Budget 2021: when should Rishi Sunak balance the books?

Institute for Government

The chancellor told the Conservative Party Conference last year that “this Conservative government will always balance the books”. But the economic fallout of the coronavirus crisis has led to record borrowing, an increasing debt and a depressed outlook for the economy – and likely tax revenues – in the medium term. However, as the pandemic continues, so will the government’s role in supporting the economy – and the cost of servicing its debt is currently at record lows. So does the government need to embark on a programme of fiscal consolidation? And if so, when? Whether or not Sunak intends to balance the books in this budget, what balance should he strike between tax and spending measures? In the week before the chancellor’s second budget, the Institute for Government brought together an expert panel to discuss these questions. Our panel: Sir Robert Chote, former Chairman of the Office of Budget Responsibility, 2010–20 Simon Wren-Lewis, Emeritus Professor of Economics at the University of Oxford Sarah Carlson, Senior Vice President, Sovereign Risk Group at Moody’s Investor Service Timothy Pitt, Partner at Flint Global and former special adviser The event was chaired by Dr Gemma Tetlow, Chief Economist at the Institute for Government.