Spending Round 2019: Sajid Javid's speech
4 Sep 2019 02:03 PM
The Spending Round speech in full
Let me start by saying a few words about the circumstances of today’s statement.
With just 57 days to go until Brexit, we’ve delivered the fastest Spending Round in history…
…clearing the decks to allow the government to focus on leaving the European Union on 31 October.
But as the Prime Minister said on Monday, we don’t have to wait until Brexit happens to make progress on people’s priorities.
Today I announce our spending plans for Britain’s first year outside the European Union.
[political content redacted]
We are turning the page on austerity and beginning a new decade of renewal.
A new economic era needs a new economic plan, and today we lay the foundations…
…with the fastest increase to day to day spending for 15 years.
The plans I announce today mean we can build a safer Britain where our streets are more secure.
A healthier Britain where we care for people throughout their lives.
A better educated Britain where every child and young person has the opportunity to succeed, no matter where they come from or who their parents are.
We will build a Global Britain where we walk tall in the world with more, not less, of a presence on the international stage.
A modern Britain where we embrace diversity as a strength.
An enterprising Britain where we are proud of our scientists, our inventors and our entrepreneurs.
A prosperous Britain where we live within our means and growth comes from every corner of this union.
Today we lay the foundation for a stronger, fairer and more prosperous future for our great country.
It’s been three years and three months since the British people gave us their instruction to leave the European Union.
If people are going to have faith in the ballot box again, we absolutely have to follow through on that instruction.
That is why we have set a deadline of 31 October – now 57 days away.
The government still believes that the best outcome would be to leave with a Deal.
And we could not be more serious about negotiating with the EU.
My RHF the Prime Minister has set out our position, and our central ask is clear – to remove the anti-democratic backstop from the Withdrawal Agreement.
But without the ability and willingness to walk away with No Deal, we will not get a good deal.
I know that some businesses and households are concerned about what a No Deal outcome would mean for them.
I recognise that, and I understand that the uncertainty around Brexit is challenging.
But this is ultimately a question of trust in democracy.
In the end a strong economy can only be built on the foundation of a successful democracy.
So let me reassure you of this:
If we leave with No Deal - we will be ready.
Within my first few days as Chancellor, I provided an extra £2.1 billion of extra funding for Brexit funding and No Deal preparedness.
Today I can announce that we provide a further £2 billion for Brexit delivery next year as well.
That means more Border Force staff, better transport infrastructure at our ports, more support for business readiness.
I’ve tasked the Treasury with preparing a comprehensive economic response to support the economy if needed. And we’ll work closely with the independent Bank of England to coordinate fiscal and monetary action.
Sensible economic policy means we should plan for both outcomes.
And we are doing so.
But we should be careful not to let our focus on planning and preparedness distract us from the opportunities that lie ahead.
Brexit will allow us to reshape the British economy and reaffirm our place as a world-leading economic power.
We’ll have the opportunity to design smarter, more flexible regulation.
Or to cut red tape where it stifles innovation.
We’ll be able to replace inefficient EU programmes with better, homegrown alternatives.
Even if we leave with No Deal…
…I’m confident we will be able to secure a deep, “best in class” free trade agreement with the EU…
…and be able to pursue a genuinely independent trade policy with the rest of the world.
Deal or No Deal, Mr Speaker – I’m confident that our best days lie ahead.
While the immediate outcome of the talks may still be uncertain, there are some things that we can be certain about.
As we look towards a future outside the EU, we can build on some extraordinary economic strengths.
At its heart, this country is an open, outward-looking trading nation. We are at our best when we look out to the world beyond our shores.
That’s not just a slogan – we are the number one destination in Europe for inward investment.
Our language, our time zone and most of all our people make the UK a global hub for business.
We’re the home of world-class companies.
A stream of ideas and innovations flow from our brilliant universities and research institutes…
…that have made the UK second only to the US in the all-time rankings for Nobel Prize winners.
And we have an economic landscape watched over by long standing, well-respected institutions.
All of that will continue as we forge a new economic relationship with the EU.
[political content redacted]
When I first took my seat as the Member for Bromsgrove in 2010, the most pressing task we faced was to restore our public finances.
[political content redacted]
My two immediate predecessors took the difficult decisions we needed to get the deficit under control.
Not for ideological reasons.
But because running an enormous deficit meant our debt was rising at an unsustainable rate…
…making our economy vulnerable to shocks, and passing on a huge burden to the next generation.
The deficit is now down to 1.1% of GDP.
For the first time in a generation public sector debt is falling sustainably as a share of our national income.
And we’ve boosted our credibility around the world and built confidence in the UK economy again.
[political content redacted]
Thanks to the difficult decisions we took…
…and the hard work of the British people…
…we can now afford to turn the page on austerity…
…and move forward from a decade of recovery to a decade of renewal. Mr Speaker,
Our careful management of the public finances means we can now afford to invest more in our vital public services.
So today I am deciding to set the real increase in day-to-day spending next year at £13.8 billion.
Delivering on the people’s priorities across the NHS, education and police…
…giving certainty to all departments about their budgets for next year…
…and clearing the decks for government to focus on delivering Brexit.
I’ve always believed in the importance of living within our means.
And unlike the party opposite I won’t squander the hard work of the last nine years.
So even with this extra spending we are still meeting our current fiscal rules next year.
[political content redacted]
Boosting wages and raising living standards – which have stagnated for too long.
Levelling up across our regions and nations.
And funding our vital public services.
Over the long term, the only way we can do that is to raise our productivity – the amount we produce for every hour worked.
This isn’t just some technical term.
Slower productivity means lower wages and uneven growth across the country.
If productivity had continued to grow at its pre-crisis rate, average annual wages today would be over £5,000 higher.
That pressure on people’s pay packets speaks to a wider sense of disillusion and unfairness…
…especially in so many towns and cities outside London and the South East.
Even as the economy has grown, and people have worked hard, not everyone feels they’ve benefited.
A real sense of anxiety has emerged over recent years.
A sense that politicians aren’t listening.
That the system isn’t working.
That the free market model isn’t living up to its promise.
We’re seeing divisions emerge in our society and politics.
Not just between Remain and Leave.
But between regions and communities, rich and poor, rural and urban, young and old, black and white.
Addressing those concerns will require a serious effort.
So we will develop a new economic plan for the years ahead.
A plan that moves beyond the last decade of economic recovery and looks forward, to a decade of renewal.
A plan that invests more in the future growth of this country.
We can afford to invest more because our economy is growing and our public finances are strong.
And we are also deciding on our fiscal approach at a time when the cost of government borrowing is at record lows.
Interest rates have been low for many years, and in recent weeks the cost of government borrowing has fallen below 1% across all maturities.
In the years after the financial crisis many expected interest rates to swiftly rise to pre-crisis levels.
But structural factors have kept rates low…
…not just in the UK but across the developed world…
…increasing our confidence that we will continue to see low rates for a number of years.
So it is my judgement today that with a strong fiscal position and a record low cost of borrowing, we can invest more in growing our economy.
That doesn’t mean we can borrow more and more forever.
The sustainability of the public finances depends on wider factors, not just the cost of borrowing:
Our population is ageing.
The global economy is slowing.
The challenge of decarbonisation is real.
We won’t be able to afford everything, and we’ll need to prioritise investment in policies that deliver real productivity gains and boost economic growth in the long term.
We’ll still need to make difficult choices about our national priorities, within a clear set of rules to anchor our fiscal policy and keep control of our national debt.
So, Mr Speaker,
Today I can announce that ahead of a Budget later this year I will review our fiscal framework…
…to ensure it meets the economic priorities of today – not of a decade ago.
The first priority of our new economic plan will be to rebuild our national infrastructure.
High quality and reliable infrastructure is essential to how we live, work and travel.
But the truth is that across many decades governments of all colours have under-invested in infrastructure.
The quality of our infrastructure means we’ve fallen behind our competitors.
We’re the world’s fifth largest economy.
It isn’t good enough that we’re so far behind on infrastructure.
It isn’t good enough that so many commuters spend their mornings staring at a delayed sign on the train platform.
It isn’t good enough that our small business owners waste so much time because of slow internet speeds and poor mobile connections.
We’re going to change that.
We want faster broadband for everyone in the country.
Quicker mobile connections and better signal coverage.
Cleaner energy, greener transport, and more affordable fuel bills for our homes and offices.
We want more trains and buses to connect the great cities of the north.
We want to build world class schools and hospitals.
We want to push the frontiers of science and technology and turbocharge our ambition on research and development.
We want to build and invest in every region and nation of this United Kingdom.
From the motor highway to the information highway…
…we’ll settle for nothing less than an infrastructure revolution.
We’ll bring forward detailed plans at Budget later this year alongside an ambitious strategy for this new investment.
We’ll set a high bar for funding projects, and they’ll have to show real value for money, with credible delivery plans and budgets…
…starting with the government’s rapid review of HS2.
We’ll target that investment at national priorities like regional growth and decarbonisation.
And let me take this opportunity to thank my HF the Member for Chelmsford for her tireless work as Chair of the All-Party Group on Infrastructure.
So yes – we’ll use the government’s resources to kickstart the infrastructure revolution.
But we’ll also do more to give private investors the confidence to back these projects, too.
We want all this to be underpinned by strong and independent institutions.
We set up the National Infrastructure Commission in 2015, and we’ll continue to rely on its expert advice…
…as we look carefully at other institutional reforms that might be needed.
So our infrastructure revolution will be strategic and carefully planned.
[political content redacted]
Today we lay the foundations of our new economic plan.
We’re turning the page on nearly a decade of necessary work to fix the public finances…
…and writing a new chapter in our public services.
Health and education aren’t just the names of departments.
They’re lifelines of opportunity, just as they were for me when I was growing up.
The teachers and lecturers who persuaded me to study economics in the first place.
The police officers who kept us safe when the street I grew up on became a centre for drug dealers.
The NHS that cared for my dad in his final days.
These aren’t just numbers on a spreadsheet.
They’re the beating heart of our country.
And we invest today to support them.
Before I turn the detail of today’s announcements…
…let me first thank the dedicated officials in the Treasury for all their hard work…
…delivering what I’m told is the fastest SR in history.
And let me particularly thank my RHF, the Member for Richmond, who takes the approach to spending you would expect from an adopted Yorkshireman.
He’s displayed his typical mix of energy, courtesy and rigour - let’s just say there’s no productivity problem in the Chief Secretary’s office.
Next year I will add £13.4 billion to the plans for total public spending, including £1.7 billion added to capital spending.
These extra funds take the real increase in day-to-day spending to £13.8 billion, or 4.1%.
That means I’m delivering the fastest increase in day to day spending for 15 years.
That funding allows us to start a new chapter for our public services and fund the people’s priorities.
Our decisions today have been guided by our ambition to build a safer Britain, a healthier Britain, a better educated Britain, and a more Global Britain.
My family grew up on a road in Bristol that a national newspaper described back then as “Britain’s most dangerous street”.
But to us, it was just home.
After we left, my brother became a policeman and has been in the force for over 25 years.
I’ve seen the impact the job has on the lives of those courageous enough to do it.
So today I pay tribute to the bravery, courage and dedication of our hardworking police officers.
As Home Secretary, I saw first-hand how the demands on our police forces are changing and increasing.
Yes – traditional crime is down by a third since 2010.
But the threats from terrorism have escalated and evolved.
The internet is changing how criminals operate and break the law.
And we’ve seen too many horrifying stabbings on Britain’s streets.
So with our frontline officers report feeling overstretched, it’s clear that it’s time to act.
Today I can announce a 6.3% real terms increase in Home Office spending.
The biggest increase in 15 years.
That means £750 million to fund the first year of our plan to recruit 20,000 new police officers.
With an extra £45 million this year so that recruitment can start immediately, getting the first 2,000 officers in place by the end of March.
And let me thank my HFs the Members for South West Bedfordshire, Wokingham, the Isle of Wight and Nuneaton for their championing of police resourcing.
The threats facing our police officers are evolving - so the way we resource them will evolve, too, in three areas.
First, Serious and Organised Crime is the most deadly national security threat faced by the UK, costing the nation at least £37 billion each year.
The scale and complexity of this threat means we need to do more to develop our response.
So I’m announcing today a formal review to identify the powers, capabilities, governance and funding needed, ahead of the full Spending Review next year.
Second, this year, sadly, has seen more attacks on Places of Worship, including mosques and synagogues.
That’s unacceptable in a diverse, open, tolerant society like ours.
So to protect our religious and minority communities, I’m announcing today that I will double the Places of Worship Fund next year.
And I thank my HFs the Member for Hendon and the Member for Finchley and Golders Green, for their tireless work campaigning against hate crime.
Finally, today I’m announcing £30 million of new funding to tackle the scourge of online child sexual exploitation.
A better resourced police force will deliver better outcomes for the British people.
And it will increase the demands on our already overstretched criminal justice system.
So today we invest more in our criminal justice system to manage that increasing demand…
…with a 5% real terms increase in the resource budget for the Ministry of Justice…
…an increase in their capital budget to £620 million next year…