Jeremy Hunt’s Halloween Budget will go ahead ‘whoever is Prime Minister’, sources suggest 

The Halloween Budget statement will go ahead regardless of who becomes Prime Minister, it was suggested last night. 

The crunch October 31 announcement will take place regardless of which contender triumphs in the Tory leadership contest and irrespective of who was Chancellor, sources said. 

The statement – known officially as the Medium-Term Fiscal Plan – is expected to set out how the Government will juggle tax rises, spending cuts and welfare system changes to fill an estimated £40billion hole in the public finances. 

Chancellor Jeremy Hunt, who has scrapped most of the tax cuts announced by his predecessor Kwasi Kwarteng, has already warned MPs that ‘decisions of eye-watering difficulty’ would be needed to stabilise public finances. 

The Sunday Times reported that the Treasury wanted to ensure a ‘proper financial statement’ before the next meeting of the Bank of England’s Monetary Policy Committee on November 3. 

The committee is expected to raise interest rates yet again to combat soaring inflation. 

Fears have been voiced that following Prime Minister Liz Truss’s dramatic resignation last Thursday, the statement would have to be delayed. That is despite signs that Mr Hunt, who was appointed only just over a week ago, needed to continue to calm the markets. 

But Ms Truss’s departure and the fact that her replacement may not be known until Friday, have fuelled concerns that the statement would have to be postponed or even cancelled, risking fresh turmoil on the currency and bond markets. 

Mr Hunt is reportedly considering plans to freeze defence spending at about 2 per cent of GDP – the target for Nato member nations – until 2026-27, but then commit to increasing it significantly to hit the target of 3 per cent by 2030. Defence Secretary Ben Wallace, who has indicated he could back Boris Johnson in the leadership contest, has said that any cut would be a resigning matter for him. 

The independent Office for Budget Responsibility, whose support is critical to ensuring the creditibility of Mr Hunt’s proposals, has already received details of the Chancellor’s fiscal measures and is apparently set to receive minor measures in the coming days. 

A source said ‘the picture is grim’, adding that whoever won the Tory leadership contest, ‘tough decisions will need to be made’. 

It is understood that Mr Hunt spoke to two of the leadership contenders, Rishi Sunak and Penny Mordaunt, on Friday. 

Sources close to Ms Mordaunt confirmed to The Mail on Sunday last night that Mr Hunt would remain Chancellor if she won and the other two candidates, Mr Sunak and Mr Johnson, are likely to keep him in post as well.

A Treasury source stressed that the final decision on the timing of the statement was a decision for whoever won the leadership ballot. 

He said: ‘The Chancellor wants it to be on the 31st, but ultimately, it’s up to the new Prime Minister.’