Weak UK Tax Receipts Hurt Borrowing Figures

by liamssoft | November 21, 2012 at 03:00 am

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The Government borrowed more than forecast in October as a 10% fall in Corporation Tax receipts hurt Treasury coffers.

Public Sector Net Borrowing, excluding financial interventions such as bank bailouts, came in at £8.6bn.

It means that for the tax year-to-date, the total stands at £73.3bn - five billion pounds higher than the year before.

The Chancellor wants borrowing for the full year 2012/2013 of £120bn and the latest figures leave George Osborne facing tough choices ahead of his Autumn Statement to the Commons on December 5.

As he remains under pressure to loosen the austerity drive that his critics argue is damaging economic growth, Mr Osborne is equally squeezed on the option of imposing more spending cuts to cover weaker than expected income.

Economists suggest one of his golden rules - ensuring that the UK's debt-to-GDP ratio starts falling to 2015 - may be abandoned.

The chances of such a move were heightened after Bank of England governor Sir Mervyn King effectively endorsed it last week, on condition that the global economy was growing slowly.

The Office for National Statistics, which released the last borrowing figures before the Chancellor's appearance before MPs, said total tax receipts were 1.8% higher at £47.5bn in October but total expenditure rose 7.4% to £52.8bn.

Tax revenues were dragged down by corporation tax only raising £8.1bn while spending on social benefits, such as state pensions, jumped 7.7% to £16bn.....Read more

news.sky.com