Face of Nation : The chancellor, Sajid Javid, has promised “a decade of renewal” after he set out plans for government spending covering the first year outside the EU, with an extra £13.4bn in public spending for 2020-21. Once capital spending is included, the increase amounts to a rise of 4.1% over this year.
Javid said he could increase spending after the annual spending deficit – the difference between government income and borrowing – had fallen to 1.1%, well below the 2% target set by the Treasury.
Speaking in the Commons to announce the spending review, he said the cost of government borrowing had fallen to historic lows, giving the government further room to increase spending. “We will bring about a decade of renewal. We will build a global Britain where we will walk tall,” he said.
No government department will have its budget cut next year in real terms, he said, adding that this protection “is what I mean by the end of austerity.” Javid said the government’s commitment to boost spending was reflected in a three-year spending pledge for education, contrasting with the one-year commitments to other departments.
Some of the government departments hardest hit by 10 years of austerity will receive a boost, including the Ministry of Justice, which will receive a 5% increase, and further education, which was allocated a further £400m. An additional £2bn for the Ministry of Defence was also outlined, handing the military a 2.6% increase in real terms.
He said the government would set aside £2bn in addition to the £6bn already allocated for preparations related to leaving the EU without a deal. There will be an extra £6.2bn next year for the NHS, including a £2bn boost to new hospital building and maintenance. There will be an extra £1.8bn for education, a rise of £1.1bn in the annual police budget by 2021-22 and a rise in local government funding of £3.5bn next year, including £1.5bn extra for social care.
“A good school, inspirational teachers, are the most effective engine for social mobility that there is. That’s why today we are delivering on our pledge to increase school spending by £7.1bn by 2022-23,” he said.
The review comes against a backdrop of a weakening domestic economy and falling exports. Recent surveys have shown that a contraction in GDP of 0.1% in the second quarter of the year will accelerate to nearer 0.3% in the third. Two consecutive quarters of negative growth indicate the economy is in a recession.
Businesses have complained that the threat of a no-deal Brexit, alongside slowing global trade, has deterred customers from spending, forcing firms to reduce investment and cut employment.
