• Government borrowing for November £4.9 billion less than a year ago
• Tax receipts up by £1.6 billion but outgoings still £17.4 billion more than incomings
• Public sector net debt 96.1% of GDP
Danni Hewson, AJ Bell financial analyst, comments on November’s Public sector finances, UK - Office for National Statistics (ons.gov.uk)
“There is no getting away from the fact that the government is still spending more than it’s got coming in. All those booster jabs, all that tracking and tracing costs money not to mention the added weight of running an energy company. But tax take has been steadily rising, the furlough scheme has ended and though the cost of servicing all that debt has risen, debt is still cheap.
“Something that’s potentially a lot more expensive is the collapse of the hospitality sector. Businesses are begging for the Chancellor to help out as consumers make difficult choices in a bid to keep their Christmas plans intact.
“But how can the Chancellor make sure any extra help is targeted. That precious money isn’t squandered on sectors that are enjoying business as usual. Because whilst there is scope for the chancellor to borrow more, he has to consider the cumulative effects of the last couple of years. Debt is now at 96.1% of GDP, the highest it’s been since 1963. If he is to find room on his sleigh for pubs, clubs and restaurants will the gift he really wants to give to the British people, a tax cut in the run up to the next election, become a gift too far.
“There’s also the little issue of inflation to consider. What would any potential measures do to the heat the country is already feeling? Every time that number rises it brings consequences, from upping the price ticket on those debt interest payments to squeezing household finances at a time the Chancellor is making his own demands on the public’s purses.
“And whilst the books still didn’t balance in November the scales were tipping in the right direction. The worry is Omicron will have already eaten away at December’s tax take adding another layer of complexity to an already complex situation.”
