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Alistair Darling borrows £5k a second
Ben Bailey21.07.09
The recession has forced the Government to borrow more than £5,000 a second to pay for public services, "atrocious" official figures revealed today.
The Chancellor was lent £13billion in June - the highest ever for the month - bringing his borrowing for the financial year so far to £41.2billion, more than the defence budget.
That makes 2009/10 the fourth worst year in history for Government borrowing, even though it is only three months old. Borrowing to date has only been exceeded in an entire 12 months by last year, and the three years in 1992 to 1995.
The growing black hole - which Alistair Darling has forecast will hit £175billion this year - is being widened by falling tax revenues and the need to pay benefits to the growing ranks of unemployed.
The June figures came the day after public auditors identified the worst slump in the Government's tax take since the Twenties and refused to sign off six sets of national accounts.
The figures show company tax receipts are down 14 cent on last year, while VAT revenues are 16 per cent lower.
Public spending in June rose by £1.2billion to £44.9billion with the cost of social security up almost 10 per cent at £13.3billion. The strain would have been even worse if it were not for a dramatically reduced interest bill of just £600million on the national debt.
Total outstanding Government debt now stands at just under £800billion - or 56.6 per cent of GDP.
The only glimmer of hope was that the figures were slightly less dire than most City forecasts, although many economists still believe borrowing will breach £200billion this year.
Vicky Redwood, UK economist at forecasters Capital Economics, said: "June's UK public finances figures are a touch better than expected, but do absolutely nothing to alter the big picture that they are in a dreadful state. We still expect a [public debt] figure of around £200billion or even higher."
David Buik, of City brokers BGC Partners, said: "One shudders to think who is going to pay for this. My grandchildren will almost certainly be ticking like a meter because of Gordon Brown's profligacy."
The frantic borrowing and a new poll showing strong support for cuts mean deep public spending reductions after the next election are inevitable.
An opinion survey found four out of five voters believe significant spending cuts will happen whoever wins the election.
A third believed cuts were the right policy to rebalance public finances, while two-fifths said there should be a combination of cuts and tax increases. Only one in five believed that taxes should be increased to curb the need to borrow.
Today's Populus poll in the Times delivered a major blow to Gordon Brown's election strategy of offering a choice between higher spending under Labour, with public service cuts under David Cameron.
Reader views (8)
If it's all Labours fault then why are we in a WORLD RECESSION? Every major nation is in massive debt. Just look at the USA.
Incidentally the last labour government left office with government borrowing less in 1979 than what they inherited from the conservatives in 1974.
Thatcher borrowed more more than Labour, just look at the government borrowing levels for 1983.
- Steve Ford, england
In 1976, Margaret Thatcher said, "The trouble with socialism is that eventually you run out of other people's money"
- George, London
if dear darling has to borrow 5k a second, what on earth is he doing with the public purse?
what can he be spending it on and what can his dearly beloved wife think if her nearest and dearest is that out of control?
over the years i've borrowed the odd few bob from the bank, but a man would be out of control to be on the beg, borrow and steal to that extent.
bring back mr mainwaring.
- M.O'Brien, london.uk
I agree with the last comment entirely. Labour have taken the 'Great' out of Britain.
- Volpone, London, London
In answer to your question Roz, yes, they do. Its a fact that Labour governments and I use that term in its loosest sense, always leave office with debt and unemployment higher than when they enter office. Sadly the electorate have the attention span of an insect and always forget this after a few years of Tory power and vote the idiots back in again. So we get the government we deserve I guess.
- Albert Hall, kettering
Yet they gave themselves a pay rise? and increased their pension funds. Its about time this Government stopped spending and started making cuts - starting in their own over staffed offices.
- Jk, London
I'm only old enough to have experienced Labour in Power twice - but historically, is this what they do every time they're in power?
- Roz, France
Labour have destroyed this country spectacularly.
- Frank, Home Counties, England.
