Chancellor Sajid Javid is set to spark fresh speculation of an autumn snap election by unveiling a cash injection for public services next week.
The one-year spending review announcement for all Whitehall departments fro 2020/21 will be made on Wednesday September 4, the day after MPs return from their Commons summer break.
Tory MPs are hoping the fast-tracked spending decisions will send voters a feel-good, ‘post-austerity’ message ahead of Boris Johnson’s planned exit from the EU on October 31.
Writing in the Daily Telegraph, Javid said the spending round would let the government ‘clear the decks’ for Brexit.
“Thanks to the hard work of the British people over the last decade, we can afford to spend more on the people’s priorities - without breaking the rules around what the government should spend - and we’ll do that in a few key areas like schools, hospitals and police.”
Rumours of an election intensified after the Treasury suddenly cancelled a speech by Javid planned for Wednesday, revealing that he would instead make his main points in a spending announcement to parliament in “early September”.
The decision to hold a major financial statement next week is sure to be seen by critics as an attempt to further pile pressure onto Tory MPs thinking of blocking a no-deal Brexit.
It may also be interpreted as a distraction tactic, coming just as MPs attempt to seize control of the Commons’ business to pass emergency legislation forcing Johnson to avoid leaving the EU without an agreement on Halloween.
The former chancellor Philip Hammond warned Johnson and fellow Tory leadership rival earlier this summer that the £26bn ‘headroom’ he had built up to ease the public finances depended on the UK getting a deal with Brussels.
However some of that extra borrowing may well be used by the new government to push cash at areas that could help win an election. Javid could also tweak the fiscal rules to give himself more room to spend.
Normally, spending reviews cover three years rather than one but the Johnson government is keen to send a message that it has new money after nearly a decade of Tory austerity.
Tom Brake, Liberal Democrat Shadow Brexit Secretary, told HuffPost UK that the decision to accelerate the one-year spending review would not fool the public.
“The Conservative government is clearly in a state of panic and disarray over the spending review but one thing is clear: they cannot hide the abysmal state of the UK economy thanks to Brexit and we haven’t even left the EU.
“This is nothing more than a desperate attempt to butter up the British public in advance of a snap general election before the Tories unleash the devastating consequences of a no-deal Brexit which will demolish job security as well as our food, fuel and medicine supply.
“We must put a stop to this mess by ruling out no deal and giving the public a say on Brexit through a people’s vote.”
A full multi-year spending review will now take place next year in 2020.
The chancellor’s speech, which had been due to take place in Birmingham, had been billed as his “outlining his vision for the UK economy”.
But in a surprise move on Tuesday, the Treasury press office said the speech was being rescheduled.
“The forthcoming spending round will instead be brought forward in early September and will cover the themes and priorities he was due to outline,” it said in an email to attendees of the speech.
Shadow Chancellor John McDonnell said: “Nobody is fooled into believing that this is a proper and normal Spending Review. It’s a one off pre-election panic driven stunt budget.
“As each spending announcement is dribbled out it is exposed as inadequate and whole areas of spending needs like local councils and addressing child poverty are ignored. This is not serious government.”