I’ve expressed before on the blog how it is very misleading to talk about spending ‘cuts’. The Government plans laid out in Budget 2011 had current expenditure set to increase in every year of this Parliament. Over £450 billion will be added to the national debt, even if the structural deficit is eliminated by 2015.
The most recent figures from the Public Sector Finance statistics show that current expenditure has been higher in every month of the past year than the year before. In fact, total spending between October 2010 and September 2011 has been 3.2% higher than the 12 months beforehand – an increase of £19 billion. Meanwhile, revenues collected from taxation are up by 5.4% over the same period.
Of course, in real terms (with inflation of the past year 5.2%) this would suggest larger cuts to expenditure with very moderate increases in tax revenues.
Perhaps the starkest statistic - in September our net borrowing was over £14 billion (that’s £470 million every day).