The Government’s spending review will be unveiled tomorrow with more money expected to be announced for health, education and police.
Writing in The Daily Telegraph, Chancellor Sajid Javid said the review “will be about clearing the decks to allow us to focus on Brexit”.
But he insisted that he would stick to the current borrowing rules, which limit the scope for extensive spending increases, says the BBC. “Any departments expecting a blank cheque will be sorely disappointed,” said Javid.
The chancellor said the review would allow the government to “focus relentlessly on making sure we’re ready to leave the EU on 31st of October” rather than being distracted by government funding when planning for Brexit.
Shadow chancellor John McDonnell said on Twitter: “Nobody is fooled that this is a spending review. It’s a one-off pre election panic driven stunt Budget.
“Each spending announcement is exposed as inadequate & whole areas of spending needs like local councils & addressing child poverty are ignored. This is not serious government,” he added.
In his piece for the Telegraph, Javid said: “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.”
Yesterday Boris Johnson used the platform of the Downing Street podium to blow the government’s trumpet in what sounded like pre-election fanfare.
“I am proud to say that on Wednesday Chancellor Sajid Javid is going to set out the most ambitious spending round for more than a decade,” said Johnson.
So what could be included in the government’s spending plans?
Tax threshold for higher earners
Boris Johnson has committed to raising the threshold at which income tax is paid at 40% from £50,000 to £80,000. The net cost of such a move would be £9bn, according to the Institute for Fiscal Studies.
“Most of the gain goes to those in the top 10% of the income distribution, [who] would gain an average of nearly £2,500 a year,” adds the IFS.
National Insurance
Johnson wants to raise the starting point for National Insurance Contributions to an annual £12,500. The plan “would cost £11bn a year and take 2.4 million people out of paying NICs altogether, but would still offer most benefits to those on higher earnings,” says The Guardian.
Schools
Javid has announced a £14bn boost for school funding in England over three years, says The Guardian.
Figures include £2.6bn for schools in 2020/21 with additional funding increasing to £4.8bn in 2021/22 and £7.1bn in 2022/23.
The funding plan also includes £400m on education for 16-19-year-olds, which Javid claimed was the biggest cash injection for post-16 education in a decade.
Kevin Courtney, joint general secretary of the National Education Union, said: “This schools funding announcement should really come with a note of apology; the government has for so long derided our campaign and said there was no problem with education funding. Nevertheless, the funding announced today is very positive.”
Johnson said yesterday outside Downing Street: “I said I wanted every child in this country to have a superb education and that’s why I announced last week that we are levelling up funding across the country and spending much more next year in both primary and secondary schools.”
The Guardian had previously published leaked documents hinting at Javid’s announcement. Other pledges in the papers include increased pay for teachers, with starting salaries rising to £30,000 by 2022, encouraging school leaders to ban or confiscate mobile phones, backing headteachers who want to exclude pupils and new guidance on behaviour.
The proposals also include offering academy trusts financial incentives to take over struggling schools, opening new free schools, removing inspection exemptions for ‘outstanding’ schools, and converting more local authority maintained schools to academy status.
The majority of these proposals have now been confirmed by Javid and the Department for Education, most notably a rise in minimum salary for new teachers from £23,720 to £30,000, says the BBC.
Shadow education secretary Angela Rayner said: “This comes nowhere close to meeting the prime minister’s pledge to reverse the Tories’ education cuts, let alone matching Labour’s plans to invest in a national education service.
“Instead it is yet another con trick by a politician who has shown time and again that you just can’t trust his promises.”
Health
The NHS is expected to receive at least £1.8bn funding for front-line services, following an announcement by Boris Johnson in August, reports The Telegraph.
Johnson said the entire pledge was additional funding: “Don’t forget that this is £1.8bn of new money. It wasn’t there ten days ago.”
And, in his speech outside Downing Street yesterday, he said: “I said I wanted to improve your hospital and reduce the waiting times at your GP.
“And so we are doing 20 new hospital upgrades in addition to the extra £34 billion going into the NHS.”
But Labour says some of the money was already held by health trusts but had simply not yet been spent.
Jonathan Ashworth, the shadow health secretary, said: “Boris Johnson has misled the public and our NHS staff. You cannot trust a word he says and his claims are unravelling.”
Defence
The chancellor is set to announce an increase in UK defence spending, exceeding the Nato benchmark of spending 2% of GDP.
The move is designed to honour Johnson’s leadership campaign pledge to “exceed the minimum 2% Nato spending target” and “fund defence fully”.
Javid said on Monday ahead of the spending review: “Across our history, Britain has thrived as an open, free-trading nation.
“As we leave the EU, we are deeply committed to playing a leading role on the global stage. That means bolstering alliances, celebrating our culture, building new trading relationships and making sure we can act when needed to keep our people safe.”
Diplomacy
The September spending round will include a £90m boost for British embassies and consulates around the world, and a further £60m to extend the “Great” campaign promoting trade with the UK, says the Telegraph.
Police
Boris Johnson has pledged an extra 20,000 police officers in three years, says The Telegraph.
But Labour has accused Johnson of misleading the public, saying that a letter written by the Home Secretary, Priti Patel, to the London Mayor, Sadiq Khan, last week, says that new officers will be allocated “between territorial, regional and national policing functions”.
This means “as many as 7,000 of the 20,000 officers could be allocated to bodies such as the National Crime Agency”, rather than in front line roles says The Guardian.
The paper puts the cost of the move at £1.1bn.
Stamp duty
The Prime Minister has suggested switching stamp liability from the buyer of property to the seller, and scrapping stamp duty entirely on homes worth £500,000 or less, says Open Access Government.
Stamp duty currently generates £1bn a month for the exchequer and the IFS says £3.8bn a year of that comes from property sold at under £500,000.
Nationwide broadband coverage
Johnson has pledged nationwide broadband coverage by 2025, calling the previous goal of 2033 “laughably unambitious”.
But “without any detail it is just a pledge,” said Andrew Ferguson, editor-in-chief of ThinkBroadband.
“The key to getting excited is dependent on what the pledge means in terms of help for commercial roll-outs and extra funding to ensure that areas unlikely to see commercial roll-out for a number of years can be moved forward.”
Openreach is currently covering 80,000 new home a month with fibre broadband, but that rate would need to increase to 400,000 a month to meet Johnson’s goal, says Wired.
HS2
The Government has pledged to launch an independent review into the future of HS2, which will decide whether to go ahead with the idea, alter it, or scrap it entirely.
George Osborne’s Northern Powerhouse think tank has announced plans to hold its own review into the high-speed railway amid reports that the project may be scrapped by Boris Johnson’s Government.
National Living Wage
Johnson said in a July interview with Sky that he wanted to raise the minimum wage.
However, he didn’t know what the minimum wage – now dubbed the ‘national living wage’ – was. Asked “What is the living wage?” Boris replied “Well, it’s at or around…£10 or so.”
The wage rose from £7.83 to £8.21 on 1 April.
Sports and culture
The spending review is set to include a £46m funding boost for the 2022 Commonwealth Games in Birmingham, with the money to be spent on boosting tourism and jobs linked to the Games.
Licence fee
The BBC confirmed plans in June to remove the right to a free TV licence for over-75s, arguing that the £745m annual cost of paying for over-75s would use 20% of its budget at a time when people in the age bracket are increasingly wealthy.
The 2017 Conservative manifesto pledged to keep TV licences free for over-75s, but later dismissed the pledge as a mistake, says the Guardian.
Charity Age UK has said Johnson is responsible for finding a resolution, and it may be that “the Government might decide to find some extra cash…to avoid a stand-off with older voters and damaging headlines at this juncture”, says This is Money.
