The Halloween “budget” has been delayed for nearly three weeks to ensure Rishi Sunak’s new government can “reach the right decisions”.
The first meeting of the new cabinet was told the crucial “fiscal plan” – which is poised to set the UK back on a path to austerity with huge spending cuts – has been put back to 17 November.
Jeremy Hunt, retained as chancellor, has warned of “eye-watering” decisions to balance the books, a task made harder by the market crash that followed the disastrous mini-budget.
In an interview, he said the delay would ensure the Treasury watchdog, the Office for Budget Responsibility (OBR), would be able to make “the most accurate” forecasts possible.
The statement has also been upgraded to a full Autumn Statement – to underline how crucial departmental budgets are will be decided, with cuts inevitable.
Mr Hunt said: “Now we have a new prime minister and the prospect of much longer-term stability for the economy and the country.
“In that context, a short two-and-a-half week delay is the best way we will make sure that it is the right decisions we take.”
The chancellor added: “The OBR also want to make sure that their forecasts are the most accurate possible and there have been a lot of changes even in the last 48 hours.
“And this is my recommendation to the prime minister, as the best way to ensure that the decisions that we take – these very, very difficult decisions – are ones that stand the test of time and give us the best chance of giving people security over the mortgages, over their jobs, over the cost-of-living concerns that everyone has.”
No 10 and the Treasury believe they can hold back key decisions – to plug an estimated £30bn “black hole” in the nation’s finances – after the chaos of the Truss government was brought to an end.
Mr Hunt had already made the most crucial decisions by ripping up most of the tax-slashing mini-budget that had triggered alarm about soaring borrowing costs and debt.
The financial markets are calmer since the chancellor – and now the new prime minister – have come in, with the interest demanded on government gilts falling.
The delay to 17 November also gives the chancellor and Mr Sunak more time to set out the growth plan needed to satisfy the OBR that that debt can be brought under control.
That plan is threatened by the controversial reappointment of Suella Braverman – a fierce opponent of looser immigration rules – to the Home Office.
Mr Hunt added that he is willing to make “politically embarrassing” choices, following the dramatic U-turns that followed the sacking of his predecessor, Kwais Kwarteng.
“I’ve demonstrated in the short time that I’ve been chancellor that I’m willing to take decisions very quickly – and I’m willing to make choices that are politically embarrassing if they’re the right thing to do for the country, if they’re in the national interest.”
But Sarah Olney, the Liberal Democrat Treasury spokesperson, said:“This delay risks leaving mortgage borrowers, pensioners and struggling families under a damaging cloud of uncertainty.
“Rishi Sunak must confirm now that benefits and pensions will be up-rated in line with inflation, and there will be no cuts to our NHS and other crucial public services.”
