Since April the UK state has borrowed another £33.8bn. We sent £3.6bn of this as net contribution to the EU, an increase of 8% on the amount we sent them for the same time period in 2015. It is time we sent them the letter,repealed the Act and cancelled the subscription. It is the easiest spending cut to make, and will immediately strengthen the balance of payments.
The overall borrowing figures showed some reduction on the previous year. This once again was owing to a big increase in tax. In August Corporation tax was up by 15%, Stamp duty by 14%, Income Tax up by 12% and National Insurance up by 8%. The UK knows how to tax enterprise and effort and wants to tax all who work and venture more. Over the period April to August the growth in tax was less, with National Insurance still up by 8%, Stamp Duty up by 10%, Corporation Tax up by 5% and Income Tax up by 4%. They are large increases when inflation is close to zero.
State debt stood at £1621 bn. More realistically it is around £1200 bn when you take off the large amounts of debt the state now has bought up, and the planned increased purchases over the next few months. The interest cost is still large, despite the ultra low rates that now apply. Total spending in August was up by 4.3%, though by a smaller amount over the five months.
The pattern this year is likely to be more of the same. The aggressive Stamp duty rates will not prevent increases in revenue. The modest abatements at lower house prices should mean there will be more action in much of the market offsetting the much reduced volumes at the high priced end. More people are in work and more people will earn more, fuelling higher receipts from NI and Income Tax.