[London, 4th Reuters]-British Treasury Minister David announced in a parliamentary speech on the 4th that the austerity era has ended, and announced the largest spending expansion plan in the past 15 years. However, the opposition and labor parties criticize it as a response aimed at the general election that Prime Minister Johnson is aiming to overcome the European Union (EU) withdrawal problem.
Mr. Javid stressed in a parliament, "After 10 years of recovery from the Labor Party recession, the era of austerity has ended and a new decade of regeneration is about to begin." It announced that it would increase its current expenditure after adjusting for inflation in 2020/21 by 4.1%.
He said he would increase spending in areas of high priority for the public, such as education, medical care and security, and stressed that no government sector budgets would be cut next year.
The shadow minister of the Labor Party, Congressman John MacDonnell, strongly criticized, "It is ironic that trying to deceive the" priority area for the people "."
Mr. Javid showed his policy of complying with the previous government's fiscal discipline regarding the expenditure plan for 20/21. However, while interest rates remained at a record low, they added implications for future borrowing expansion.
The UK budget deficit, which reached about 10% of gross domestic product (GDP) in 2010, has shrunk to just over 1%, and there is room for government borrowing.
However, analysts have pointed out that if the UK spending is greatly expanded, confidence in the UK finance will be shaken amid growing concerns about the recession of the UK economy and the prospects for leaving the EU.
Thinktank's Resolution Foundation says Mr. Javid is boldly doing the austerity of the austerity era, but taking into account the economic downturn and the recent increase in public debt, borrowing is less than 2% of GDP He pointed out that there is a possibility that the fiscal rule of keeping it down to 20/21 may not be observed.
Mr. Javid expressed his intention to revise his fiscal regulations before announcing a medium- to long-term revenue and expenditure plan later this year.