Debt hits £1trn milestone
By Richard Johnstone | 24 January 2012
The UK’s national debt has reached
£1 trillion for the first time, according to figures released today by the
Office for National Statistics.
The government borrowed
£13.7bn in December, taking the total to £1.004trn, equivalent to 64.2% of gross
However, the borrowing for
the month is more than £2bn less than in December 2010, when it was £15.9bn.
for the nine months of the financial year so far stands at £103.3bn, more than
£11bn lower than in the same period in 2010/11.
government borrowing has fallen by £16.6bn on the year so far, although local
government’s has increased by £5.7bn.
for Budget Responsibility said that December’s figure was below market expectations of £14.9bn due to a growth in
receipts and a drop in central government spending compared with last year.
was ‘strong growth’ in VAT tax receipts to the Treasury, although December is
the last month that annual growth will benefit from the rise in the standard rate of VAT to 20% at the start of 2011.
Central government current expenditure fell by 0.9% in December
compared with a year earlier.
These latest figures mean that Chancellor George Osborne is on
track to meet the OBR’s full year borrowing forecast of £127.1bn.
Government spending for the year so far is currently below
forecast, with departments set to underspend by more than £250m. However, the
report added: ‘There is always uncertainty over the degree to which departments
might underspend against plans’.
figures are published the day after OBR member Stephen Nickell appeared at the launch of the London
School of Economics’ Growth Commission, which is examining what the UK’s growth
strategy should be.
Nickell told the panel
members, which include former head of the Government Economic Service Lord Nicholas
Stern and former deputy governor of the Bank of England Rachel Lomax, that the
inquiry should examine the ‘the barriers to competition’ in the economy.
These include the planning
system and the potential use of private finance in infrastructure, such as toll
He also highlighted the
potential for more private suppliers in the NHS as one area where there could
be productivity gains that the commission should examine. ‘People say that
would be leading us down to an American system, but in both France and Germany
the government doesn’t run hospitals. They have private hospitals and by the
Organisation for Economic Co-operation and Development measures they’re rather
effective,’ he said.
The event also
heard from Larry Summers, who was treasury secretary to President Bill Clinton
and has also advised current President Barack Obama. Summers warned the commission
against attempting to minimise the role of banking in the UK economy.
He called for the
sector to be put on a stable footing following the financial crisis so that it was
not ‘subsidised by government guarantee’. The economy should be allowed to ‘go
with the grain of competitive advantage’, he said, and, and in Britain, this meant
He said: ‘Where
subsidy is not a factor, it seems to me that one should seek to grow one’s
exports as long as there seems to be demand for these exports. I would be
surprised if it were possible for Britain in the short to medium term to
replace the City of London as a major wealth generator.’