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UK chancellor sets date for spending round before Brexit

Tom Belger
Finance and policy reporter
Boris Johnson and Sajid Javid. Photo: Aaron Chown/Pool via REUTERS

The UK government will unveil its tax and spending policies before Brexit in a spending round announcement next week, the Treasury has confirmed.

Chancellor Sajid Javid had planned to give a speech on the economy this week, but it was delayed as he confirmed he will instead reveal the government’s spending plans in parliament on 4 September.

The fast-tracked spending round will only set departmental budgets for the 2020-21 year ahead, rather than across several years like a typical spending review. A full spending review will be held in 2020.

The Treasury said in a press release the spending round will “deliver on the prime minister’s priorities,” including cash for health, schools and the police.

The Treasury has previously said the spending round will include funding Johnson’s campaign pledge to recruit 20,000 extra police officers.

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But expectations of a significant ramping up of government spending overall has fallen, as the chancellor pledged to meet the “existing fiscal rules” limiting spending under former chancellor Philip Hammond.

The Treasury said: “Thanks to the hard work of the British people over the last decade, we can afford to spend more on the people’s priorities while still meeting the fiscal rules.”

The announcement is intended to help departments and devolved administrations plan for the year ahead by giving a degree of financial certainty.

But some observers see the announcement as another sign the Conservative government could soon call a general election, giving maximum airtime to policy pledges before putting them to the vote.

The value of a spending round before Brexit has also been widely questioned, given a no-deal Brexit could cause economic shockwaves that heap pressure on the government to hold an emergency budget.

John McDonnell, Labour's shadow chancellor, said: "Nobody is fooled into believing that this is a proper and normal spending review. It's a one-off pre-election panic-driven stunt budget.

"As each spending announcement is dribbled out it is exposed as inadequate and whole areas of spending needs like local councils and addressing child poverty are ignored. This is not serious government."