£62bn EYE-WATERING PRICE OF PANDEMIC

BRITAIN borrowed a record £62billion last month thanks to the surge in Treasury spending, figures revealed yesterday.

The eye-watering figure, brought on by the coronavirus outbreak, was £51billion higher in April than during the same month last year.

Chancellor Rishi Sunak’s support package for firms hit by the lockdown along with plummeting tax revenues saw the state debt levels soar.

Government income from duty slumped by 26.5 per cent during April compared with the same month last year, according to figures from the Office for National Statistics. The total borrowing amount was significantly higher than the £30billion forecast by City of London analysts.

But it was lower than the £66billion estimate made by the Office for Budget Responsibility last month.

The Prime Minister’s spokesman said: “We are seeing the very significant impact of coronavirus on our country and our economy.

“Our priority is to support people, jobs and businesses through the crisis and ensure our economic recovery is as strong and swift as possible.

“The Chancellor has spoken about the need to right the ship but also has said our focus for now is rightly on supporting people through the current crisis.”

The ONS warned that the borrowing figure for last month could prove to be even higher once more data on the impact of the crisis is available.

It also revised the Government borrowing total for March from £11.7billion to £14.7billion yesterday after recording lower tax and National Insurance receipts than expected.

As a result of the jump in borrowing, public sector debt rose to £1,887billion at the end of April – £118.4billion higher than in April 2019.

The ONS said the Government borrowed £62.7billion over the 12 months to the end of March, representing a £22.5billion rise on the previous year.

John O’Connell, chief executive of the TaxPayers’ Alliance, said: “Government borrowing is now breaking records thanks to this crisis, with this being the largest proportionate annual increase in debt since D-Day. Tax revenues are down by a quarter and spending up by more than half on last year.

“The Government has borrowed more in one month than it did in the five months following the 2008 bailout.

“Back then, the recovery was slow, stilted and unevenly distributed. This time, Britain has to bounce back better. Attempting to tax away a fiscal deficit driven by the deepest slump in living memory would be crazy.

“Priority one must be to get the economy back up and running, with tax cuts on jobs and investment being the only way to power us towards growth again.”

Julian Jessop, from the Institute of Economic Affairs, said: “The April numbers were awful. A temporary increase in borrowing is a price worth paying to save lives and protect businesses and jobs from a one-off shock like coronavirus.”

He added: “But the Government needs to wean the UK off this extraordinary level of state subsidy as soon as possible.”