The Chancellor of the Exchequer, Sajid Javid, will deliver a bigger government budget on March 11, the first after the country leaves the European Union by January end and following Prime Minister Boris Johnson’s sweeping election win last month.
During the campaign, Javid said he would take investment spending to almost double its historic average as he sought to show voters that a decade of tight budget controls was ending.
“People across the country have told us that they want change. We’ve listened and will now deliver,” Javid said on Tuesday, promising “a decade of renewal” and a levelling up of opportunity around the country.
Johnson won a big majority in parliament, paving the way for the UK to leave the EU by January 31. In the hours after his victory, Johnson said he would not disappoint voters who had switched to the Conservatives in traditionally Labour-supporting areas of northern and central England.
The finance ministry said Javid would use low borrowing costs to boost investment, helping the Conservatives meet campaign promises of up to 20 billion pounds ($26bn) a year in extra investments in road, rail and other infrastructure.
The budget would also prioritise the environment, it said.
The UK has some room for manoeuvre on spending having slashed the budget deficit from 10 percent of the gross domestic product in 2010 to about 2 percent now.
Javid announced in September the biggest increase in day-to-day spending in 15 years with a focus on hospitals, police and vocational training.
However, he has committed not to borrow over the long term to fund this so-called current spending which will fall far short of a full reversal of past cuts, despite Johnson offering the prospect of an end to austerity.
The Institute for Fiscal Studies, an independent think-tank, said in November that the Conservatives’ election proposals would leave public spending, excluding health, 14 percent lower in inflation-adjusted terms by 2024 than in 2010.
The IFS also said borrowing could rise sharply if the UK fails to secure a new trade deal with the EU by the end of 2020, when a no-change transition period is due to end, potentially delivering a shock to the world’s fifth-biggest economy.
Labour’s top finance official John McDonnell said he had no confidence that the government would deliver the scale of investment needed, and the lack of focus on the threat of climate change was “criminally irresponsible”.