A fall in National Insurance contributions helped push up borrowing in April, said Grant Fitzner, the chief economist at the Office for National Statistics.
He said: “At £20.5 billion in April, borrowing was up £1.5 billion on April last year.
“While central government spending and income overall both rose on this time last year, a large drop in National Insurance contributions meant receipts did not grow as fast as spending.
“Here, falls in expenditure on energy support were offset by increases in benefit spending from the annual uprating. Relative to the size of the economy, debt remains at levels last seen in the early 1960s.”
The National Insurance cuts introduced by Chancellor Jeremy Hunt at his Budget were welcomed by Britons who wanted to keep more of the cash they earn, but in slashing the second tax on income Mr Hunt ensured that a steady stream of Government income was reduced.
The Treasury has defended its spending record after borrowing came in at £20.5 billion for last month, the fourth-highest April since records began in 1993.
A spokesperson for the Treasury said: “We rightly protected millions of jobs during Covid and paid half of people’s energy bills after Putin’s invasion of Ukraine sent bills skyrocketing – but it wouldn’t be fair to leave future generations to pick up the tab.
“That’s why we must stick to the plan to get debt falling. The economy is turning a corner, with strong growth this quarter and inflation close to target, allowing us to cut taxes for the average worker by £900 a year.”
The Office for National Statistics (ONS) estimated that public sector net borrowing was £1.5 billion more than in 2023.
Britain’s official forecaster, the Office for Budget Responsibility, had estimated borrowing would come in at £19.3 billion for April.
