Income tax receipts in particular have been weaker than expected.
Income tax receipts in particular have been weaker than expected
The chancellor George Osborne borrowed £13.3 billion in May, higher than a year earlier when the government borrowed £12.6 billion, according to new figures from the Office for National Statistics (ONS).
Income tax receipts in particular have been weaker than expected.
The latest figures come just two months into the fiscal year, but imply a poor start to Osborne’s yearly plan. At the time of the Budget in March, the Office for Budget Responsibility (OBR) predicted full-year borrowing would fall from £107.8bn last year to £95.5bn this year.
Commenting on the figures, shadow chief secretary to the Treasury Chris Lesley said the chancellor was set to “break his promise to balance the books by next year”:
“Not only is George Osborne set to break his promise to balance the books by next year, but so far this year he is borrowing more than the same period last year.
“Borrowing is now expected to be almost £190bn more than planned under this government. This is the cost of three damaging years of flatlining and falling living standards we have seen since the election.
“Labour will balance the books and get the national debt falling as soon as possible in the next parliament, but we will do so in a fairer way. And we will act to secure a strong and balanced recovery that delivers rising living standards for the many, not just a few at the top.”
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14 Responses to “New figures: George Osborne borrowing more than expected”
Leon Wolfeson
Um. I think you’re giving the Coalition too much credit. They actively used austerity to choke off the recovery. Moreover, I can absolutely blame the rich (and do) for the damage they cause – depersonalisation is a *sickness* in politics. If your policies cut me, you are cutting me.
(There’s also no real equivalence between being able to afford a third house, and being able to afford shelter, afaik!)
I’m certainly no (neoliberal) Labourite…I was making a Keynesian economics point there!
As I said a few days ago, Labour really have gone to some lengths to convince me that they are *not* the least-worst option, and that they’d make things worse if they got power anyway.
John
Keynes… I understand his point, but I don’t agree with it. We saw you can’t spend your way out of a recession (which, if I recall, isn’t something he argued, but is something attributed to him), and I don’t see why public sector is considered more irresponsible than private.
At the end of the day, micro or macro, it comes down to people. This is why I don’t blame the rich, though I certainly judge them for moral decay. They acted in a selfish manner to protect their wealth; but the whole world was telling them that was OK. They live in a world defined by ‘the politics of greed’. They think greed is good. Boris Johnson was the latest politicion to claim this, but I think all the Conservates believe it.
That is why they wanted the private sector to fuel this recovery. I don’t think they wanted to choke it; just direct (or redirect) it to private onlly. Which didn’t work of course.
Also, I wasn’t attemption to define your political position; merely restating my own. Many think ‘well if the coaltion can’t do it, I guess we’ll have to go with labour’. I always remind them there are OTHER parties out there. While this may result in another hung parliament with zero mandate from the populace, in the long-term it could see the political shiftUKIP talk about. (Just hopefully not in their favour; they make me nervous)
Leon Wolfeson
That’s a party-line Tory view…. Keynesian economics had worked *absolutely fine* *when it was used*…Britain went strongly the other way, and we’ve only just passed the pre-recession GDP, with wages well down, etc.
Other countries like Germany managed fine! Austerity has shown is breeds austerity, that it’s a break on the economy…the data’s pretty plain! We’re a basket-case economy at this point, with a major collapse on the cards if wages keep falling the way they do… because the government’s broken (with Labour’s agreement) the *concept* of automatic stabilisers with it’s “welfare cap”, and Labour have promised big drops in benefits *every three years* now!
And the government’s managed quite well to diverting state cash (From the NHS, etc.) to big companies (which are paying less tax than ever).
Other parties? Waste of time under FPTP – which is why voting reform should be priority one…
John
I’m not an economics student, so my understanding of Keynes theory is pretty basic but, if I remember the core idea, it is that inflation and demand are the prime drivers of recovery in a recession.
Therefore, to leave a recession you need to boost domestic demand and control inflation (that loast one is usually a big priority all the time, so that’s a bit of a non-point for me in this line of logic).
He further argued that the public sector has to legislate to control the business cycle of the private sector.
To my limited knowledge my first basic point hasn’t been properly attempted in this country and I’m not familiar enough with other countries economic history to comment.
The second point has been addressed multiple times by Labour, and occassionally by the Conservatives. I agree with it.
My problem lies with the fact that his ecnomic theory was so broad. He basically argued that demand can stimulate supply, and thus recovery, in a recession. Which is fine, but you can’t simply ‘create’ demand. We tried that in the ‘great’ recession and it wasn’t a resounding success. We didn’t recover any quicker than countries which tried different methods.
I’m unaware of the subtleties of the rest of his discourse, but I AM aware that if you ask many conservatives they would say Keynes was onto something, they agree with his points and then use a derivative theory of his to justify their actions.
Ask a labourite, and you’d likely get the same response.
I’m unconvinced that Keynes’ theories fit the economy of today.
“And the government’s managed quite well to diverting state cash (From
the NHS, etc.) to big companies (which are paying less tax than ever).”
I agree; my point is it didn’t stimulate the economy. THAT is what failed. I can’t be sure (I wouldn’t believe him whatever Cameron said either way) but I believe the government is following a laissez-faire ideology; attempting to bring the state out of as much as possible because the private sector is ‘better’ at managing the economy. It demonstrably isn’t.
“Other countries like Germany managed fine! Austerity has shown is breeds
austerity, that it’s a break on the economy…the data’s pretty plain!”
Again, I agree. Though I think it’s disengenous to compare us with Germany; Their economy and ours is structurally vastly different to ourse; with far more manufactoring, a broader economic base and a more skillfully diverse workforce. That this is true is legacy of Thatcher of course, but we deal with what we have for now. I would LOVE to see a resurgence of British manufacture, especcially in the North where once it resided, but we’re not there yet.
“Other parties? Waste of time under FPTP – which is why voting reform should be priority one..”
They said THAT when Labour first started up. Yet it forced the Liberals and the Democrats to unite into one party to survive. It CAN happen. Frankly, only a new party will have the political will to reform FPTP anyway, so all our hopes are bounded together in that.
John
Only until they’re out of power, it is devoutly to be hoped.