Government budget under great pressure
When you consider that during April and May corporation tax income was down a significant 27% to just £5.2 billion, VAT was down 21% to £11.9 billion and income tax came in at just £21.1 billion which was also a significant fall of 14%, UK public finances are not looking good. These figures on their own are bad enough but when you also consider that social security benefits rose 8% to £13.5 billion it is easy to see why the UK budget is in such a mess.
Even if, as suggested by the Chancellor of the Exchequer, the green shoots of recovery are starting to appear it will still be some way off before social security benefit payments start to fall and tax revenues start to increase. As a consequence the UK budget deficit is set to get significantly worse during the latter part of 2009 and a full-blown recovery in the UK economy and UK finances may still be some way off.
To many people it is only when figures in the hundreds of billions of pounds, and potentially trillions of pounds, are mentioned that the problems encountered by the UK government start to hit home. When we hear government departments arguing over "a few million pounds" the fact we are now in debt to almost £1 trillion makes everything else seem rather trivial.
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