Rishi Sunak will spend billions of pounds levelling up post-Brexit Britain, including more than £1 billion to strengthen the UK border.
The Chancellor will next week announce a major funding bonanza to insulate the UK from the double economic shock of coronavirus and the Brexit transition period coming to an end on December 31.
Despite the spiralling cost of the pandemic, the self-styled "Northern Chancellor" will commit tens of billions of pounds to major infrastructure projects to finally remedy the North-South divide. Swathes of the civil service will be relocated to the Midlands and North, while the rules for Treasury investment will be overhauled to ensure that they are no longer biased towards the South-East and London.
Mr Sunak will also set aside £2 billion for Brexit as part of his Comprehensive Spending Review (CSR) on Wednesday, including a major upgrade of the customs system and £360 million to recruit more than 1,100 new border guards. Up to £572 million will be spent helping farmers to navigate environmental law and standards after Britain breaks from Brussels.
Setting out his first national infrastructure structure strategy next week, the Chancellor will also lay down a "massive downpayment" on the £600 billion of investment promised by Boris Johnson to "level up" the country.
The huge funding commitment will fire the starting gun on a string of major projects including fibre broadband, flood defences and road and rail schemes.
Boris Johnson has pledged to level up the country
Credit: Vickie Flores/ Shutterstock
Speaking exclusively to The Telegraph, Mr Sunak said: "Obviously, as the Prime Minister has said we would prefer a deal with the European Union and that is what we are working hard to achieve. But any deal must respect our status as a newly independent country.
"We have a bright future before us – there will be lots of opportunities for us to capitalise on, and I have every confidence that, whatever happens in these final stages of the negotiations, Britain will flourish.
"Leaving the EU provides us with many opportunities, and I am committed to ensuring that departments are well-equipped to provide the support that British business and people need to prosper. From free ports to free trade, the future is bright for post-Brexit Britain."
The move comes as the European Commission told ambassadors for EU governments that a deal was "close" on Friday, despite trade negotiations being thrown into disarray after a member of Michel Barnier’s team tested positive for coronavirus.
Ursula von der Leyen, the president of the commission, said at a press conference that there had been "more movement on important files", telling diplomats that the deal was "95 per cent" done although there was no final breakthrough on the three major obstacles of fishing, the "level playing field" guarantees and the deal’s enforcement.
Mr Sunak’s Brexit funding pledges are designed to send a clear message to Brussels that the UK is financially prepared to leave without a deal.
The 40-year-old, who voted for Brexit, is expected to tell the Commons that the Government will "make the most of its freedom to trade with the rest of the world on its own terms" after signing or agreeing in principle trade agreements with 52 countries including Japan, worth a total of £146 billion in 2019 alone.
It is hoped ongoing trade negotiations with the United States, Australia and New Zealand will enable 80 per cent of trade to be covered by free trade agreements by the end of 2022.
The foreign aid budget is expected to be cut from 0.7 to 0.5 per cent of gross national income as the Chancellor announces the settlement for the newly formed Foreign Commonwealth and Development Office, bringing together development and diplomacy in one department.