The outlook for the public finances in the new parliam ent

© The Institute for Fiscal Studies, October 2024 12 The outlook for the public finances in the new parliament Target public sector net worth (PSNW)? Changing the measure of debt used in the fiscal target might allow the government to do more borrowing for investment, but would not in itself change the degree to which the benefits of t. [...] The problem with them being difficult to value is that a Chancellor might be more tempted to cut taxes or increase spending in the face of a favourable revaluation (say, if a change in statistical methodology led to the conclusion that the best estimate of the monetary value of the road network is higher than previously thought) than to carry out a fiscal tightening in the light of an unfavourable. [...] But it should then consider the root of this issue: not the measure of debt chosen, but the narrow targeting of the change in debt relative to the change in nominal national income over a 12-month period several years in the future. [...] The forecast rise of 0.1% of national income (from 94.3% to 94.4%; see Figure 2.10) is very small relative to the uncertainty around the forecast, and the difference between it and the decline of 0.3% of national income (from 93.2% to 92.9%) in the March Budget forecast is not economically meaningful – even though the latter meant that Mr Hunt was at that time complying with the letter of his fisc. [...] At the upcoming Autumn Budget – the first in the fiscal year 2024–25 – the fiscal targets will ‘roll over’ a year: another year will be added to the forecast, and the fiscal mandate will move to targeting the change in the debt-to-national-income ratio between 2028–29 and 2029–30.