CHANCELLOR Jeremy Hunt has delayed the Autumn Statement until next month following the appointment of Rishi Sunak as Prime Minister.
Following Sunak’s Cabinet reshuffle which lasted late into Tuesday evening, Hunt and the new PM announced on Wednesday morning that the Budget statement due to be made in the House of Commons on October 31 will be postponed.
The medium-term fiscal plan will now be published on November 17 alongside a new set of economic forecasts from the Office for Budget Responsibility (OBR).
When former chancellor Kwasi Kwarteng delivered his disastrous mini-Budget in September, the UK Government did not approach the OBR for the accompanying forecasts.
The chaos that followed saw the pound crash to a record low against the dollar, mortgage rates spiking to 6%, and an unprecedented intervention from the Bank of England (BoE) to stop pension pots collapsing.
Hunt informed ministers of the decision at the first meeting of Sunak’s new Cabinet in Downing Street on Wednesday morning.
Acting Finance Secretary John Swinney described the delay as "unwelcome and unnecessary", and criticised the impact on the Scottish Government's budget planning.
Following the meeting, Hunt told broadcasters: “I want to confirm that it will demonstrate debt falling over the medium term which is really important for people to understand.
“But it’s also extremely important that that statement is based on the most accurate possible economic forecasts and forecasts of public finances.
“And for that reason the Prime Minister and I have decided it is prudent to make that statement on November 17 when it will be upgraded to a full autumn statement.”
Hunt said he discussed the move with Bank chief Andrew Bailey on Tuesday night, adding the governor “understands the reasons for doing that and I’ll continue to work very closely with him”.
He said it is essential to ensure the “very, very difficult decisions” that would be required on tax and spending “stand the test of time”.
“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,” he said.
“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 their mortgages, over their jobs, over the cost-of-living concerns that everyone has.
“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.
Prime Minister @RishiSunak & Chancellor @Jeremy_Hunt have agreed the Autumn Statement will be delivered on 17 November with an @OBR_UK forecast. It will contain the UK’s medium term fiscal plan to put public spending on a sustainable footing, get debt falling & restore stability. pic.twitter.com/3wiSAU1iaK
— HM Treasury (@hmtreasury) October 26, 2022
“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.”
Reacting to the announcement, Deputy First Minister Swinney said: “This is an unwelcome and unnecessary delay by the UK Government which simply creates more economic uncertainty at a time when households, businesses and the wider economy all need as much certainty and stability as possible.
“It risks impacting on the timing of the Scottish Government’s own budget plans as we will now need to wait two and a half weeks longer than previously proposed to see what the effect of UK tax and spending plans will be on devolved budgets.
“Above all, it is essential that the Chancellor heeds warnings not to impose renewed austerity, which would only worsen the extreme pressures already being faced by people and businesses as a result of inflation, rising interest rates and other economic factors.
“The Scottish Parliament will be kept informed regarding the timing of the Emergency Budget Review statement and will be consulted on any potential impact the UK Government’s delay will have on the timing of the 2023-24 Scottish Budget.”
Announcing the delay on social media, the Treasury tweeted that the fiscal plan will “contain the UK’s medium term fiscal plan to put public spending on a sustainable footing, get debt falling & restore stability”.
