Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the implications for its policies of the (a) UK’s ageing population and (b) recent reduction in annual birth rate.

It is the responsibility of the Office for Budget Responsibility (OBR) to publish analysis of the sustainability of the public finances. The OBR published its latest projections in its July 2020 Fiscal Sustainability Report. This incorporated its assessment of the effect of changing demographics on the public finances. The OBR expects demographic change and other cost pressures in health spending to put upward pressure on public spending while leaving revenues broadly unchanged.

The government is committed to fiscal sustainability and ensuring the long-term health of the public finances, and HM Treasury continues to review the UK’s fiscal framework to ensure it remains appropriate for both the macroeconomic context and the longer-term pressures related to demographic change. The government will set out further details on its plans to put the public finances back on a sustainable footing when the economic uncertainty surrounding the Covid-19 pandemic recedes. The OBR’s FSR provides important analysis and scenarios which will be used to inform this review, alongside a consideration of the regularly updated population projections provided by the ONS.