The latest official figures reveal that Britain’s benefits bill has propelled public borrowing to record levels for the month of May, even outside of lockdown. This has resulted in the UK’s debt share surpassing the size of the economy for the first time since 1961.
In May, the government borrowed £20 billion to bridge the gap between tax receipts and public spending. This amount is more than double the £9.4 billion borrowed in the same month last year, as reported by the Office for National Statistics (ONS). It is the second-highest borrowing for May since records began in 1993, second only to the first Covid lockdown in May 2020.
The UK’s total debt now stands at 100.1% of gross domestic product (GDP), crossing the 100% mark for the first time since March 1961. Although the ONS’s chief economist, Grant Fitzner, cautions that the figure is provisional and subject to revision, it signifies that total debt now exceeds the annual output of the UK economy.
The ONS attributes the rise in borrowing to increases in benefit payments, including the state pension, universal credit, and child benefit, which have all risen by 10.1% in April to keep pace with the rising cost of living. Net social benefits amounted to £22.9 billion, £2.9 billion higher than the previous year.
“This increase is primarily due to the uprating of inflation-linked benefits,” stated the ONS.
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