The fiscal statement scheduled for next Monday could be delayed to give new Prime Minister Rishi Sunak more time to consider how to fix the UK’s public finances, a senior Cabinet minister said on Wednesday.
James Cleverly, who was re-appointed as Foreign Secretary by Mr Sunak on Tuesday, said the Prime Minister “will want some time with his Chancellor to make sure that the fiscal statement matches his priorities”.
The timing of the crucial fiscal event, which will be accompanied by a forecast by the Government’s independent fiscal watchdog, the Office for Budget Responsibility, was expected to be discussed at the first meeeting of Mr Sunak’s Cabinet on Wednesday morning.
While Mr Cleverly did not rule out the possibility of sticking to the date set by former PM Liz Truss, his failure to confirm it would go ahead as planned on Halloween suggests ministers are preparing to push it back.
He told BBC Breakfast: "Obviously the date of that fiscal statement was originally set with no expectation of a change of prime minister. We've now had a change of Prime Minister.
"Thankfully that's happened very quickly, because nobody wants uncertainty.
"But the Prime Minister was appointed less than 24 hours ago. He is in the process of forming a Government.
"Now, I don't know whether that means that date is going to slip but, as you suggested, the current date is only a couple of days away.
"The Prime Minister and the Chancellor know they need to work quickly on this but they also want to get it right, so we'll see what happens to that date."
When it was put to him that a delay would bring more uncertainty, Mr Cleverly said that “a short delay, in order to make sure that we get this right, I think that is not necessarily a bad thing at all".
Mr Sunak took office on Tuesday morning warning the UK faced a “profound economic crisis”.
He reappointed Jeremy Hunt as Chancellor after he was brought in by Ms Truss to calm financial markets which were badly rattled by former Chancellor Kwasi Kwarteng’s disastrous tax-slashing mini budget on September 23.
Mr Hunt has already reversed £32bn of £45bn of tax cuts announced then and cut short the Government’s two year universal energy support package for all households, instead annoucning a review which could see a more targeted scheme introduced next April.
But the Chancellor is under pressure to set out how he will plug an estimated £30bn-£40bn black hole in the public finances and start reducing national debt as a proportion of GDP over the next five years.
Government departments have been braced for swinging cuts to spending while there are reports that Mr Hunt could be weighing more windfall taxes on energy companies and banks.
The case for a windfall tax on banks may have been strengthened on Wednesday after Barclays reported pre-tax profits of £1.97bn in the three months to the end of September - a 6 per cent increase partly driven by rising interest rates.
But financial markets have calmed since Mr Hunt’s appointment on 14 October: UK gilt yields have fallen to levels not seen since before the mini-budget while the pound has also recovered against the US dollar.
Economic commentators argue the need to announce the Government’s medium term fiscal plan before the Bank of England’s next interest rate setting meeting on November 3 may have receded.
