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| UK government borrowing at £90bn | UK government borrowing at £90bn |
| (20 minutes later) | |
| The recession and financial crisis pushed UK government borrowing to a record £90bn in the last financial year, official figures have shown. | The recession and financial crisis pushed UK government borrowing to a record £90bn in the last financial year, official figures have shown. |
| This is higher than the £78bn the chancellor forecast in November and £55bn higher than the previous year. | This is higher than the £78bn the chancellor forecast in November and £55bn higher than the previous year. |
| The figure took the total net debt to £743.6bn, the equivalent of more than half of the UK's GDP, the Office for National Statistics said. | The figure took the total net debt to £743.6bn, the equivalent of more than half of the UK's GDP, the Office for National Statistics said. |
| Falling tax revenues and higher social security spending have hit finances. | Falling tax revenues and higher social security spending have hit finances. |
| Borrowing in March was also a record £19.1bn, the highest level for a single month since records began in 1993. | Borrowing in March was also a record £19.1bn, the highest level for a single month since records began in 1993. |
| The figures are bad, the BBC's chief economics editor Hugh Pym said. | The figures are bad, the BBC's chief economics editor Hugh Pym said. |
| WHY BORROWING MATTERS In simple terms, the government is spending more than it is receiving in tax revenues. It is borrowing to finance the shortfall and this will have to be paid back.It is expected to pay back the money over a number of years by cutting spending and increasing taxes.Meanwhile, the cost of paying interest on the debt could further squeeze the public finances | |
| But the chancellor is expected to announce a borrowing figure perhaps as much as double the £90bn total for next year, underlining the scale of the problems facing the UK's public finances, he said. | But the chancellor is expected to announce a borrowing figure perhaps as much as double the £90bn total for next year, underlining the scale of the problems facing the UK's public finances, he said. |
| Tax take | Tax take |
| Unemployment, which has risen to 2.1 million, has contributed the 9% fall in income tax revenue shown in the figures. The government's benefits bill also rose 1.8%, the ONS said. | Unemployment, which has risen to 2.1 million, has contributed the 9% fall in income tax revenue shown in the figures. The government's benefits bill also rose 1.8%, the ONS said. |
| Businesses, who are cutting production or even closing completely, are paying substantially less corporation tax. Few housing sales also means less stamp duty. | Businesses, who are cutting production or even closing completely, are paying substantially less corporation tax. Few housing sales also means less stamp duty. |
| Having to bail-out banks such as Northern Rock and Bradford & Bingley added £134.5bn to the net debt figure - the stock of all government borrowing - in the year to March. | Having to bail-out banks such as Northern Rock and Bradford & Bingley added £134.5bn to the net debt figure - the stock of all government borrowing - in the year to March. |
| Compensating savers, including those with Dunfermline Building Society which had to be rescued last month, cost a further £9bn. | Compensating savers, including those with Dunfermline Building Society which had to be rescued last month, cost a further £9bn. |