Seeing the reporting of yesterday’s figures, I am amazed. They know a few of the figures, and give a most misleading view of what happened. They all claim the problem was the 9% fall in Corporation Tax revenues.
The actual figures are that spending in October was up by £3.6 billion compared to October 2011 (including interest payments – which reduced the increase. Spending excluding interest was up by £4bn). Corporation Tax fell by £0.8 billion to £8.1billion.
Borrowing rose by £2.7 bn more than in October 2011. That means the rise in spending more than accounts for the rise in borrowing, with tax revenues making some positive contribution. Corporation Tax is relatively small and had a bad month. VAT and NI did better.