Overview

The Public Debt Management Bill aims to control UK government borrowing and spending by introducing a budget surplus rule and annual expenditure limits. It strengthens the role of the Office for Budget Responsibility (OBR) in overseeing government finances and ensures parliamentary approval for any significant overspending.

Description

This bill establishes a Budget Surplus Rule requiring the Chancellor to achieve a budget surplus of at least 1% of GDP over each business cycle, as defined by the OBR. It also introduces Annual Expenditure Limits, setting yearly government spending limits (excluding interest payments on national debt) as a percentage of GDP. These limits will be announced in the Autumn Statement.

Office for Budget Responsibility (OBR) Role

The OBR's responsibilities are expanded to include forecasting GDP, recommending expenditure limits, and publishing regular reports on fiscal performance and sustainability.

Breaches of Limits

While exceptions are allowed for war or national emergencies (requiring parliamentary approval), exceeding the expenditure limits without such justification triggers restrictions on public debt issuance until a fiscally sustainable plan is presented to Parliament.

Government Spending

The bill aims to reduce government debt and deficits over time. The exact financial impact is dependent on economic conditions and future government decisions regarding spending and taxation, but the long term goal is to achieve budget surpluses.

Groups Affected

• Government Departments: Face constraints on spending, requiring careful budget management and potential inter-departmental negotiations to offset overspends.
• The Office for Budget Responsibility (OBR): Increased responsibilities and workload in monitoring and reporting on government fiscal performance.
• Parliament: Greater oversight of government spending through the annual limits and the requirement for approval in cases of emergency spending.
• The Public: Potentially affected by changes in government services and taxation resulting from tighter spending constraints.

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