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Time to decide

22 June 2010 / Mike Truman
Issue: 4260 / Categories: Comment & Analysis , Budget 2010
It’s time to campaign for a fixed timetable of pre-Budget reports and Budgets, says MIKE TRUMAN


  • Why is it an ‘emergency’ Budget?
  • Rumours about why the timing of it changed.
  • Fixing the date of the Budget and PBR.
  • Taxation campaign to be launched.

You may have noticed that our news stories have started putting quote marks around ‘emergency’ Budget.

The title, used so often already by the new Government, has come to be seen as an official one. That,Man seated at massive table shaped like a clock face in turn, is part of the inevitable spin that goes with politics.

The ‘second’ Budget, or the ‘additional’ Budget would not have prepared the public well enough for the spending cuts and tax rises to come.

Complaining that politicians spin is like complaining that salesmen are pushy or that strikers fall over in the penalty box; it’s an unattractive but unavoidable part of their trade.

There is, however, a difference between choosing your words carefully to make an impact, and manipulating dates and times in a way that causes difficulty in the real economy.

Problem of timing

I am writing this before the ‘emergency’ Budget on Tuesday, but the article will not appear until after it. I don’t, therefore, know whether George Osborne finished his Budget speech in the way that John Whiting of the CIOT once suggested – ‘I commend this Budget to the House and will return to give the PBR on X November’ – but I doubt it.

The early signs were encouraging. There was a clear promise that the Budget would be within 50 days of the election, and despite the delay caused by negotiating the coalition this timetable was not only met, the date was announced as far in advance as one could expect, given the circumstances.

The problem arose over the time. The original announcement was that, because 22 June is a Tuesday when the House of Commons starts at 2.30pm, the speech would be at 3.30pm following questions.

As we covered at the time on our blog, this was changed by a business motion passed a week before the Budget that the House should sit on 22 June as if it was a Wednesday. The motion was listed among a number of far more wide-reaching changes to the procedures of the House, and appears to have been passed entirely without discussion.

Leaving aside the Alice in Wonderland approach that allows Parliament to change the calendar, at least within its own precincts, the question is why this happened.

Conspiracy or…?

The simplest explanation is that the pressure of business meant that the Budget had to be on a Tuesday rather than its now more normal Wednesday, and that no one immediately realised the effect would be to move it three hours later, because of the later start of the Parliamentary day.

When the problems that this would cause the media and the tax profession were realised, with a return to late-night poring over Budget notices, the decision was made to move to Wednesday timings.

The problem with this explanation is that it assumes the Treasury has completely forgotten how Parliament works in the government changeover. Surely, as the diaries were being perused, someone was able to explain the reasons why Wednesdays at 12.30pm have been the traditional day for Budgets in recent years?

If the Parliamentary timetable disclosed some major time constraint that might explain it, but it doesn’t . There is no obvious reason why the Budget should not have been on 23 June and everything moved along a day to accommodate it.

Perhaps the refusal of the Treasury press office to admit that the time might be changing even after the motion had been listed (see Taxation on Twitter for more details) has made me unduly cynical, but I have heard rumours that actually this was all about managing the press cycle.

The story goes that getting the spin you want on a Budget is thought to be easier with a later speech. The Opposition will normally not comment for a couple of hours, until they have had time to read the press notices in full and understand them, and as a result it misses the early evening news programmes and the first editions of the papers.

The agenda is then set by the Government. It was the realisation that the 24-hour nature of news means this is no longer true that resulted in the switch back.

Fixing the time

How credible that is I am not sure. It could just as easily be an attempt to avoid World Cup or Wimbledon clashes, but the very fact that the rumour spreads means it is time for us to remove both the date and the time of the pre-Budget report (PBR) and the Budget from this political interference, so that we can all make proper plans.

Fixing the time is easy, now that the problems of this year have highlighted the need to do so. Both the Budget and the PBR speech should start at 12.30pm. That means, in practice, they should both be on a Wednesday.

This is a good day for such a statement to be made, splitting the working week between preparing for it and responding to it, both for the tax profession and for civil servants and politicians.

So, the remaining questions are how and to what extent the dates should be fixed, and in what way this practice should be embedded.

Fixing the date

John Whiting’s proposal has a lot to commend it and, if it has advantages over mine, I would have no problems with it.

However, it seems to me that there is no reason why we should not have greater certainty about two of the most important features of the financial calendar. I have seen nothing yet to dissuade me from the proposals I put forward when I last wrote about this in The dating game:

  • ‘the PBR should normally be given on the second Monday in November (the last Monday risks clashing with the period just before or after the State Opening of Parliament);
  • ‘the Budget speech should normally be given on the first Wednesday of March;
  • ‘any date other than these should be announced to parliament by the leader of the House on the first statement of future business given after the summer or Christmas recess for the PBR and Budget respectively, unless a later change is caused by genuinely unforeseen circumstances.’

The only addition I would now make is to say that the time should also be fixed as 12.30pm unless, again, it is either announced in the first statement of business, or there are genuinely unforeseen circumstances.

The greater problem is how to embed these proposals. My previous suggestion was to include it in the Code of Fiscal Responsibility, which has legal force. In February, a Fiscal Responsibility Act was passed, which reinforced the role of the Code, so that had some merit back in March.

Unfortunately, the new Chancellor of the Exchequer, when he was in opposition, was derisive about the new Act, and also about the Code. As he rightly pointed out, the Act provides for no sanction if it is broken except for an order to be passed by which the Treasury takes itself to task for its own failure.

Unless the Budget has abolished the Code, that still seems to me to be the best way of trying to make these proposals stick. If, by the time you read this, the Code’s abolition has been announced, we will have to attempt to embed it simply by a clear statement from the Government, which is then acted on for long enough to make it part of our unwritten constitution.

A Taxation campaign

And when I say ‘we’, I mean we. It may not seem to be as pressing an issue as some others, particularly those which may have come up in the Budget, but I think it is an essential first step in trying to depoliticise the creation of tax legislation that is created because it will work in the long term, and not because it will meet a temporary political need.

I intend to send a copy of this article to David Gauke, the minister with responsibility for the Budget process, and ask for his commitment to this change.

If that is not forthcoming, we are going to need to campaign on the issue, getting signatures to an online petition and lobbying for support from backbench MPs.

I hope Taxation readers will support the campaign as it progresses over the coming months, aiming to get a firm commitment to this new approach in time for the PBR this year.

In the meantime, the announcement of the ‘emergency’ Budget did not come early enough for me. So, as you listened to the speech and as you read this article, I’ll be on a cruise ship in the Mediterranean.

It’s a measure of how sad a tax geek I am that I will be looking for an internet café in Cannes on Tuesday afternoon to see what has happened...

Issue: 4260 / Categories: Comment & Analysis , Budget 2010
1 Comments Hide
REBECCACAVE, 06/23/2010 10:39:00

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