Hammond springs surprise Budget timetable overhaul

23 Nov 16

Chancellor Philip Hammond delivered his first and last Autumn Statement in parliament today, announcing that the annual fiscal event will be abolished with immediate effect.

From 2017, the Budget, which had been a regular March fixture, will instead be announced in the autumn and there will be a Spring Statement in order to respond to economic forecasts from the Office for Budget Responsibility, but no major changes will be made.

However, the chancellor said he reserved the right to take action in the Spring Statement if “unexpected changes in the economy require it”.

Hammond said this was a “long-overdue reform to our tax-policy making process” that would provide more certainty for taxpayers and enable proper consideration of changes before they are implemented.

“No other major economy makes hundreds of tax changes twice a year,” he said. “Neither should we.”

Big policy announcements in the autumn will be followed with finance bills introduced immediately afterwards.

The government said it will aim to reach royal assent for these bills in the spring, before the beginning of the following tax year when most changes would take effect.

Currently, the government delivers its Budget in March, leaving less than a month before the start of the financial year in April and little time for scrutiny of the plans.

Hammond noted that the change will bring the UK in line with best practice recommended by the International Monetary Fund, the Institute for Fiscal Studies, the Institute for Government and many others.

Just last week, the IMF suggested Britain should scrap the Autumn Statement, which it said had taken on too much importance in the past few years, sometimes eclipsing the Budget itself.

The approach prevents “comparison on trade-offs and comparisons across decisions” and leaves businesses struggling to keep up with “the frequency of changes to the tax system”.

The announcement of the Spring Statement prompted laughter from Labour MPs opposite as the chancellor had just lambasted the fact there were two significant events in the fiscal calendar.

However, Hammond explained that the OBR is mandated to produce two economic and fiscal forecasts per year, and the government is required to respond to both.

The first Spring Statement will take place in 2018. ‘Legislation Day’ – when tax policy consultations and draft finance bills are published – will also move from that year.

Since 2011, ‘Legislation Day’ has followed the Autumn Statement, with the exact date announced by written ministerial statement afterwards. It will now take place in the summer.

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