Sajid Javid news: Chancellor set to unveil austerity plans in one-year spending review | Politics | News

In an article for The Telegraph, the Chancellor said he will announce the outcome of a one-year spending review next Wednesday which will increase expenditure on schools, the police and NHS. Despite this, Mr Javid played-down any expectations that the Government would go on a spending spree before Brexit – pledging to stick to the strict fiscal rules he inherited from Philip Hammond and which have governed expenditure for much of the past decade.

He was expected to announce his economic approach as Chancellor in Birmingham on Wednesday, but cancelled the speech at the last minute.

Growing speculation suggested Mr Javid was to renounce the Tories’ tight grip on the expenditure wallet, in a bid to bolster Britain’s economy ahead of period of Brexit uncertainty.

This now appears to have been ruled out, and it is unclear whether he will announce a pre-Brexit budget.

Opinion in Downing Street is said to differ from the Chancellor’s approach, with several senior figures understood to be in favour of abandoning the fiscal rules, particularly in the event of a no deal Brexit.

Making his position clear, Mr Javid writes: “Thanks to the hard work of the British people over the last decade, we can afford to spend more on the people’s priorities, without breaking the rules around what the Government should spend, and we’ll do that in a few key areas like schools, hospitals and police.

“But at the same time, it’s vital that we continue to live within our means as a country. Unlike the Labour Party, we don’t believe in just throwing money at a problem. And especially at a time when the global economy is slowing, it’s important that we don’t let our public finances get out of control.

“So I can confirm that next week’s Spending Round will be delivered within the current fiscal rules.

“As every household knows, that will mean making choices and prioritising where we focus spending, and any departments expecting a blank cheque will be sorely disappointed.”

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The NHS is expected to receive at least £1.8billion for frontline services, following an announcement by the Prime Minister earlier this month.

Another pledge by Mr Johnson includes funding to cover an additional 20,000 police officers.

Mr Javid did not mention spending in several other areas, including defence, which was a prominent feature during the Conservative leadership contest.

Others likely to lose out include local councils, culture and business schemes.

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He writes: “When it comes to spending taxpayers’ money, I make no apology for challenging every decision and making sure every pound is spent wisely.”

Mr Javid also warned of any potential arguments erupting over Government departments campaigning for extra cash, saying they should be wary given the current political and economic climate.

He reasons: “At a time when the Government is completely focused on planning for Brexit, it would be a distraction to start debating every line of government funding.”

Fiscal rules are budget guidelines drawn up and set by chancellors that restrict the amount of money the Government can borrow.

They are broad targets that aim to make fiscal policy more rigid and predictable in order to avoid financial mishaps.

Mr Hammond, the previous Chancellor, was renowned for being fiscally stringent, and set targets of annual borrowing of less than two percent of gross domestic product in 2020/21.

In his efforts, Mr Hammond also planned to balance the books of the Government.

This required the Government to spend no more than what it raised from tax and would thereby eliminate borrowing by the mid-2020s.

However, economists have warned that the Government could have to abandon such targets if it is to go ahead with some of Mr Johnson’s pledges.

If the Treasury wanted to raise speeding without breaking its rule, it could be forced to source revenue from other sources, such as taxes.

The spending review, which covers budget for next year, comes after Downing Street gave ministers the task of coming with their “best scenario” plans.

The budget allocated to schools includes £2.8 billion for primary and secondary schools and £800 million for children with special educational needs – though it is currently understood the Department for Education’s proposal is an “ideal world” plan that may not ultimately include all the money.