The Chancellor has now broken cover, announcing that the Budget will take place on 26 November – about the latest possible date that it could be, without slipping into winter and risking “nightmare before Christmas” headlines.
Last week, shares in Britain’s biggest banks – shares included in the pension funds of most UK workers – fell by as much as 5 per cent following rumours that the Treasury will slap an additional levy on city profits.
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Will more small businesses be subject to VAT? Not sure – well-connected journalists have reported this is on the table, and Reeves’s spinners refuse to respond either way. What about higher taxes on pension pots? Again, media stories say this is being considered and the Treasury will neither confirm nor deny it.
“People should take care not to make major, irreversible decisions based on speculation about measures that may never happen and which they may later regret,” Jason Hollands of wealth management firm Evelyn Partners warned after the Budget date was announced.
Global investors are getting jittery. The cost of issuing long-term debt rose to its highest level of the century so far this week, and the value of the pound fell by more than 1 per cent, seemingly signalling concern from financiers about the ability of the Government to bring the public finances under control.
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The response from those in Reeves’s camp, speaking privately, is that turmoil in the markets makes it all the more important for her to stick to her fiscal rules rather than ramping up borrowing further – as some on the left demand – but that it would be irresponsible to break the secrecy of the Budget process by providing a commentary on which tax rumours are true and which are not.
For now, all we know is that the news is likely to be bad. Reeves hopes that holding the Budget late will give the Office for Budget Responsibility more time to “score” the impact of the Government’s pro-growth policies – that is, to put a number on how much they will boost the public finances and therefore reduce the need for further savings.
There are still 12 weeks until the Chancellor tells us her plans. If she does not start giving clearer indications of how she will balance the books, we will all be the poorer.
Hugo Gye is The i Paper’s political editor
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