MANCHESTER, England (Reuters) - Chancellor of the Exchequer Sajid Javid said a new Conservative government would spend up to £20 billion more each year on road, rail and other infrastructure projects, and there would be room for tax cuts too.
If Boris Johnson is re-elected as prime minister on Dec. 12, Javid said the government would set itself new fiscal rules allowing it to spend up to 3% of annual economic output on infrastructure, higher than a historical average of around 1.8%.
In a speech in which he painted his plans as “responsible” in contrast to the bigger spending promises of the opposition Labour Party, he said debt as a share of economic output would be lower at the end of the next parliament than at the start.
Javid said low borrowing costs for the government meant it was a responsible time for the government to invest but he would run a balanced budget for day-to-day spending.
If debt servicing costs rose sharply, the government would reassess its spending plans, he said.
Javid also said there would be room for tax cuts if the government stuck to its new fiscal rules.
“If we stick to these rules that I’ve set out today...we can afford some tax cuts,” Javid told an audience in Manchester.
Reporting by Kylie MacLellan and William Schomberg; editing by Kate Holton