Public borrowing rockets to record-breaking levels
By Peter Wozniak
Public sector net borrowing rose to £23.3 billion in November, breaking previous records, the Office for National Statistics (ONS) has shown.
The figure is up from £17.4 billion at this point last year, and outstrips the former peak of £21.1 billion in December 2009.
The net borrowing figure, upon which the government bases its forecasts, excludes direct government intervention in the economy – and confounded expectations that borrowing might remain steady given the effects of the emergency Budget in June.
The news will prove problematic for chancellor George Osborne, who has staked the government’s economic policy on bringing down debt and borrowing by radically cutting public spending.
Shadow chancellor Alan Johnson said: “Today’s record borrowing figures show that when it comes to getting the deficit down, growth matters.
“That’s why the impact of this Tory-led government’s austerity rhetoric on consumer and business confidence is such a risk – even before the impact of public spending cuts start to be felt.”
But officials insist that the worrying figures merely highlight the need for the deep contraction of £80 billion outlined in the spending review in October.
The chancellor hit back at Mr Johnson, telling the Commons that the borrowing figures “are a reminder of the fact that we have a record budget deficit”. Mr Johnson, he added, “is running out of time to come up with sensible credible contributions as to how we get Britain growing again”.
Persistently high government spending on areas including health and defence have been blamed for the shift. Tax revenue continued to rise, however.
Equally concerning were record-breaking public sector debt figures, at 58% of GDP.
November’s £23.3 billion borrowing brings total public sector borrowing for the financial year to over £100 billion.
The Office for Budget Responsibility (OBR) has predicted that figure will rise to £148.5 billion by the end of the financial year.