LONDON (Reuters) - British finance minister Sajid Javid promised to use public investment to help the voters who gave Prime Minister Boris Johnson a thumping election win last month, heralding a shift in capital spending towards underperforming regions of the country.
Javid will deliver Britain’s first post-Brexit budget plan on March 11 which would “level up and spread opportunity”, the finance ministry said.
During the election campaign Javid said he would raise investment spending to almost twice its historic average, to show voters that a decade of tight budget controls was ending.
“People across the country have told us that they want change. We’ve listened and will now deliver,” he said in the statement that announced the date of the budget.
In the hours after his emphatic election win on Dec. 12, Johnson said he would not let down voters who switched to his Conservative Party in traditionally Labour-supporting areas of northern and central England.
Britain has long struggled to reduce stark contrasts between London and many other regions of the country that lag far behind in terms of productivity, earnings and even life expectancy.
Some economists say the imbalance stems from higher infrastructure investment in London and southeast England, which they say gives the capital a self-reinforcing advantage.
“There is strong justification for tilting future public investment to other parts of the UK as part of a strategic view about the geography of economic development,” Diane Coyle of the University of Cambridge and Marianne Sensier of the University of Manchester wrote in a 2019 paper.
Javid plans to use low borrowing costs to boost investment, helping the Conservatives meet election promises of up to 20 billion pounds ($26 billion) a year in extra investment in road, rail and other infrastructure.
The budget would also prioritise the environment, the finance ministry said.
Britain has some room for manoeuvre on spending having slashed the budget deficit from 10% of gross domestic product in 2010 to about 2% now.
But Javid announced in September the biggest increase in day-to-day spending in 15 years with a focus on hospitals, police and vocational training, and he has committed not to borrow over the long term to fund so-called current spending.
With spending on services likely to remain tight in coming years, Johnson told his ministers on Tuesday to scrutinise their departmental spending.
“It was a very clear message that all cabinet ministers will need to root out waste and ensure that spending is fully focused on the government’s priorities,” Johnson’s spokesman said.
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Additional reporting by David Milliken and Kylie MacLellan
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