London: British Prime Minister Rishi Sunak on Wednesday postponed an eagerly awaited budget plan due next week, as the youthful new leader got down to business after weeks of political turmoil.
Following a meeting of his new cabinet, Sunak was set to engage in his first parliamentary joust against opposition Labour leader Keir Starmer, who is demanding a snap general election.
“The Tories have crashed the economy, with low wages, high prices and a cost-of-living crisis,” Starmer said, in a taste of the attack to come during the Prime Minister’s Questions.
“The public needs a fresh start and a say on Britain’s future.”
But Sunak, 42, ruled out an early election as he vowed stability and fiscal rectitude following his appointment by King Charles III on Tuesday to succeed Liz Truss after she served just 49 days in Downing Street.
After appointing the cabinet team, Sunak phoned the presidents of Ukraine and the United States to vow continuity on UK foreign policy, including resisting Russia’s attack of its neighbour with cash and military aid.
But Chancellor of the Exchequer Jeremy Hunt - retained in Sunak’s cabinet along with other senior ministers - said that Monday’s planned “medium-term fiscal statement” was no longer so pressing.
Instead, there will be a full budget statement on November 17 to lay out the new government’s tax and spending plans, Hunt told reporters.
“Now, we have a new prime minister and the prospect of much longer-term stability for the economy,” he said, stressing the new plan would be accompanied by fresh economic forecasts from the Office for Budget Responsibility (OBR).
Promise to restore trust
Hunt said he had discussed the delay with Bank of England governor Andrew Bailey - who had been blindsided by Truss’s previous ill-conceived plan for tax cuts financed by extra borrowing, which sent markets into a tailspin.
The delay would ensure the budget can “stand the test of time” to give British mortgage holders and businesses more assurance, Hunt said, after the Truss plan provoked a damaging spike in borrowing costs and torpedoed her premiership.
Markets were unperturbed by the postponement, suggesting Hunt and Sunak have successfully calmed investor nerves.
Sunak vowed to restore “trust” and “integrity” in government after Truss’s financial carnage and the many controversies that brought down Boris Johnson before her.
But for critics, the new leader undermined his own pledges by also re-appointing the hardline right-winger Suella Braverman as interior minister, days after she was forced to resign for a security breach.
Foreign Secretary James Cleverly - also retained by Sunak - said Braverman had shown contrition for her “mistake” in emailing classified government documents outside her department.
The documents reportedly included market-sensitive information from the OBR.
Hunt declined to confirm this, while Cleverly denied allegations that Sunak reappointed Braverman after a secret deal securing her support against Johnson’s audacious comeback bid.
As well as mending Britain’s wounded finances, Sunak is also pledging to reunite the Conservatives after another bruising leadership contest, mere weeks after Johnson was forced out.
The right-leaning Times daily welcomed a “generally broad and capable set of cabinet appointments”, although the left-wing Guardian expressed scepticism.
“Sooner or later, he will face the parliamentary disunity that his election sought to banish,” it said in an editorial.
Sunak, finance minister under Johnson, also kept Truss’s defence, trade and culture ministers among others, as well as re-hiring some older faces from the Johnson cabinet.
The line-up “reflects a unified party and a cabinet with significant experience, ensuring that at this uncertain time there is continuity at the heart of government”, a Downing Street source said.
But Braverman’s return raised eyebrows across the political spectrum, with Labour demanding answers on the implications for national security.
Cabinet secretary Simon Case, the UK’s most senior civil servant, was “livid” over her swift return, a source told The Times.
Truss left office as the UK’s shortest-serving premier in history, replaced by its youngest since 1812 and first Hindu leader.
Sunak triumphed in a 96-hour Tory leadership contest after rival contender Penny Mordaunt failed to secure enough nominations from Tory lawmakers and Johnson dramatically aborted his own bid.