Caution in first Budget
of gimmick. Among these was the sharp fall in the estimate for public sector net borrowing this year, down from some £68 billion in the November Autumn Statement to £51.7bn.
However, this owed much to one-off factors, and the PSNB estimate for 2017-18 springs back up to £58.3bn. While further declines are forecast for subsequent years, the figures show that between 201617 and 2021-22 the government will have to borrow another £209bn – so much for that much-vaunted “Brexit war chest”: all it amounts to is that we will be borrowing more but at a slightly less frenetic pace.
As for total government debt, this stands at £1.7 trillion or 86.6 per cent of GDP, while the annual debt interest charge is now sucking £50bn a year out of the national accounts.
One of the depressing features of political life in Britain is that there is no lack of noise from some lobbies for higher spending in this or that area of government but one never sees a demonstration in favour of cutting borrowing or bringing down debt. But the debt interest charge alone is now one of the biggest areas of government spending.
Another welcome feature of the Budget was the announcement of reviews on reform of social care provision – long needed, given that there are now half a million more people over the age of 65 compared with 2010.
A pity such a review together with consultation was not carried out before the business rate revaluation and attendant sharp increases south of the Border. Such has been the outcry that Mr Hammond has now had to provide £435m in variety of reliefs.
Consultation ahead of the next revaluation is now promised, before another round of jumping in feet first: a cautionary lesson that could be usefully applied on all significant tax changes.
“Look before you leap” might well be the admonitory motto for yesterday’s package. As it is, given all the concerns over the forthcoming negotiations with the European Union, it could never have been more than a holding statement. A fuller Budget in the late autumn is now awaited – but it could find “Spreadsheet Phil”
“Total government debt is £1.7 trillion or 86.6 per cent of GDP, while the annual debt interest charge is now sucking £50bn a year out of the accounts”