The end of fiscal restraint raises concern about a crisis of confidence from foreign investors
Chancellor of the exchequer Sajid Javid casts the election as a choice between responsible investment under the Conservatives and ‘fantasy economics’ of the oppositionBritain's Chancellor of the Exchequer Sajid Javid arrives at the Conservative Party headquarters in London, the UK, November 4 2019. Picture: BEN STANSALL / AFP
That commitment was immediately dwarfed by shadow chancellor John McDonnell, who promised an additional £55bn a year in the first term of a Labour government — more than double the current plan in Corbyn’s party. The Resolution Foundation, a UK research institute, says Britain is heading for 1970s levels of government spending, whoever wins the election, with Labour looking more profligate than the Tories.
His new rules commit the government to balancing the day-to-day budget in three years and limiting net investment to 3% of gross domestic product. Debt, he promised, would be lower at the end of the next parliament than it was at the start.
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