Business

Government debt rises to a record of £1tn

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Media captionTreasury minister David Gauke: "We've got a hard task ahead of us"

Government debt has risen to a record £1 trillion from £883bn a year ago.

The figure was reached after monthly borrowing fell by £2.2bn in December to £13.7bn, official figures show.

However, Chancellor George Osborne is still on course to hit his borrowing target for the financial year of £127bn. The total for the year so far stands at £103.3bn.

The Office for National Statistics said government tax receipts had been boosted by the bank levy.

That was imposed on financial institutions to recoup some of the costs of the financial crisis.

The tax take was also boosted by last January's VAT increase from 17.5% to 20%.

Meanwhile, central government spending fell by 0.9% as debt reduction measures took effect,

The current net debt total of £1.004tn represents 64.2% of UK gross domestic product.

The last time the Treasury recorded a surplus was in the 2001/02 financial year when it repaid £243m.

A Treasury spokesperson said: "That our national debt has reached more than one trillion pounds simply shows the unsustainable level of spending this country built up over the past few years, and shows why it is critical for our nation's future that we deal decisively with the deficit.

"Today's figures show that we are making good progress, with borrowing over £11bn lower than in the same period last year."

Vicky Redwood, senior economist at Capital Economics, said the overall debt level was "a reminder of the enormity of the challenge that still lies ahead to get the public finances back on a sustainable footing".

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