outcomes that may not occur for some years are not just a challenge for tomorrow but for today."}],[{"start":239.95,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1783512155_6884.mp3"}