Boris Johnson’s government will end ten years of Conservative austerity on Wednesday (10 March) when it is expected to lay out plans to increase infrastructure spending to its highest level in decades.
Chancellor Rishi Sunak’s first post-Brexit budget is set to promise £600 billion (€700 billion) of capital spending over the next five years, ploughing money into a raft of new road and rail projects including the controversial, and expensive, HS2 rail network.
Johnson’s government has prioritised infrastructure projects outside London, in England’s northern cities and the Midlands, where his Conservative party made substantial gains at last December’s election.
However, with the government highly unlikely to increase basic tax rates, and the UK economy only forecast to grow by around 1% in 2020, such a spending spree is likely to be based on new borrowing. The opposition Labour party pointed out that it had been accused during the election campaign of planning to use ‘the magic money tree’ to increase investment – the same strategy of debt-fuelled growth that Johnson is now set to pursue. (Benjamin Fox | EURACTIV.com)