ONS Figures Show GBP17bn UK Budget Surplus

by Jason Gorringe, Tax-News.com, London

26 February 2008

Figures released by the Office of National Statistics (ONS) last week have revealed a public sector budget surplus of GBP17bn compared with a surplus of GBP14.8bn in January 2007.

The ONS explained that: "Concentrating on one month in isolation can give a distorted picture as movements can be erratic. Focusing on the financial year to date generally provides a better overview. Between April 2007 and January 2008 of the financial year 2007/08, the public sector recorded a deficit of GBP8.5bn. At the same stage of the 2006/07 financial year, a deficit of GBP3.7bn had been recorded."

An alternative measure of the public sector fiscal position is public sector net borrowing. This additionally takes account of capital investment. In January 2008, there was net lending of GBP14.1bn, which compares with lending of GBP11.8bn in January 2007. The Pre-Budget forecast for 2007/08 is net borrowing of GBP38bn.

Net debt was recorded at GBP512.4bn at the end of January, compared with GBP480.1bn a year earlier. The Pre-Budget forecast for net debt at the end of March 2008 is GBP542.4bn.

According to reports, the surplus was in part due to increased corporation tax receipts, which were 22% higher than last year.

Income tax receipts were also reported to be 14% higher than during the same period of 2007.

Speaking to Accounting Web News with regard to the figures, John Hawksworth, head of macroeconomics at PricewaterhouseCoopers, commented: “Today’s public finances arrived in the nick of time to get the Chancellor out of a tight spot on his borrowing forecasts ahead of the Budget.”

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