Chancellor vows to tackle cost of living as UK budget date announced

Tom Belger
·Finance and policy reporter
The Treasury released images of chancellor Sajid Javid at a construction site for the Trafford Park tram line project in Greater Manchester as the UK budget date for 2019 was announced. Photo: HM Treasury
The Treasury released images of chancellor Sajid Javid at a construction site for the Trafford Park tram line project in Greater Manchester as the UK budget date for 2019 was announced. Photo: HM Treasury

The chancellor Sajid Javid has announced the date of next UK budget, with a pledge to tackle the cost of living and tear up strict budget rules to hike borrowing for infrastructure spending.

The 2020 budget will take place on 11 March after a planned budget last November was cancelled in the run-up to the election, HM Treasury confirmed in a press release on Tuesday.

Business leaders said it was the new administration’s “first opportunity” to show it understood firms’ concerns amid continued political uncertainty over Brexit.

Javid said the British public had “told us they want change,” in a signal of the government’s changing priorities since the Conservatives’ landslide election victory last month.

Prime minister Boris Johnson’s new administration is reported to be focused on holding onto new supporters in traditionally Labour-voting areas in the Midlands and the north.

The Treasury released photos of the chancellor visiting a construction site in north-west England to accompany the announcement.

READ MORE: Johnson vows to raise minimum wage four times faster than inflation

Officials said Javid would use the budget to:

  • Fulfil government pledges on tax to “help tackle the cost of living for hard-working people.”

  • “Level up” across the country through “billions” in investment, rewriting previous administration’s spending rules and taking advantage of low interest rates to increase borrowing.

  • “Build on” recent announcements to boost spending on public services and tackle the cost of living, including hospital investment, vocational training and a significant hike in the minimum wage.

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The Treasury added that the budget would “prioritise” the environment, though gave no further details and faced criticism from Labour for failing to do more.

“People across the country have told us that they want change. We’ve listened and will now deliver,” said Javid.

“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.”

Last September the chancellor promised the fastest increase in government spending in 15 years, with commitments on the NHS and policing.

It marked a striking departure from previous Conservative administrations’ attempts to drive down the deficit and public debt, which sparked a decade of unprecedented cuts to public services.

READ MORE: UK chancellor unveils spending spree at fastest rate in 15 years

Labour shadow chancellor John McDonnell said: “After a decade of wrecking the economy, we can have no confidence in a Tory government delivering the scale of investment needed for renewal especially with a no-deal Brexit still on the table.”

He also claimed the budget would not focus on tackling climate change, and said it wouid be a “budget of climate change recklessness not renewal.”

“The government has learnt nothing from the fires in Australia and the floods in Indonesia,” said McDonnell.

A lobby group for UK business leaders also highlighted how the previous budget had been delayed “just at a time when the business environment needed a shot in the arm.”

Prime Minister Boris Johnson processes through the Central Lobby from the Lords chamber back to the House of Commons after members of parliament were summoned to listen to the Queen's Speech during the State Opening of Parliament by Queen Elizabeth II, in the House of Lords at the Palace of Westminster in London.
Prime Minister Boris Johnson is under pressure to deliver in his budget. Photo: PA

Tej Parikh, chief economist at the Institute of Directors, told Yahoo Finance UK members were “eagerly awaiting” detail on plans to boost infrastructure, skills and regional growth.

But Parikh said investment plans would take time to make a material difference to firms.

“Firms need a boost in the here and now to push spending decisions over the line, so the budget should include additional efforts to cut costs and red tape, and incentivise business investment via reliefs,” he added.

The budget announcement means anyone from voters to interest groups to firms can now suggest policy ideas or opinions on planned measures ahead of the March date via the government website.

Claire Walker, co-executive director of the British Chambers of Commerce, said firms wanted measures to “boost confidence and stimulate growth” amid continued uncertainty for the UK economy.

She also urged the chancellor to “make good” on Conservative promises of fundamental reform of business rates and called for a five-year moratorium on new upfront costs for firms.

“Firms of all sizes need to see a package of fiscal measures to alleviate the burden of high up-front costs and boost investment. This is the first opportunity for the new government to demonstrate that it listens to business and is serious about tackling the day-to-day challenges holding firms back,” said Walker.