Economy

New UK chancellor to deliver first budget just four weeks into job

Rishi Sunak’s sudden appointment led to speculation of a delay after Johnson cull

Rishi Sunak took up the top job at the treasury on Thursday after his predecessor, Sajid Javid, dramatically quit. Photograph: Andy Rain/EPA

Tue Feb 18 2020 - 10:59

UK chancellor of the exchequer Rishi Sunak said he was preparing to deliver the UK budget as planned on March 11th, an announcement that ends days of speculation that his sudden appointment to the post last week would force a delay.

“Cracking on with preparations for my first budget on March 11,” Sunak wrote on Twitter. “It will deliver on the promises we made to the British people – levelling up and unleashing the country’s potential.”

Sunak took up the top job at the treasury on Thursday after his predecessor, Sajid Javid, dramatically quit following a face-to-face argument with prime minister Boris Johnson over who should control the UK's finance ministry.

The new chancellor, who accepted Johnson’s demand that the prime minister’s team should have more say over tax and spending decisions, is examining whether to keep the fiscal rules agreed last year or potentially to loosen the purse strings to spend more on state services and infrastructure.

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Under Javid’s guidelines, the government pledged to cut debt, keep public sector net investment below 3 per cent of GDP and not to borrow for day-to-day spending. The former chancellor liked a tweet on Sunday that warned Britons were already “overtaxed”.

But the change at the treasury has opened the door for Johnson to rewrite or even scrap those fiscal rules, which Javid fought to establish last year. Prior to quitting, officials said Javid was planning to keep his budget closely aligned to the costings set out in the Conservative election manifesto.

The Javid plan allowed for £100 billion (€120 billion) of spending on infrastructure over the next five years, but if the rules were relaxed, it could open the way for investment in eye-catching projects as Johnson seeks to cement support for his government in former Labour heartlands in the north of England.

The relatively inexperienced Sunak, who was catapulted into the role of chancellor with just four weeks to prepare for the budget, considered whether to delay as he settled into his new job, but the tweet shows he has decided to stick with March 11th.

The treasury separately confirmed Sunak will not travel to the meeting of G20 finance ministers in Riyadh this month. – Bloomberg

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