Rishi Sunak ‘could delay the Budget until January’ amid fears a second wave of coronavirus this autumn could cause more havoc to the economy
- The Chancellor has yet to set a firm date for the fiscal showpiece
- Told MPs economic forecast used for it would not come before mid-November
- A December Budget would not leave time to pass laws before Christmas break
Rishi Sunak is considering postponing the autumn Budget until early next year amid fears over the potential economic impact of a second wave of coronavirus sweeping the country.
The Chancellor has yet to set a firm date for the fiscal showpiece but it will not be before mid-November at the earliest and could be pushed back into 2021.
Mr Sunak told MPs on Friday that he has asked the Office for Budget Responsibility (OBR) to prepare an economic forecast to be published in ‘mid to late November’.
A Budget cannot come without the report, and it is understood that the Chancellor is yet to decide whether to deliver a fiscal event alongside its publication.
If he decides against it, there would be little time to publish legislation before the Christmas break if he held it in December, meaning a January event would be more likely, sources told the Telegraph.
The next few months could be crucial to setting out the scale of economic damage told to UK plc by Covid-19.
The furlough scheme that has propped up millions of jobs since the spring is due to end in October, raising fears of a surge in unemployment.
At the same time, a second wave of cases that is feared could force further lockdowns in various parts of the country, which would set back the recovery further,
It came as Labour leader Sir Keir Starmer warned against an increase in taxes to cover the cost of fighting the pandemic.
The Chancellor has yet to set a firm date for the fiscal showpiece but it will not be before mid-November at the earliest and could be pushed back into 2021
It came as Labour leader Sir Keir Starmer warned against an increase in taxes to cover the cost of fighting the pandemic
He told radio station LBC it would be the ‘wrong thing to do, adding: ‘We’re not calling for raises in tax, particularly at the moment when we absolutely need to reopen our economy’.
Chancellor Rishi Sunak has indicated that his Autumn Budget will not come before mid-November, amid economic uncertainty from the coronavirus pandemic.
The chief executive of the Resolution Foundation think tank, Torsten Bell, said: ‘This autumn’s unprecedented economic uncertainty has led the Chancellor to consider delaying his planned Budget.
‘The temptation to delay is understandable given that uncertainty. But whether or not a Budget happens this autumn, major policy decisions are needed sooner rather than later.
‘With a sharp rise in unemployment a real danger, and both the job retention scheme and key credit support to business set to expire around the end of October, the Chancellor will soon need to set out a fresh plan for the next phase of the crisis, Budget or no Budget.’
Boris Johnson (pictured today in Downing Street) faces an uncertain autumn amid signs of a second wave of coronavirus
A senior economist at the IPPR think-tank, Carsten Jung, called on Mr Sunak to extend support for businesses and workers in order to prevent an economic ‘cliff edge’.
‘October is a make-or-break moment for the UK economy. With the end of the furlough scheme and of eviction bans, joblessness and homelessness could rise dramatically.
‘It makes sense that the Chancellor would want to delay the budget until November to wait and see the fallout from this first,’ he said.
‘But much better would be to prevent the cliff edge in the first place. The more certainty Sunak can provide to workers and businesses the more stable the outlook will be.
‘Continuing support schemes into the new year can provide certainty, maintain incomes and help the economy rebound quickly. An explosion in economic dislocation this autumn would help no-one.’
Mr Sunak made the announcement in a Written Ministerial Statement to the Commons.
‘Today I can inform the House that I have asked the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast to be published in mid to late November,’ it read.