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Users of this website will have noticed that we put up a clock counting down to the time of the Budget speech from 23 February.
We did say initially that it was the ‘expected’ time, and there were times when I thought we had it wrong (at one point a rumour went round that there would be no Budget speech at all before the election), but in the end all we had to do was to remove the word ‘expected’ from the headline.
The official announcement came on 10 March. That means that we got two weeks’ official notice of the Budget. You might think that HMRC know in advance when it will be, but so far as I can tell they don’t, although they have heard the rumours like the rest of us.
So that is the profession and the civil service who can’t predict what they are going to do on any Wednesday during March until the announcement is made, and after last year they have to put a question mark over April as well.
Here we go again
I seem to have been writing about this problem for ever. I think the first article I wrote on it was Looking for a date. I pointed out then that the shortest time we had previously been given in recent years was for 2001 when we had only been given three weeks’ notice. In 2005 we also eventually got three weeks’ notice. This year we have two weeks’ notice.
Back in 2005, I suggested that ‘you may want to speculate on what event happened in June 2001 and is expected in May 2005’. Add to that, ‘and is also expected on 6 May 2010’.
The intervening years tell the same story: it is perfectly possible to give plenty of notice of the Budget date. In 2006, we had five weeks’ notice, a few days less in 2007, and six weeks in 2008. 2009 was more controversial: we had about ten weeks’ notice of a Budget to be held on 22 April.
So, although it is only in election years that the Chancellor seems to have trouble giving more than two or three weeks’ notice of the date on which he is to hold his Budget speech, most years have a considerable degree of uncertainty about when it is to be, which is far from helpful when making plans for Budget representations, presentations to clients, etc. Not to mention the publishing schedules of magazines…
In 2005, I was just asking for more notice. My comment was that we had normally had between four and six weeks’ notice, and that we required at least that much time.
However, when the first rumours of an April Budget surfaced last year, I wrote another article, Needing a fix. This called for a fixed schedule for both Budget and pre-Budget report (PBR) dates. I wasn’t the first to make that call, and I certainly wasn’t the last. The most recent comment I saw was from George Bull in the weekly Baker Tilly email bulletin, asking,
‘Is there any reason why one of the first conscious acts of a new government should not be to commit to a definite timetable for pre-Budget reports and Budget statements in subsequent years?’
To which the answer is no, other than party politics. However, watching the ongoing fiasco has caused me to revise some of my ideas about exactly how that timetable should be set.
New thoughts
My original suggestion was that the PBR should always be on, say, the last Monday in November. What I didn’t know at the time was that there have to be at least three months between the date of the PBR and the Budget. This is part of the Code for Fiscal Stability.
You might think that this is a typical code of practice that the Government can stick to if it wants to and ignore if it doesn’t, but it is more than that. The requirement to publish annual Budget documents, including the PBR, was legislated by Finance Act 1998, s 156.
This specifies that, ‘the occasions on which those documents are to be laid [before parliament]’ must be in line with the provisions of the Code. It therefore has statutory authority.
My other proposal was that the date of the Budget should be fixed by reference to the date of the Easter recess. How could I have been so naïve?
We still don’t know the date of the Easter recess at the time of writing, though if there is one at all it may be announced as this issue comes out, since future business announcements are normally made on Thursdays.
So my revised suggestion is this. Amend the Code (which, as it happens, is currently in a revised draft) to provide that:
- 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.
Bill me
So, having suggested a way to avoid these problems going forward, what happens now? We have a Budget on 24 March. The latest that Parliament can be dissolved is Monday, 10 April if we are going to have (as everyone expects) a general election on 6 May.
The necessary resolutions, passed within a couple of days after the Budget, must be confirmed by a Finance Act before the dissolution of parliament, since otherwise the power given by Provisional Collection of Taxes Act 1968, s 1 to collect tax is lost (see s 1(5)(c)).
For the past three weeks I have been trying to get details from the Treasury press office of what they plan to do, given this shortened timescale, and they have not been returning my calls.
I finally got them to call back, and they promised to email me a comment. Here, in its entirety, is what they are prepared to let you know about the plans for passing the tax legislation that is the basis of our profession:
‘The Finance Bill will be introduced in the normal way following the Budget.’
Not only is that unhelpful, it is also untrue. If the intention is to legislate at least some key measures before the dissolution, surely the Finance Bill must be published either with the budget or in the next day or two?
Even then, it is highly unlikely that a proper Bill can be passed, and it will be disastrous if it is, as there will be no time for sensible debate.
A guide to what might really happen is perhaps found by looking at 2005. There they published a Finance Bill after the Budget only to withdraw a lot of it when the election was announced and publish Finance (No 2) Bill 2005, which (confusingly) became Finance Act 2005.
All stages were completed within a day. Even though much contentious legislation was postponed until a further Finance Bill after the election, the Act contained a lot more than the basic provisions needed for continuing tax collection, and it is doubtful whether passing legislation without scrutiny in this way is wise.
Is it, however, what we are going to face yet again this year?
