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Right now, there's a big domestic row going on about just how bad Britain's fiscal situation is,

i.e. whether we have any money, and who knew about the spending gap and when?

Now, that particular argument argument we can leave to the

politicians, but the underlying question is a factual one. What is our fiscal position and what are

the prospects for its improvement? With the new government's first budget due at the end of next month,

a lot depends on just how big our problem is. So, what's the answer? Step inside the

briefing room and together we'll find out. With me, I have Paul Johnson, Director of the Institute

for Fiscal Studies, Merrin Khan, economics editor of the Times, and Chris Giles, economics

commentator at the Financial Times.

Paul Johnson, if we look at the key economic indicators, what can we say about the fiscal health of the British economy?

So looking at the public finances, we're in a difficult position, and it's worth trying

to get underneath that.

We're in a difficult position in particular because debt, the amount that the government owes, is high.

The Chancellor and the now Shadow Chancellor were both very keen to say they want to get debt falling over the period of this Parliament.

And on current plans, it's not really falling.

And it's not really falling despite the fact that taxes are high. They're high by historic standards, at least, if not so much by

international standards, but taxes are high. And it doesn't look like we're spending a great deal,

because if you look across the public services, everything seems to be falling apart.

But actually, we are spending quite a lot.

Why do things look so difficult when debt is high and taxes are high? Well, it's partly because

we've just accumulated a lot of debt over time through the financial crisis, through COVID,

...