DISASTROUS financial data released yesterday showed UK public sector borrowing hitting £24.3bn in April, dealing another body-blow to the beleaguered and split Labour government.
The borrowing figure was 25.1 per cent more than in the same month a year ago, according to the Office for National Statistics (ONS).
Record debt interest payments pushed public borrowing higher last month amid fears that Labour leadership changes and the Iran war could drive up debt even further.
The war in Iran has sent government borrowing costs surging on bond markets as investors brace for higher inflation.
The ONS showed the government paid £10.3bn on debt interest repayments, which was the highest for any April on record.
Fears about higher public spending have also unnerved investors in UK debt with the Bank of England (BoE) and the International Monetary Fund (IMF) among a spectrum of economic advisors calling for deep cuts to social welfare and social services spending, to reduce the deficit and appease the financial speculators who buy UK Treasury bonds.
However Andy Burnham, a leading candidate for leader of the Labour Party, has pledged to stick with the tax and spending rules outlined by the current Chancellor, Rachel Reeves.
Lucy Rigby, the Chief Secretary to the Treasury, insisted the government had the ‘right economic plan’ and warned that any change in approach could further destabilise the public finances.
Nabil Taleb at PwC warned that getting debt under control was a priority. He said: ‘Higher debt servicing costs as a share of total revenues leave the public finances more exposed to future economic shocks.’
Meanwhile, amid an exploding UK youth unemployment crisis, Amazon’s UK boss John Boumphrey called for mandatory work experience for all 16-plus young people not in in work, education or training.
Young people out of work is ‘a system problem’ Boumphrey said.
‘It’s not their fault. The education system is not producing young people who are ready for work.’
With nearly a million 16-24 year-olds not in education, employment or training, Boumphrey says Amazon is struggling to recruit workers with the skills it needs.
Earlier this week, official figures show the UK’s unemployment rate rose slightly to 5% in the three months to March, from 4.9% in the three months to February.
Ben Harrison, director of the Work Foundation at Lancaster University, said the crisis was making life ‘particularly difficult’ for young people as the youth unemployment rate has reached 14.7%, its highest since late 2014.
Separate research published by the Institute for Fiscal Studies on Tuesday shows the current fall in youth employment rates is approaching the level of decline seen during the 2008 financial crisis and the Covid-19 pandemic.
Clearly, ‘this ‘work experience’ will also force youth off social benefits to slave away on little or no pay to enhance Amazon’s profits – for a company that has just taken over the giant Walmart store chain in the US to become the world’s largest company based on revenue.
The latest immigration figures show that last year net migration to the UK halved, to 171,000, down from 2.6 millions in 2024 under Tory PM Boris Johnson.
They also reveal that a record number of young people are spurning the UK, with 75,000 more 16-34-year-olds leaving than returning last year.
Further economic collapses reported yesterday include 100 stores to be closed by Morrison’s Supermarket.
There is only one way forward out of this crisis situation. Workers must force the TUC to organise a general strike now to bring down this Labour government and go forward to a workers’ government and socialism in Britain.
Forward to the British Socialist revolution!
