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Fiscal Risks and Sustainability Report 2026

07 July 2026

Proposing MP
Rachel Reeves Lab
Leeds West
Type
Written Ministerial Statement
Department
Treasury
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TAGS
Defence Economy Taxation

At a Glance

Issue Summary

The statement addresses the release of the Office for Budget Responsibility’s (OBR) Fiscal Risks and Sustainability Report (FRS) 2026, which confirms the government's economic plan to boost growth and maintain sustainable public finances.

Action Requested

The report highlights the importance of reducing the deficit, unlocking a step-change in public investment, and strengthening the tax base through measures like Electric Vehicle Excise Duty (eVED). The government has taken steps such as introducing eVED and publishing the Defence Investment Plan with £298 billion over four years to support long-term fiscal sustainability.

Key Facts

  • UK economy grew by 2.1% - fastest among European G7 economies.
  • Living standards have grown by 1.1% since the start of this Parliament after a previous decline of 2.3%.
  • Borrowing in 2025-26 was over £23 billion lower than in 2024-25, forecasted to continue falling every year.
  • The government introduced Electric Vehicle Excise Duty (eVED) at Budget 2025 to strengthen the tax base.
  • Defence Investment Plan includes £298 billion of investment over four years.
  • OBR’s Fiscal Risks and Sustainability Report highlights productivity growth as critical for fiscal sustainability.
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