Public finances show record April surplus

The first month of the Government's new financial year started as the last one ended, with a record surplus for the public finances, according to figures published yesterday.

The first month of the Government's new financial year started as the last one ended, with a record surplus for the public finances, according to figures published yesterday.

The public sector net cash requirement showed a surplus of £6.7bn, the largest figure for an April since the measure was launched in 1984, the Office for National Statistics said.

According to the Government's preferred measure, net borrowing, the public finances posted a credit of £1.6bn - the first such surplus on record. Both were higher than the numbers pencilled in by City economists. "There is no denying that the financial year has got off to an excellent start," said Geoffrey Dicks, UK economist at Greenwich NatWest.

The cash figure was flattered by 54 per cent surge in Customs & Excise payments, boosted by a £4bn advance payment of tobacco levy to avoid expected duty hikes in the Budget. This compared with a £115m payment last April.

Public sector net debt now stands at £334.0bn, equivalent to 36.1 per cent of GDP. This compares with £346.6bn or 39.3 per cent a year ago and is the lowest percentage since February 1994.

The figures for May will be boosted by the first receipts from the auction of licences for third-generation mobile phones, which is expected to deliver receipts of £12.4bn from three of the five winners.

The windfall will not have a large effect on the net borrowing figure as the mobile phone receipts will be spread over the 21-year length of the licences. The tobacco receipts did not boost net borrowing for the same reason.

The figures were also boosted by the new quarterly payment of corporation tax, which were 22 per cent up year-on-year. Total cash receipts rose 18.6 per cent while spending rose 4.9 per cent.