The Chief Secretary to the Treasury has responded to December's
public sector finance
statistics .
Chief Secretary to the Treasury, said:
"Protecting millions of lives and livelihoods during Putin’s
energy shock and a once in a century pandemic has created
economic challenges. However, it is right that we pay back these
debts so future generations are not left to pick up the tab.
“Because of this Government’s decisive action, the economy is now
beginning to turn a corner: Inflation has more than halved. Debt
is on track to fall as a share of the economy. And we have
been able to afford tax cuts for 27 million working people, and
an £11 billion tax cut to drive business investment. “
Additional information:
- We are on track with our plan to get debt falling. We
have doubled our headroom since March, from £6.5bn to £13bn, and
headline debt is now forecast to be 5.5 percentage points lower
as a proportion of GDP by the end of the forecast than before
policy decisions taken in Autumn 2022.
- However, headroom remains low by historical standards. Based
on the November Economic and Fiscal Outlook, just a 1 percentage
point change in interest rates and inflation could cost £29.6
billion by the end of the forecast, more than wiping out the
headroom we currently hold.
- Borrowing will be lower this year, next year and on average
over the forecast, compared to March.
- Borrowing is forecast to fall from £130.1 billion in 2022-23,
to £123.9 billion this year, to £35.0 billion by 2028-29, a more
than £95 billion fall over the forecast. As a percentage of GDP,
borrowing is forecast to fall to the lowest level since
2001/02.
- There is £13.0 billion of headroom against the debt rule and
£61.5 billion against the borrowing rule in the target year
(2028-29).
- Over the 2010-22 period, OECD economies with higher total tax
(as a share of GDP) have on average seen lower cumulative GDP
growth.
- The Chancellor has made it clear that productivity growth in
the public sector needs to improve to stop the state from growing
ever-larger as a proportion of the economy in the years ahead,
while improving how public services operate. Cutting waste
will allow public servants to get back to what they do best;
teaching our children, keeping us safe, and treating us when
we’re sick, while helping us save money to cut taxes.
- An individual month of data can be influenced by fluctuations
and one-off factors, and is a provisional estimate (subject to
revision) when first published. Therefore more emphasis should be
placed on data over longer time periods.
