Chancellor and Prime Minister to thrash out details of Budget as March deadline stays
The new chancellor Rishi Sunak will meet Prime Minister Boris Johnson in Westminster tomorrow, as the pair thrash out the details of next month’s Budget.
Sunak, who was parachuted into the role on Thursday after Sajid Javid’s surprise resignation, confirmed this morning that the Budget will be going ahead on 11 March, despite the shake-up the Treasury.
Sterling rose after Sunak’s announcement, up 0.2 per cent against the dollar to $1.3034. It made similar gains against the euro to trade at €1.2045.
Officials told Morning Wire that Sunak will not attend this weekend’s G20 summit of finance ministers in order to focus on the fiscal event, which will be the first since Johnson took the reins last summer. Instead, his first appearance on the world stage as chancellor will be the IMF in April.
The Budget is widely expected to herald the end of austerity with the loosening of fiscal rules, however economists have warned that unless he hikes taxes or makes cuts elsewhere, he could end up failing to balance the current budget by 2023.
The fact that the Treasury is pressing ahead with the Budget on the date planned is being widely interpreted as meaning there will be little change to its overall shape.
However the touted mansion tax is thought to have been disbanded even before Javid’s resignation, after sparking fury among backbench Tories.
A planned revaluation of homes, resulting in higher council tax bills for potentially millions of families, is thought to have been parked for the same reason.
Javid’s proposed cuts to pension tax relief – equally unpopular to heartland voters – may also be ditched before the big day. Meanwhile, the business community continues to lobby Sunak to suspend the roll-out of IR35, the new tax regulations for the self-employed.
Sunak is also reportedly mulling a u-turn on the controversial overhaul of air passenger duty, which was agreed as part of a rescue deal for Flybe.