The latest figures for spending and borrowing reveal more of the same. Current public spending excluding debt interest was up by 9%, this October on a year ago. Including debt interest it was up 7.4%, as debt interest fell by 7.4% thanks to quantitative easing. Spending was up generally. Benefit spending rose, thanks to the increases in rates last autumn. General expenditure was also up. Over the six months spending was up in cash and real terms,but by a lesser amount.
Meanwhile taxes on income and wealth fell by 0.7% on the month and by 2.5% this year compared to last. VAT receipts were up by a useful 3.6% and National Insurance by 5.1%. Within taxes on income and wealth revenue from Income Tax and Capital Gains was unchanged April to October compared to the same period last year, showing the continuing impact of the higher rates.
Borrowing as a result rose from £5.9 billion in October 2011 to an extra £8.6bn this October. It would be good if the media reported that the main reason for the bad October figures was the sharp increase in current spending, but don’t hold your breath. I expect they will continue to ignore this inconvenient fact. They are buying the spin line that a fall in corporation tax receipts is the culprit. The problem with that explanation is the fall in CT is less than the increased deficit, whereas the rise in spending is more than the increased deficit. Clearly these media commentators don’t do numbers or even read the official figures.
As there have been some cuts in some programmes, and some redundancies, the issue is where is all the extra money going? It would be good to hear a programme exploring how the government can spend so much whilst many think it is all being cut.