Chancellor Rishi Sunak fuels expectations of Budget spending splurge

Rishi Sunak has fuelled expectations of a spending splurge in Wednesday’s budget by refusing to rule out ditching fiscal constraints inherited from former chancellor Sajid Javid.

As chancellor, Mr Javid committed the government to balancing current spending over a three-year period, effectively putting a strict cap on expenditure on the day-to-day operations of the state.

Challenged repeatedly on Sunday over whether he would retain this rule - along with two others requiring debt to be lower at the end of the parliament and preventing the government from borrowing to fund day-to-day spending - Mr Sunak declined to confirm that he would.

The chancellor insisted that his policies would be guided by the principle of “fiscal responsibility”.

But his reluctance to sign up to a promise made just a few months ago in the Conservative manifesto for the December election will spark speculation that he is preparing to give himself more leeway to turn on the spending taps at a time when Boris Johnson is pursuing ambitious plans for investment and the country is facing a potentially expensive coronavirus outbreak.

However, a poll for The Independent suggested that a relaxation of fiscal discipline may run counter to voters’ preferences.

Asked whether the chancellor should borrow more money to increase spending on public services and infrastructure or prioritise cutting the national debt, 31 per cent said he should pay off the debt against just 20 per cent who backed more borrowing.

Some 26 per cent of those questioned by pollsters BMG said borrowing and investment should remain at existing levels.

Conservative voters were strongly opposed to more borrowing, which was backed by just 14 per cent of those who backed Mr Johnson’s party in December, against 32 per cent who said the chancellor should prioritise debt reduction.

In a pre-budget interview on BBC1’s Andrew Marr Show, Mr Sunak was asked whether he would stick with the fiscal rules set out in the Conservative manifesto.

He replied: “Well, I can't comment on the budget, but I would say that I believe very much in the importance of fiscal responsibility, of responsible management of our public finances.

“It's because there's been very strong management of public finances over the last 10 years by successive Conservative chancellors, who have made some difficult decisions, that means I can sit here today and say I will invest what it what it takes to get through this, because our public finances are in a good spot.”

Asked specifically whether overall government debt would be lower at the time of the next election in 2024, as Mr Javid promised, Mr Sunak replied: “I can't comment on the exact forecast until Wednesday.”

And challenged over whether he could guarantee not to borrow to fund day-to-day spending, he said: ”You're asking me again about the details, which I can't give you.”

On the question of whether he remained committed to balancing the current budget over three years, he replied: “You're asking me about the detail of what the budget contains which I can't give you until Wednesday,”

Marr told him: “All I'm asking you is whether you're going to stick by the clear three fiscal rules on which your government was elected only a few weeks ago, and if you can't say yes, people will assume the answer is no.”

Mr Sunak replied: “Well, we have a budget on Wednesday. I could be asked many many questions about every single line item in the budget and I couldn't confirm or deny any single one of them.

“I’ve given you a very strong commitment, of course I will be fiscally responsible.”

He said the budget would deliver on the promises made by Tories in the recent election campaign about “laying the foundations for future growth and prosperity and making sure that we level up across the country, we spread opportunity”.

Elsewhere, the Treasury said Mr Sunak is set to double funding for flood defences to £5.2 billion in the Budget.

The chancellor is also expected to announce on Wednesday:

– A £643 million package of investment to help rough sleepers off the streets and support them get their lives back on track.

– Up to £100 million more per year towards the fight against ‘dirty money’, with a new levy on firms regulated for anti-money laundering.

– Millions more for state-of-the-art football pitches in hard-hit communities.

– A new neonatal pay and leave entitlement for parents of sick newborn babies.

– A review of the ‘Green Book’ manual used by ministers to allocate investment and make investment decisions across the country.

- BMG questioned 1,498 British adults between 3 and 6 March.