UK politics live: Fresh blow for Reeves as borrowing rises to £10.7bn ahead of spring statement

Commenting on official figures showing Government borrowing topped forecasts last month, Darren Jones, Chief Secretary to the Treasury, said: “We must go further and faster to create an agile and productive state that works for people.

“That’s why we’re refocusing the public sector on our missions and, for the first time in 17 years, going through every penny of taxpayer money line by line, to make sure it is helping us secure Britain’s future through the plan for change.

“At the core of this urgent mission is sound public finances, based on our non-negotiable fiscal rules.

“This Government will never play fast and loose with the public finances.”

The latest borrowing figures are “yet another major blow to the Chancellor’s faltering plan for growth”, the Liberal Democrats said.

Lib Dem Treasury spokeswoman Daisy Cooper said: “Today’s concerning figures are yet another major blow to the Chancellor’s faltering plan for growth and show her approach is simply not working.

“The Chancellor has failed to turn the page of the years of Conservative economic vandalism. Instead, Reeves’s jobs tax will hammer small businesses, painting herself into a corner on her own fiscal rules.

“The only way to rebuild our public services is through meaningful growth, but unless the Chancellor sees sense and scraps her jobs tax at the spring statement hardworking families and small businesses will continue to pay the price.”

UK Government borrowing soared above forecasts last month as public sector spending rose, putting pressure on Chancellor Rachel Reeves ahead of her spring statement.

The Office for National Statistics (ONS) said public sector net borrowing was £10.7 billion in February.

This was £100 million more than the same month last year and the fourth-highest February on record.

It was also £4.2 billion more than had been forecast by the Government’s official forecaster, the Office for Budget Responsibility (OBR), and more than some economists had been expecting.

The borrowing figure refers to the difference between what the Government spends on the public sector and what it receives in income from tax and other receipts.

Overall central government spending totalled £93 billion in February, £3.8 billion more than the same month last year, when the Conservative government was in power.

The dour Scotsman holding the title of chancellor of the Duchy of Lancaster and Cabinet Office minister, Pat McFadden, doesn’t seem much of a space cowboy but he has in common with Elon Musk an apparent zeal to eliminate waste.

Being more sensible and considerably less excitable than his (rough) US counterpart, McFadden has not yet egregiously breached the British constitution but he has summarily abolished almost all of the civil service “credit cards”, a distinctly Doge-like action. It’s more than just a symbolic move…

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When I resigned from David Cameron’s government as the secretary of state for work and pensions in 2016, welfare stood at £61.6bn. By the end of this parliament, it is projected to be £108.7bn. Sickness benefit alone, which was £19bn back then, is set to rise to £32bn.

So it is with disability benefit, which is set to rise from £11bn to some £31bn. To govern is to choose. Against the backdrop of an increasingly unsafe world, the need to invest significantly more in defence, and a flatlining economy, further reform of welfare is a necessity.

The pandemic response has hit the welfare budget hard. The rise in sickness benefit claims poses a challenge to the government, particularly because some 60 per cent of claims since Covid are from mental health issues. The majority of these are for depression and anxiety.

The health department has declared that the best treatment for depression and anxiety is going back to work. That is why, as sickness benefit moves into universal credit, the possibility of large-scale reform opens up for the government.

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Around that time, with inflation rising fast and the BoE seeking to stem it, the base rate jumped from 3.5 per cent at the start of February to 5.25 per cent by August – causing a sharp increase in mortgage repayments, a battle for savers among banks and plenty of other side effects.

With both inflation and interest rates (generally, slowly and not always constantly) on the way back down, February saw the first decrease the BoE (or their Monetary Policy Committee, technically) have applied since November last year, amid an eventual government aim to stem inflation at two per cent.

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Brexit has created a “mind blowing” nearly two billion extra pieces of paperwork for businesses – enough to wrap around the world 15 times.

If they were all laid end to end they would also reach to the moon and half way back again, an analysis of research by the Chartered Institute of Export & International Trade by the Liberal Democrats found.

Lib Dem trade spokesperson Clive Jones said it showed the scale of red tape plaguing British businesses since the UK’s withdrawal from Europe.

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That compares to 71 per cent of the public who said they trust the Covid jab a great deal or a fair amount, and just 24 per cent of voters who said they do not trust it much or at all. Reform voters are also significantly more likely to not have been vaccinated against Covid during the pandemic, the poll found.

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The Conservatives are facing an “extremely difficult” challenge in May’s local elections, Kemi Badenoch warned as she launched the party’s campaign to win town halls.

The Tory leader was also defiant about the threat her party faces from Nigel Farage’s Reform UK, urging voters to remember politics is not “showbusiness” and that “you will have to live with what you vote for”.

Voters across a number of county councils and unitary authorities in England will go to the polls on May 1, the first major electoral test since last July’s election.

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