George Osborne to mandate government budget surplus in the "good times" - but when was the last budget surplus?

 
Ashley Kirk
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Chancellor George Osborne arrives at the meeting between G7 finance ministers in Dresden (Source: Getty)

George Osborne will say tonight that he intends to force future governments to run a budget surplus in order to "prepare for an uncertain future".

In a major speech in the City of London tonight, the chancellor will announce that he will enshrine in law the need for future governments to run an overall budget surplus, making budget deficits illegal.

But just when was the last budget surplus, and how easy is it for the government to reach that level?

We haven't had a surplus in over a decade

The last budget surplus was in the financial year 2001-02, when the government brought in £17bn.

That year, it spent £347.3bn, while gaining £373.7bn in receipts.

Over the last 30 years, governments have only run budget surpluses for eight.

In 2014-15, the UK had a deficit of £53.1bn, including debt repayments. This was down on the £100.9bn deficit in 2009-10, but still significantly higher than any budget surplus in the last three decades.

The government spent £648.9bn last year - up 86.8 per cent on 2001-02 levels - while bringing in £613.1bn.

Expenditure is slowly being brought down to receipts' level

Since the Tories gained power in 2010, expenditure is slowly being curbed back - helping to reduce the deficit, although not as quickly as Osborne initially promised.

Even when the UK government brings in more money than it spends, it is by a relatively small amount. It shows how difficult it is to actually run a budget surplus - the last of which we saw in 2001-02.

UK receipts and expenditure chart

We've borrowed for 15 of the last 18 years

In his speech, Osborne said that: "In normal times, governments of the left as well as the right should run a budget surplus to bear down on debt and prepare for an uncertain future".

Again, however, the figures show us that this is an ambitious aim. The UK government net borrowing level has been negative for just three out of the last eighteen years. Since 1997-98, this has amounted to £1 trillion in borrowing.

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