Debt repayment reaches pounds 5.7bn
Wednesday 19 November 1997
The Government repaid pounds 5.7bn of its debt in October, taking its borrowing for the financial year so far to just pounds 2.6bn compared with pounds 11.2bn at the same stage last year.
The one-off sale of Ministry of Defence housing makes the comparison unfair. Even so, City analysts were unanimous yesterday in predicting that the Chancellor of the Exchequer would be able to announce a target for the public sector borrowing requirement this year of some pounds 2bn below the target he set in July.
The strong economy has helped deliver the improvement in borrowing, boosting the tax take and helping reduce expenditure on social security payments.
Yesterday's figures showing a surplus of government revenue over expenditure in October benefited from pounds 10.8bn in corporation tax receipts, a pounds 1.7bn increase on the same month last year. There will be another tax bonus from windfall tax revenues of pounds 2.6bn due in December.
The picture for total tax revenues is more mixed, however. Income taxes were up strongly year-on-year but customs and excise receipts such as VAT were, surprisingly, lower than a year ago.
The main reason for the better-than-expected borrowing figures published yesterday is the Government's ultra-tough control of spending. Departmental expenditure in the first seven months of this financial year is 0.7 per cent lower than last year, much less than the annual growth rate of 1.7 per cent pencilled in by the Treasury.
Spending is likely to increase over the course of the next few months. Departments traditionally catch up in the final month or two of the financial year if they face the risk of an underspend being carried over into the subsequent year's allocation.
Many economists also expect the pressure for higher spending on health and education to derail the Iron Chancellor's targets in the end.
David Hillier, UK economist at Barclays Capital, said: "We all expected slippage in the spending plans after the elections and you have to give them credit for avoiding that. But I don't think a Labour Government will carry on delivering negative spending growth."
Diving in at the deep end is no excuse for shirking the style stakes
- 1 Why I'm on the brink of burning my Israeli passport
- 2 Japanese plant experts produce 10,000 lettuce heads a day in LED-lit indoor farm
- 3 War is war: Why I stand with Israel
- 4 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 5 The true Gaza back-story that the Israelis aren’t telling this week
Israel-Gaza conflict: Death toll tops 125 after overnight raids as Operation Protective Edge continues
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Ian Thorpe gay: Olympic swimmer comes out in Parkinson interview
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Gaza-Israel conflict: Pro-Palestinian demonstrators take to streets of London, Paris and New York in wave of protests
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...