𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves has been accused of destroying the economy with soaring taxes and “irresponsible spending” after borrowing rose to £112billion in the current financial year. The Government’s spending spree has led to the fifth-highest borrowing on record, Tories said, while inflation remains high and unemployment is growing.

Highlighting figures for the current financial year, starting in April 2025, Shadow Chancellor Sir Mel Stride said: “Labour have borrowed £112.1billion so far this year – the fifth-highest borrowing on record. Record-high taxes and irresponsible spending have weakened the economy.” Sir Mel pointed out that Health Secretary Wes Streeting had privately admitted Labour had no strategy to grow the economy.

The Shadow Chancellor said: “With youth unemployment now higher than in Europe, inflation above target and the economy stagnant, Wes Streeting is right – Labour have ‘no growth strategy’.

“Neither Labour nor Reform have the serious answers to stabilise the public finances. Only the Conservatives have a leader with a backbone, the plan and the team to get Britain working again.”

Latest economic figures offered a ray of hope for the Chancellor ahead of her spring statement on March 3, as it emerged tax revenues were higher than expected in January.

The Office for National Statistics (ONS) said there was a public sector net borrowing surplus of £30.4billion in January. It is the highest borrowing surplus – when the Government receives more in tax and other revenues than it spends – for any month since records began in 1993.

The surplus was also £6.3billion bigger than predicted by the Office for Budget Responsibility (OBR) and £15.9billion higher than the same month a year ago.

It came after the Government received a record tax take for January.

Central government tax receipts increased by £13.3billion to £109.7billion, the ONS said.

The Government brought in more tax revenue via capital gains tax, rising by £7billion to £17billion for the month, surpassing forecasts.

This increase was linked to a rise in capital gains tax for most assets in the Labour Government’s first autumn Budget in 2024.

Friday’s data also showed that self-assessment income tax receipts lifted by £3.6billion to £29.4billion for January, again beating OBR forecasts.

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Meanwhile, Government spending edged slightly lower – by £0.6billion – to £86.1billion for the month.

This was supported by a drop in debt interest costs, with recent falls in interest rates helping to bring these payments down by £5billion to £1.5billion – the lowest level since March 2020.

ONS chief economist Grant Fitzner said: “January – which is traditionally a strong month for self-assessed tax receipts – saw the highest surplus since monthly records began.

“Revenue was strongly up on the same time last year, while spending was little changed, due to lower debt interest payments largely offsetting higher costs on public services and benefits.

“Across the first 10 months of the current financial year, borrowing is lower than the same period a year ago.”

Chief Secretary to the Treasury James Murray said: “We have the right plan to build a stronger, more secure economy.

“We have doubled our headroom, we are bringing inflation down, we are making sure that taxpayers’ money is spent wisely, and borrowing this year is forecast to be the lowest since before the pandemic.”