Public Finances Show Little Progress Made On Defecit Reduction
22 May 2013 in Chamber News
1. Public sector net borrowing in April 2013 was £1bn lower than in April 2012 on a comparable basis
2. Public sector net debt in April 2013 was 75.2% of GDP
Commenting on the public sector finances for April 2013 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:“The latest public finance figures show that borrowing is £1bn lower than a year ago, but only on a comparable basis. April is the first month of the financial year, so it is too early to draw conclusions about future developments. What is clear is that our public finances are facing many challenges. The forecast published by the OBR at the time of the Budget shows that deficit reduction has made little progress in the last two years and in the current year, only a marginal decline is expected.
“Britain’s structural deficit is still unacceptably high, and the likely increase in the county’s net debt reinforces the need for a realistic plan to bring the deficit down. The Chancellor should reallocate priorities within the existing spending envelope while continuing to make real cuts in current spending. He must put more emphasis on measures such as investment in infrastructure as this will enhance the productive potential of the economy in the medium-term. If the Chancellor demonstrates continued commitment to a realistic fiscal plan, the markets will allow him greater flexibility. He can then choose whether to use the flexibility that his own plans provide. Any room for manoeuvre should be used to help businesses create jobs and growth, which will in turn drive the economic recovery.”