Borrowing is now at its lowest for 16 years in booming Britain

BRITAIN’S borrowing is at its lowest for 16 years as rising tax receipts confound warnings of economic doom following the Brexit referendum.

In a sign that the vote to leave the EU has done nothing to derail plans to put the country’s finances back on a stable footing, the Office for National Statistics said the Government borrowed £40.5billion last year – down from £153billion in 2009-10 under the last Labour government.

It is also around half the amount George Osborne predicted Britain would borrow last year in the event of a Brexit vote.

The figures give the lie to warnings that the decision to leave the EU would crash the economy and hammer tax receipts.

Instead, last year’s deficit was 2 per cent of national income – the lowest since 200102, when Tony Blair and Gordon Brown began a debt-fuelled spending spree.

When the Tory-Lib Dem Coalition came to power in 2010, the deficit stood at 9.9 per cent of gross domestic product.

Liz Truss, Chief Secretary to the Treasury, said: ‘Borrowing as a share of our economy is at a 16-year low.

‘This is a testament to the hard work of the British people as we fix our finances and build a Britain fit for the future.

‘We are strengthening the economy whilst cutting income tax and investing in public services. Labour would put that all at risk with their bonkers borrowing binge.’

In the so-called dossier of doom issued two years ago today, former chancellor Mr Osborne said borrowing would hit almost £78billion last year if voters opted for Brexit.

In the Autumn Statement in November 2016, the Office for Budget Responsibility pencilled in borrowing of £59billion as it warned of the impact of the Brexit vote.

In fact, the Government borrowed £40.5billion as tax receipts rose 3.4 per cent to a record £701.8billion. Corporation tax receipts rose 6.3 per cent to £57.7billion.

It borrowed a further £7.8billion in April, the first month of the fiscal year – down from £9billion in the same month last year.

Receipts from income tax and capital gains tax jumped 12.3 per cent to £12.8billion last month as record levels of employment boosted Treasury coffers. VAT receipts rose 2.8 per cent to £11.5billion.

The figures will put pressure on Chancellor Philip Hammond to ease austerity and free funds for public-sector pay rises.

But with the national debt close to £1.8trillion, or 85.1 per cent of national income, he is reluctant to embark on a spree.

The national debt has risen nearly six-fold since 2000, from just over £300billion to nearly £1.8trillion.

The Government spent £54.6billion in debt interest payments alone last year – or more than £1billion a week.