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Reforming the UK fiscal framework

Caswell, Ben, Millard, Stephen, Pabst, Adrian (2026) Reforming the UK fiscal framework. National Institute Economic Review, 272 (1). pp. 4-10. ISSN 1741-3036. (doi:10.1017/nie.2026.10088) (KAR id:113354)

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.

Item Type: Article
DOI/Identification number: 10.1017/nie.2026.10088
Uncontrolled keywords: E61, Debt sustainability, H63, Public investment, Fiscal rules, E62, H54, Fiscal policy, Fiscal framework
Subjects: H Social Sciences
J Political Science
Institutional Unit: Schools > School of Economics and Politics and International Relations > Politics and International Relations
Former Institutional Unit:
There are no former institutional units.
Funders: University of Kent (https://ror.org/00xkeyj56)
SWORD Depositor: JISC Publications Router
Depositing User: JISC Publications Router
Date Deposited: 24 Mar 2026 10:41 UTC
Last Modified: 07 Aug 2026 10:58 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/113354 (The current URI for this page, for reference purposes)

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