Chancellor Sajid Javid declares end of austerity

The government has declared it has “turned the page on austerity” as it set out plans to raise spending across all departments.

Chancellor Sajid Javid outlined £13.8bn of investment on areas including health and education in what he said is the fastest increase for 15 years.

The plans cover one year and come amid intense political turmoil over Brexit.

Labour said the government was “pretending to end austerity when they do nothing of the sort”.

Mr Javid said: “No department will be cut next year. Every single department has had its budget for day to day spending increased at least in line with inflation.

“That’s what I mean by the end of austerity.”

But the shadow chancellor, John McDonnell, accused Mr Javid of “meaningless platitudes”.

“Do not insult the intelligence of the British people,” he said, calling the spending round “grubby electioneering”.

The chancellor laid out the spending plans against the possibility that the UK is heading for another general election – the country’s third in five years.

Prime Minister Boris Johnson said Britain will go to the polls if he is forced to request an extension to the 31 October deadline for the UK to leave the European Union.

The chancellor’s spending plan is based on forecasts published back in March by the Office for Budget Responsibility (OBR), the independent fiscal watchdog.

Under those predictions, the government had around £15bn to borrow within its self-imposed overdraft limit of 2% of the value of the national economy.

Since then, the UK’s gross domestic product (GDP) shrank by 0.2% during the second quarter.

If it contracts again between July and September, the country will officially be in recession, which is defined as two consecutive quarters of negative growth.

On Wednesday, data measuring activity in the UK’s dominant services sector, which accounts for nearly three quarters of GDP, showed that growth slowed in August and follows poor figures from both manufacturing and construction during the same month.

If the UK falls into recession, it would mean that the government would break its fiscal rules.