21st November 2014
Official data has revealed the UK’s public sector borrowing has improved slightly but it is still £3.7 billion higher than the same period last year.
Figures from the Office of National Statistics (ONS) show during the first seven months of the financial year 2014/15 public sector net borrowing, excluding public sector banks, was £3.7 billion higher than the same period last year when it stood at £64.2 billion.
In October 2014, public sector net debt, excluding public sector banks was 79.5% of GDP.
There was a sliver of good news for chancellor George Osborne in that borrowing fell 2.4% in October to £7.7 billion compared to a year earlier but it is not expected to be enough for Osborne to achieve his deficit reduction target of 12% a year.
David Kern, chief economist at the British Chambers of Commerce, said: ‘UK public sector finances have improved marginally in October, but monthly figures can be erratic. A longer term comparison shows that the government’s debt reduction target set in the last Budget appears to be out of reach.
‘Our assessment is that the borrowing target for the entire financial year 2014/15 will be exceeded.’
He added: ‘Despite strong economic growth, the government’s ability to generate tax revenue has deteriorated due to weak earnings growth and the decline in oil and gas outputs. Regardless of the result of the general election, it is imperative for the UK to persevere with a national strategy to reduce the public sector deficit – allowing British businesses to drive a sustainable economy.’
Chris Leslie, Labour shadow chief secretary to the Treasury, said: ‘These figures are yet another damaging setback for George Osborne. Borrowing so far this year is now £3.7 billion higher than the same period last year.
‘Osborne’s promise to balance the books by next year lies in tatters. As the Office of Budget Responsibility has said, stagnating wages and too many people in low-paid jobs are leading to more borrowing.
‘Our economic plan will reverse the £3 billion tax cut for the top 1% of earners and stop paying the winter fuel allowance to the richest pensioners. We will raise child benefit by just 1% for two years and cut ministers’ pay by 5%. And our plan will deliver a recovery for the many not just a few, with the rising living standards and more good jobs we need to get the deficit down.’