INTERACTIVE: Build your own fiscal rule

In A framework for fiscal sustainability, Reform recommends creating a debt rule against which the Government’s plans can be measured. The rule sets a target for the national debt and the timeframe over which that target must be achieved. It would require the Government to address the long-run demographic challenges facing the public finances, and reduce the focus on the next five years’ deficit figures.

The charts below illustrate the Office for Budget Responsibility’s latest projections for long-run debt and the scale of the change required to meet a debt rule. Set the parameters for the rule with the sliders and see the size of the fiscal gap that the Chancellor will need to close in the next Parliament. Does your rule require more austerity in the next Parliament? What does it mean for the surpluses needed over the coming decades?

Two sets of long-run projections are included for comparison:

  1. A high health productivity scenario, which is the Government’s central projection and requires that NHS productivity growth permanently increases from the historical average of 0.8 per cent to 2.2 per cent.
  2. A current health productivity scenario, which assumes that NHS productivity growth remains at the historical average of 0.8 per cent.

Calculate the long-term gap in the public finances