National Insurance raid and Covid recovery help Sunak pull in an extra £10bn in April

RISHI SUNAK raked in £10bn more last month than in April 2021 as the National Insurance raid and the economic recovery combined to help restore the public finances, raising pressure on the Chancellor to ease the cost of living crisis with tax cuts or cash handouts.

But much of the cash could be sucked away in interest payments as one quarter of the national debt is linked to the RPI measure of inflation, which hit a 40-year high of 11.1pc last month.

Economist Michal Stelmach, at KPMG, warned that as a result “we now expect monthly interest spending to reach an eye-watering £16bn in June, exceeding the annual day-to-day budget of the Home Office”.

This is almost four times April’s interest payments of £4.4bn.

Mr Sunak borrowed £18.6bn in April, the Office for National Statistics said, down from £24.2bn a year earlier but still the fourth highest of any April on record.

The Treasury received £70.2bn in revenues, up £9.9bn on the year, according to the Office for National Statistics, while central government spending fell by £4.1bn to £88.8bn.

Paul Dales, at Capital Economics, said this “will only add to the pressure on the Chancellor to go big when finalising the imminent support package for households” suffering from inflation, which hit 9pc last month.

April was the first month of the higher National Insurance tax rate, which the Chancellor ramped up for workers and for businesses, adding an extra 1.25 percentage points to the rate for staff and their employers.

As a result, the Treasury received £13.4bn in compulsory social contributions in the month, a rise of £1.4bn, or more than 11pc, on the year.