Pensions triple and benefits in spotlight as Sunak delays budget plan

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Ministers are to review the triple pension lock and inflation-linked benefit increase over the next fortnight, according to No 10, after Rishi Sunak delayed announcing the government’s budget plans from 31 October to November 17.

The Treasury said the new date would now be a full fall statement, with Sunak telling his cabinet to take the time to get it right.

Chancellor Jeremy Hunt said he had agreed the change of date with Sunak and the statement would detail plans for debt reduction and a medium-term plan to grow the economy.

Sunak said it was “important to make the right decisions and it is time for those decisions to be confirmed by the cabinet.”

But in exchanges after Prime Minister’s Questions, Sunak’s spokesman made no commitments regarding the triple lock on pension increases, a Conservative manifesto pledge, or increasing benefits based on the inflation, which Sunak pledged to do as Chancellor.

Truss had previously pledged to apply the triple lock – a guarantee that the state pension will increase each year by the higher rate of inflation, income growth or 2.5% – after Hunt issued doubts about the possibility of an increase linked to inflation. “It’s something that’s going to be incorporated into the financial statement, we wouldn’t comment until the financial statements or the budgets,” she said.

“But what I can say is that he has shown through his record as Chancellor that he will do what is right and compassionate for the most vulnerable.”

Sunak and Hunt both stressed that tough decisions will have to be made on spending, with departments facing potential double-digit spending cuts to show the way forward to reduce the £38billion black hole. in public finances caused by the recent market turmoil.

Sunak’s spokesman ruled out reinstating the National Insurance hike, which Truss repealed, saying it was hard to pause now that it had been passed by parliament.

The spokesperson also confirmed that plans had been scrapped for Liz Truss’ supply-side reform plans, which targeted eight areas including planning, environment and childcare, which could have see a new wave of deregulation.

“There are no supply-side reform plans as we have discussed previously,” Number 10 said. Chancellor will wish to present in his autumn statement or not.”

Sunak is also believed to be wary of Truss’ promise to increase defense spending to 3% of GDP. “No decisions were made on defense spending or major spending as is customary before a fiscal event,” the spokesperson said.

But No 10 confirmed energy bill support would continue through the winter, as previously reported. The spokesperson said: “Yes, the power price guarantee will continue through the winter.”

The new date means economic plans and forecasts from the OBR will not be available until the next meeting of the Bank of England’s Monetary Policy Committee (MPC), which sets interest rates, on November 3.

Hunt said the change in plans had been discussed with Bank Governor Andrew Bailey and he “understands the reasons for this and I will continue to work closely with him”.

Hunt said: “I want to confirm that this will demonstrate that the debt will come down over the medium term, which is really important for people to understand. But it is also extremely important that this statement be based on the most accurate economic forecasts and public finance forecasts possible.

“And for that reason, the Prime Minister and I have decided that it is prudent to make this statement on November 17, when it will be transformed into a full autumn statement.”

This is the second time that the date of the declaration has been changed. It was originally announced by Kwasi Kwarteng for November 23, but was later brought forward under intense political and economic pressure to October 31, in part to inform the MPC meeting.

Bailey had previously welcomed the decision to make the fiscal statement ahead of the possible rate hike decision, calling it “correct sequence”, and said it would be helpful to know “the full scope of fiscal policy by then. “.

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