How do government finances work
In the run-up to the 2019 general election, political parties have been setting out their plans for the country.
Why does a government borrow money?
The government borrows because it spends more than it receives in revenue, which comes mainly from taxes.
It could, in theory, cover all of its spending from taxes – and in some years that has happened.
How much does the government borrow?
The amount the government borrows to make up the difference between what it spends and what it collects is known as “public sector net borrowing”. It’s also often referred to as “the deficit”.
The government has borrowed £46.3bn so far this financial year, from April to October, according to the Office for National Statistics (ONS).
When does it have to be paid back?
It varies a lot.
Some government borrowing has to be repaid in a month, but some lending is for as long as 30 years.
The minimum repayment period is just one day, while some bonds have been issued for 55 years.
How do Government Finances Work 