Day-to-day Government spending is now running 23 per cent ahead of last year, with more than £10 billion having been spent in the year to the end of July.

The surge in spending is ahead of the Revised Estimates, which indicated a 20 per cent rise in Government spending this year.

At the same time, tax revenues continue to run behind expectations, according to the latest Exchequer figures from the Department of Finance. At the end of July, the Exchequer surplus was running at £2.99 billion, down from £3.58 billion last year. The yearend out-turn is officially expected to be £2 billion. The picture across different tax categories heads is mixed with spending taxes still very weak, despite predictions they would pick up after the foot-and-mouth crisis.

By contrast, capital gains tax receipts have risen by 46 per cent and stamp duties are up 16 per cent.

Corporation tax is also ahead of schedule at 13 per cent, compared with an admittedly unambitious target of 11 per cent.