Chancellor Sajid Javid presented his Spending Round — what other people would call his election Bribes to Parliament.
Javid told the House of Commons: “We are turning the page on austerity and beginning a new dacade of renewal. A new economic era needs a new economic plan and today we lay the foundations, with the fastest increase in day-to-day spending in 15 years”
Showing no grace, he said: “These aren’t just numbers on a spreadsheet” Clearly a snidey reference to the former chancellor Phillip Hammond, known as “spreadsheet Phil” who lost the Tory whip the night before over his part in the Government defeat.
Whether it’s an auspicious Spending Round and whether the details remain the same after a General Election remain to be seen.
Nevertheless, in its briefing on the round, the Resolution Foundation think tank said “The scale of extra spending in 2021 means the treasury is almost certain to have broken its fiscal mandate To keep borrowing below 2% of GDP next year on the basis of the last forecast from the Office for Budget Responsibility (OBR) published in March. The Chancellors £13.4 Billion borrowing increase could have just fitted within his £14 billion of Fiscal Headroom.”
However, higher borrowing and slower growth since March reinforced by very weak surveys released just ahead of Todays spending round, mean that this headroom is now likely to be far less than todays spending and borrowing increases”
Unfortunately for the Treasury, its twitter feed covering the round gave the game away. Its animated graphic featured a union jack which was upside down. As one twitterer pointed out, ‘flying the union jack in an upside down position is a signal indicating a situation of distress’
Day-to-day departmental spending will now grow by 4.1% above inflation in 2020-2021 compared to the previous year, according to Javid with £13.4 billion more for public services.
