Javid sets March 11 date for UK budget to deliver on vows

Bloomberg

Chancellor of the Exchequer Sajid Javid promised to unleash “a decade of renewal” when he outlines his budget on March 11 as he seeks to ready the UK for its departure from the European Union.
Javid’s office said he will make good on pledges to cut taxes and spread opportunity as he announced the date for the statement, postponed from November. He will build on plans outlined during the election campaign to increase borrowing for investment by jettisoning government fiscal rules to allow the UK to capitalize on low interest rates, the Treasury said.
Boris Johnson’s Conservative Party won a commanding 80-seat majority in Parliament last month after promising to deliver Brexit and boost public spending on hospitals, police and infrastructure. The premier now needs to deliver if he’s to cement the support of voters in blue-collar areas who’ve traditionally voted for the opposition Labour Party but switched to back his programme on December 12.
“People across the country have told us that they want change. We’ve listened and will now deliver,” Javid said in an email. “With this Budget we will unleash Britain’s potential — uniting our great country, opening a new chapter for our economy and ushering in a decade of renewal.”
The new fiscal rules, outlined by the chancellor in November, commit Johnson’s government to balancing the day-to-day budget and limiting investment to 3% of gross domestic product — compared to 2% under current restrictions. That would allow an extra 20 billion pounds ($26.3 billion) a year to be spent on capital projects such as railways and roads, though Javid said the plans for extra borrowing would be reassessed if debt-servicing costs rise significantly.
The chancellor was expected to update cabinet colleagues on his plans on Tuesday morning before answering questions in Parliament, his office said.
During the election campaign, the Conservatives promised not to raise rates of income tax, national insurance or value-added tax. They also pledged to increase the threshold for paying national insurance, an employment tax, to 9,500 pounds in their first budget. That would deliver a modest tax cut for most British workers.
Javid is also promising an additional 8 billion pounds of capital spending by the time of the next election in 2024 and further commitments are expected to be announced in his March budget.
However, his room for further tax cuts and day-to-day spending increases is severely limited, with the current budget — which excludes investment — forecast to be in surplus by just 5 billion pounds in 2023-24. Such a small margin could easily be erased and jeopardize Javid’s balanced-budget rule.
Spending has risen much faster than projected since March, and on Tuesday the Debt Management Office announced it was raising planned sales of government bonds, or gilts, by 14 billion pounds in the 2019-20 fiscal year as a whole. Yields rose in early London trading.
Javid will announce measures to help the environment alongside investment in new hospitals, police officers and in-work training in his March 11 statement to Parliament, his office said.