Rachel Reeves was accused of having “lost control” of the public finances after UK Government borrowing surged to the highest amount in five years last month. Public sector net borrowing rose to £20.2 billion in September, £1.6 billion higher than the same month last year, the Office for National Statistics said.
The Tories hit out at the Chancellor and warned she is “plotting to hike taxes yet again to pay for her failures.” in her upcoming Budget. Shadow Chancellor Sir Mel Stride said: “Borrowing is soaring under this Labour government. Rachel Reeves has lost control of the public finances and the next generation are being saddled with Labour’s debts.
“If Rachel Reeves had a plan – or a backbone – she would stand up to her backbenchers, get spending under control and cut the deficit. Instead she is plotting to hike taxes yet again to pay for her failures.
“Only the Conservatives have the plan and the leadership to break this doom loop by delivering £47 billion in savings so that we live within our means and get taxes down.”
Rising debt interest costs, pay rises and inflation increasing the Government’s day-to-day running costs, and inflation-linked benefit increases all helped push up the Government’s deficit last month.
This more than offset the amount that was raised through tax and national insurance.
The figure means the Government spent more on the public sector than it received in taxes and other income in September, requiring it to borrow billions of pounds.
September’s borrowing was lower than the amount most economists had been expecting at £20.8 billion.
ONS chief economist Grant Fitzner said: “Last month saw the highest September borrowing for five years.
“Debt interest, the cost of providing public services and benefits all increased compared with last year, more than offsetting the rise in receipts from central government taxes and national insurance contributions.
“Likewise, the first six months of the financial year saw the highest overall deficit since 2020.”
August’s borrowing figure had also been the highest recorded for that month since the onset of the Covid pandemic.
And borrowing in the current financial year, between March and September, hit nearly £100 billion.
This was the second-highest amount since monthly records began in 1993, after that of 2020, the ONS said.
Chief Secretary to the Treasury James Murray said: “This Government will never play fast and loose with the public finances.
“We know that when you lose control of the public purse it’s working people who pay the price.
“That’s why we plan to bring down borrowing and, according to IMF (International Monetary Fund) data, are set to deliver the largest primary deficit reduction in both the G7 and G20 over the next five years.
“We are cutting waste, improving efficiency and transforming our public services for the future so that we can be rid of costly debt interest, instead putting that money into our NHS, schools and police.”
