The UK will hold its next Budget on 6 November – six days after its planned exit date from the EU, according to the Chancellor of the Exchequer.
“This will be the first Budget after leaving the EU. I will be setting out our plan to shape the economy for the future and triggering the start of our infrastructure revolution,” Sajid Javid said.
“This is the right and responsible thing to do – we must get on with governing,” he added.
The government says that in the event of a no-deal Brexit, it would “act quickly” to announce emergency measures, and “take early action” to support the economy, businesses and households.
This would be followed by a Budget in the weeks thereafter.
Mr Javid has already announced the biggest increase in day-to-day spending in 15 years, promising to raise public spending by more than £13bn.
Shadow chancellor John McDonnell described his plans as “grubby electioneering”.
While outlining his spending review in the Commons on 4 September, Mr Javid’s core proposals for the 2020-21 financial year included:
- A 6.3% real terms increase in Home Office spending – the “biggest increase” in 15 years
- An additional £1.5bn for England’s councils to bolster social care
- A £6.2bn increase in NHS funding
- A 2.6% rise in funding for the Ministry of Defence
- A 13% increase in funding to tackle homelessness, taking spending to £422m
- An extra £1.2bn for Scotland, £600m for Wales and £400m for Northern Ireland.
In order to make the most of record-low borrowing costs, Mr Javid has suggested he is prepared to borrow more heavily in the future.
But while Mr Javid has pledged to ensure that borrowing falls below 2% of gross domestic product (GDP) by 2020-21, a rule set out by the previous government, the think-tank Resolution Foundation has suggested that current spending plans already exceed that cap.
Since 2010, the UK has gradually decreased its budget deficit from almost 10% of GDP to just under 2% now.
Analysts also warn that with so much uncertainty still surrounding Brexit and a cooler economy, over-ambitious spending commitments could hurt the UK’s budget credibility.