The latest figures from the Office for National Statistics (ONS) show public sector borrowing hit £27.4 billion in December, the highest December figure since records began thirty years ago. £16.7 billion higher than December 2021, and a whopping £21.1 billion more than December 2019, prior to the pandemic…
£17.3 billion of last month’s figure was spent on debt interest alone. That’s two-thirds of the total. For context, the total policing budget in England and Wales for the financial year ending March 2023 is just under £17 billion…
Good news, though: In the financial year-to-December 2022, public borrowing sat at £128.1 billion, £5.1 billion more than 2021… although £2.7 billion less than forecast by the geniuses at the OBR. Small mercies.
The Labour Party has been quick to criticise Liz’s “unfunded” tax cuts, while jumping at the opportunity to announce unfunded spending of their own. Using the justification of reversing Kwasi’s cut to the top rate of income tax, Labour has announced a swathe of expansionary policies, supposedly without breaking their own fiscal rules. The claim is that the £2 billion in “savings” doesn’t count as borrowing. They seem to think their reallocating of borrowed money is different to Kwasi’s borrowing…
Among Labour’s flagship pledges is the provision of breakfast clubs for all primary school children. Labour’s press release fails to mention that the government already provides breakfast clubs for those who need them most. The effect of the policy is making the spending less focused, not exactly ideal in an inflationary period…
The £2 billion in reassigned borrowing is being spent as follows:
- NHS modernisation plan – £1.6 billion
- Expanding school breakfast clubs – £186 million
Looking through Labour’s other spending commitments, partly justified by their fiscal rules which conveniently don’t count borrowing “to invest” as borrowing, the costs quickly add up:
- 0.7% GDP on International aid – £4 billion
- National Wealth Fund – £8 billion, from £28 billion previously announced
- Growth plan tax cuts, minus changes to corporation tax and top rate – £24 billion
- Accepting the government’s energy price cap – £85 billion
The party claims they would raise more revenue through a windfall tax and by reversing Kwasi’s corporation tax rise. Though by Labour’s own figures the windfall tax would raise just £8 billion, and the £19 billion corporation tax “savings” are again being made from existing borrowing. Doesn’t quite cover it…
Starmer’s policy promises are fully costed… only if you ignore the billions they’ve excluded from the costings.
At the beginning of her Marr interview Theresa May criticised Labour’s plans for spending and borrowing. She then went on to announce £12 billion of new spending on tuition fees and Help to Buy without saying how she would pay for it. This is dangerous unfunded Labour-lite stuff, fighting on Corbyn’s turf…
Labour First Minister of Wales Carwyn Jones says “there’s never been a better time to borrow“ £500 billion. Speaking on Sunday Politics Wales yesterday the most senior Labour figure in Wales said:
Presenter: “The Shadow Chancellor John McDonnell said £500bn more borrowing in order to give the economy a bit of a boost – you’d go along with that then would you?”
Carwyn Jones: “Yes I would. Let’s remember…”
Presenter: “£500bn extra borrowing?”
Carwyn Jones: “There’s never been a better time to borrow. It’s cheap.”
Quite a day: Communist-endorsed Labour arguing with themselves about Trident, but at least they agree on borrowing half a trillion pounds more…
Revised ONS data shows public sector net borrowing was £76 billion in the last financial year, £2 billion more than previously thought. Osborne had forecast £72.2 billion of borrowing for the last year and was reported to have missed his target by £1.8 billion back in April. Turns out he actually missed it by almost £4 billion…
