Top-up scheme planned
Budget cancelled as Sunak to unveil new support
The Chancellor will make a statement on Thursday
The Autumn Budget will not take place this year because of the chaos in the economy caused by the coronavirus pandemic.
The Treasury said this is not the right time to outline long-term plans as more immediate concerns need to be addressed.
“So we are confirming today that there will be no Budget this autumn,” said a spokesman.
There will however be a spending review to set out the overall shape of government spending.
Despite the cancellation, the Chancellor has said he will make an announcement on Thursday about new measures to support workers after the job retention scheme ends.
“I will update the House of Commons on our plans to continue protecting jobs throughout the winter,” he tweeted.
He is thought to be considering a “salary top-up” to help businesses and workers when the current furlough scheme expires at the end of October.
This would be similar to those already operated by governments in France and Germany and favoured by the Labour party, the CBI and TUC.
It would allow firms to bring back or retain workers on reduced hours, with the government paying part the remainder of their wages.
He is also said to be considering some tax changes, probably deferrals, to enable business to function without too much interruption.
He is unlikely to favour a sectoral form of furlough which Labour has also asked him to consider.
Scotland’s First Minister Nicola Sturgeon repeated her call for more borrowing powers to allow the Scottish Government to tackle the crisis.
Holyrood will also be unable to set a budget this year and has also seen its block grant cut by £309m due to an over-estimate made two years ago in the amount Scots pay in income tax.
Genevieve Morris, head of corporate tax Blick Rothenberg, said: “The announcement [by the Treasury] that there will be no Budget this year comes as no surprise.
“It would have been difficult for the Chancellor to announce tax changes in the Autumn which are aimed at recouping the costs of the pandemic, whilst the country is still in the grip of a second wave.”
She added:” What we need from the Chancellor now is a promise that there will not be overnight tax changes announced in the Autumn, or reforms which put additional burden on individuals and businesses.
“He could go a step further and extend the deadline for repayments of the deferred tax liabilities for individuals and businesses that really need it the most. This would at least provide some comfort to those that are facing a bleak winter ahead.”