National debt £2.1tr after £19bn increase in borrowing

GOVERNMENT BORROWING rose by £19.1bn last month to a total debt of £2.131 trillion, according to figures from the Office for National Statistics (ONS).

It was the most the public sector has borrowed during any February since records began in 1993.

Chancellor Rishi Sunak, who has overseen the Treasury’s response to the pandemic, pledged early on to provide whatever support businesses needed to help them through the Governmentimposed lockdowns.

“Coronavirus has caused one of the largest economic shocks this country has ever faced, which is why we responded with our £352bn package of support to protect lives and livelihoods,” he said, adding that this was the “fiscally responsible” thing to do.

“But I have always said that we should look to return the public finances to a more sustainable path once the economy has recovered, and at the Budget I set out how we will begin to do just that, providing families and businesses with certainty.”

The Government has relied heavily on borrowing to fund spending as tax receipts have also gone down. However, Mr Sunak has signalled that tax rises are likely in coming years, already announcing a plan to increase corporation tax from 19 per cent to 25 per cent for large companies by 2023.

Liberal Democrat leader Sir Ed Davey, meanwhile, has called for a “bold” £5.5bn-a-year tax break for small businesses as he urged the Government to put them at the heart of recovery.

In his speech to the party’s online spring conference yesterday, Sir Ed was set to call on Chancellor Rishi Sunak to “slash” national insurance contributions (NICs) for small firms by quadrupling the employment allowance from £4,000 to £16,000.