Ray of sunshine for govt as tax receipts rise
By Ian Dunt
The government has enjoyed a rare ray of sunshine as tax receipts grew much faster than expected.
UK public accounts enjoyed the largest surplus since July 2008 last month, following a strong rise in income tax payments.
The news comes as chancellor George Osborne received praise from US treasury secretary Timothy Geithner, who said he was “very impressed, as just one man looking from a distance, at the basic strategy that he’s adopted”.
But he displayed caution in his interview with the Today programme, as Mr Geithner said deficit reduction plans needed to be calculated to preserve growth – a charge frequently levelled at the coalition.
“You need to bring [the deficit] down in a way that is reasonably growth friendly, and still preserves the capacity for investments,” he said.
“If you don’t do that, if you mis-calibrate, then the risk is that you make the problem worse over time.”
January is traditionally a month with strong surpluses in public accounts as a range of tax bills come in.
But the jump from £1.266 billion last year to £3.735 billion this year will please Treasury officials, who needed some good news after a constant drip feed of economic criticism and high unemployment figures gave the opposition succour.
