Public debt at record level

Tuesday 20th October 2009, 11:30AM BST.

moneyPublic borrowing ballooned by a further £14.8 billion in September, official figures showed today.

The latest surge takes net borrowing to £77.3 billion for the six months of the financial year so far — the highest half-yearly figure since Office for National Statistics records began in 1946.

The Treasury expects borrowing to reach a record £175 billion for the year as public finances buckle under the impact of recession.

But there was some good news for Britain’s battered economy, with mortgage lending edging up by a further two per cent in September.

While September’s public borrowing is slightly lower than the £15.3 billion expected by the City, it is almost double the £8.7 billion seen a year earlier.

The Government also shelled out £5.9 billion in interest payments on its mounting debt pile – 43 per cent above the same month last year and the highest monthly payout on record, according to the ONS.

The nation’s net debt now stands at £824.8 billion, representing 59 per cent of the UK’s entire economic output – another new record.

The figures are likely to intensify the political row over public finances which saw the main parties clash fiercely during the conference season.

Shadow Chancellor George Osborne has outlined plans to raise the retirement age and a pay freeze for 80 per cent of the public sector, while Prime Minister Gordon Brown also announced plans for £16 billion in asset sales last week.

Today’s figures show spending well ahead of tax revenues with total current spending of £45.7 billion over the month compared with £35.4 billion in receipts.

The recession has hit businesses while rising dole queues have also dented the tax take and forced more Government spending on unemployment benefits.

Net benefit payouts were up nearly 10 per cent on the same month last year to £13.8 billion, while the Government’s VAT and income tax revenues were both down by more than 13 per cent on 12 months earlier.

The borrowing figures were released as the Council of Mortgage Lenders revealed strong demand from people buying a new home helped mortgage lending edge up by two per cent last month.


  1. 1
    merc

    3rd world country within 15 years. China and India to rise, USA to wither and the Eurozone will be history. Forget Spain it is soon to be a desert. No hiding place folks.

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  2. 2
    Stuart

    Remember in the run-up to the 1997 election, a huge “issue” was made by Bliar and his Labour cabal that the Tories would have to borrow £5 billion to fill the “black hole” that their spending plans would require. This was hammered as much as the fact that the Tories intended to “privatise” the NHS.
    Remember what they said about no more “boom and bust”.
    Now what did we end up with after the electorate believed and listened to Labour. More privatisation has taken place within the public services under Labour than any Tory Government and this includes the NHS with PFI.
    The Tory £5 billion “black hole” pales into utter and total insignificance and irrelevance when compared with what Labour have landed us with. The dishonesty of the Labour position is compounded by their self belief that they have done nothing wrong with the economy, they refuse to accept that this country is now in dire trouble bordering on bankruptcy owing to their problems.
    Whatever government takes over after the election, we are in for hard, hard times. If I had my way, Labour should be made to continue in office, they wrecked this country, make them stay in power until they mend it. Why should the Tories be blamed when they do what they have to do.

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  3. 3
    Peter

    Stuart,

    You seem to have completely overlooked the simple fact that it was the greed of Tory bankers and their US cohorts that caused the current crisis. Nothing to do with the sort of home-grown boom and bust we saw in the ’80s.

    The Tories opened the Pandora’s box of privatisation in the ’80s – once you’ve started that sort of thing it’s very difficult to restore proper public funding, but again, you conveniently overlook that.

    But all is not lost. The Labour government’s quick response to the crisis has meant that things are beginning to turn around – by common concensus of virtually all economic commentators, far more quickly than if we’d followed the ‘leave it to the market’ Tory philosophy.

    We have the means to claim this debt back – we own the banks now. Let’s hope they are made to pay their debts in the same way as their customers are.

    And let’s not forget (as you seem apt to do) that at least some of the public borrowing we have now has been spent on positive things for all – massive improvewments in education and health to name but two.

    All the Tories had to show for their expenditure was tax cuts for the wealthiest people in the country.

    The rich will always find ways of getting richer at the expense of the rest of us – we don’t need governments that give them handouts.

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  4. 4
    Stuart

    So, here we are again Peter with the usual unsubstantiated generalisations, distortions and plain untruths and spin regarding the Labour created mess that we are in. Not one “fact” just a lot of meaningless mumbo jumbo, like “MASSIVE IMPROVEMENTS IN HEALTH AND EDUCATION”. Shall we see what your “IMPROVEMENTS” amount to:-
    (a) A headlong fall in the world literacy table, the ranking was from 7th (which is bad enough) to 17th which I think puts us down some of the most previously backward countries in Europe.
    (b) For maths our position in the world table is even worse, we are 24th. Look it up, see what countries are above us.
    (c) The worst 3 x Rs standard for 11 year olds in recent history. Many 11 year olds are unable to even read and write.
    (d) The CBI say that the standard of education of school leavers is such that they are incapable of performing the most basic tasks. Many Commercial firms are now having to recruit poorly educated youngsters and educate them themselves. TESCO have just set up their own “school” to educate even basic, low level job applicants.
    Now the NHS, where do we start.
    (e) Cancer treatment and survival rates, the worst in Europe and that includes the former, Eastern “peasant” states.
    (f) Acquired infection rates, the worst in the developed world. We now have more people dying from hospital acquired infections than are killed on our roads.
    (g) Complaints from patients and/or relatives at their highest since records began.
    (h) Massive recorded discontent over the availablility of GPs for patient consultation. Notwithstanding massive pay rises for GPs, their productivity in terms of hours/patients have declined.
    (i) 7 Million people without an NHS dentist.
    (j) Hospital services closing or being relocated to the disadvantage of patients.
    That should be enough “failure” points in education and the NHS, we won’t mention, the £3 billion cut that Balls has announced for Education meaning that Heads will lose jobs and numerous schools will be “grouped” under one Head. Neither will we mention the fact that hospitals, built under PFI Labour initiatives now have to pay the rent to their landlords out of the clinical budgets. Best example, The Royal Worcester Hospital, built by PFI has to pay £41 million a year for the next 35 years. The “rent of £41 million comes from the same budget as drugs, equipment, salaries etc etc etc etc. In fact hospitals lose the rent from the budget that allows them to operate as a hospital.
    You have the audacity to mention Tory taxes, well, your Labourite gang told us that there would be no tax rises under them. So far we have had well over 100, indeed our business taxes have been raised from a very low position to one of the highest in Europe. I could go on and on and on and on and on but I won’t. I could even mention the wrecked pension schemes that Clown has presided over by his taking of almost £100 billion from scheme interest payments. I could mention the increases in child poverty but I won’t enlarge on it, they are small facts which the Labourites disregard as of no importance but which, to those affected by this damning indictment of this rotten Labour regime are of earth shattering proportions when Labour boasts that it is the party for the downtrodden, the oppressed, the disadvantaged and the poor. What an outrageous distortion of the truth, this is the party who did away with the 10pence tax band and immediately made the poorest paid in the country, pay an extra 10p in the pound tax.
    Support what you say with facts, not the sort of drivel which we heard coming from the mouths of Marxist union leaders the last time Labour were in their death throes, and if you want a bigger condemnation of Brown’s solution to the mess he has caused, turn up The Governor of the Bank of England’s speech to the Scottish Banking Association as recently as last night, Clown must have thought he was sitting on a bed of hot coals. He was lambasted.
    This talk from a man like that is good enough for me Peter, sorry, your’s is just so much pie in the sky. Please don’t provoke me to spell out a few more facts of what Clown has done to wreck our country.

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