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KEY POINTS
- There are reports that the Budget may be in April.
- It is then likely to be later than any Budget since the 1940s.
- This will cause problems for the representative bodies trying to make representations.
- The dates for both the Budget and Pre-Budget Report should be fixed.
I’m used to the idea that I can’t give anyone a definite yes or no when they ask me to make an appointment for a Wednesday in March.
‘Well, it depends on the Budget,’ I say.
‘Oh, is that Budget day?’ they reply, and I have to say, ‘We don’t know yet’.
I say I am used to it; that doesn’t mean I’m happy. I’m certainly not happy with the lack of notice we sometimes get, and particularly with the lack of knowledge about the amount of notice we are going to get.
Does the fact that we are already at the end of January as I write this mean that we are not going to have a Budget until the middle of March at the earliest?
I have no idea; your guess is as good as mine.
I get particularly annoyed when I ring up the Treasury press office and am told that ‘no decision has been made yet’, when I know fine well that, at the very least, certain dates have obviously already been ruled out.
This was a particular bone of contention in the recent debacle about the date of this year’s Budget.
Checking the diary
It seems to have started with a Treasury press briefing. According to the Financial Times, an unnamed Treasury official pointed out that Alistair Darling is hosting a G20 finance ministers meeting on March 14.
He didn’t say, but it is easy to conclude, that the Chancellor is unlikely to want to spend the days immediately before it in the House of Commons defending his Budget, nor is he likely to want to have to deliver a budget four days later when all his time has been taken up with the G20. That would appear to rule out both 11 and 18 March.
So 25 March then? It’s a bit tight, because the House is meant to be going into recess on 2 April, but it could just be done – there is the rest of that week to have the Budget debates and then the adjournment debates the following week.
Well, no, because the same official said that the Chancellor was also to be heavily involved in the full G20 summit on 2 April (star attraction: Pres. B. Obama).
In which case, if we could just prise the Chancellor away from bathing in the international limelight, when might he find a couple of hours to deliver probably the most crucial Budget speech in at least the past 30 years?
Oh, said the official, it could be early March, but there was no reason why it could not be delayed until April.
April Budgets
Well, it ‘could’ be early March, if the unnamed official meant that it was going to be a Budget without one of the major elements of the Finance Bill in it.
The only Wednesday left would appear to be 4 March. The deadline for the end of consultations on the draft legislation for the taxation of foreign profits is 3 March.
It is, unfortunately, not unheard of for decisions to be made about legislation when there was clearly no time to take into account the results of the consultation, but it would seem unlikely that the Treasury would want to do so in this case. So it seems far more likely that the Budget will actually be moved to April.
Not a problem, says the official, and the Financial Times, having done its homework, points out that Gordon Brown presented April Budgets in both 2002 and 2003. Two years on the trot – obviously nothing wrong with delaying it then? Well, up to a point, Lord Copper…
The Budget in 2002 was on 17 April for the entirely understandable reason that Gordon Brown was off work through almost the whole of January following the death of his baby daughter Jennifer.
Announcing the date of the Budget was the first thing he did when he got back to work, and it was consistent with an original plan to have it in mid-March, which had to be put back by the month that had been lost.
The Budget in 2003 was on 9 April. This came as quite a surprise to most commentators, who had assumed that the normal March pattern would be reasserted following the extenuating circumstances for 2002. The only obvious reason for the delay was protecting its impact on the news cycle: the Iraq war began on 20 March, so a March Budget would not have had good coverage.
Other than that, there have been late Budgets following elections, but only when an enabling Finance Bill was passed before the parliament was dissolved.
You have to go back to the 1970s to find Budgets in April: the latest was Denis Healey’s on 11 April 1978, but they were not unusual then, although it seems to have mostly been Labour Chancellors who waited until April.
However, the last time a Budget was delivered later than 18 April was way back in the 1940s. But the House of Commons is not due to start sitting again until 20 April. The first Wednesday for a Budget would therefore be 22 April. This glib talk about a Budget ‘in April’ actually therefore means a Budget that is likely to be delivered and debated later than any in the past 60 years.
Longer Bills
There is a very good reason why Budgets stopped being given in April in the 1970s, which is that it was in the 1980s that the Finance Bills started to get longer.
Other than in exceptional circumstances, the Finance Bill needs to be published before Easter so that there is time for the proposals to be digested by the profession, and proper briefings given to MPs on the Finance Bill committee when it starts to sit after the recess.
If the Budget isn’t delivered until 22 April then the Finance Bill is unlikely to be out until the end of the month. The Treasury might point out that the Finance Bill committee may not start sitting much later than usual, but the point is that those who need to make representations to it will not have had time to prepare.
Of course, one of the main reasons why you would think that the Budget should happen before 6 April is that it traditionally announces what the tax rules are going to be from that date.
These days, however, that is less and less true. Anti-avoidance measures typically take effect from the day of the Budget itself, and most of the announcements about tax rates and allowances have been made at the latest by the Pre-Budget Report.
Indeed, the last PBR gave us details of tax rates and bands for 2011-12, so it is unlikely that the Chancellor was planning to spring any more surprises in that area.
That, however, makes it all the more unreasonable to delay the Budget in the first place. It appears that the major fiscal stimulus has already been announced: according to Gordon Brown last weekend we are now past that and into the phase of getting the banks to lend again.
So, with the exception of news management, what is the reason for delay?
News management
News management is, I suspect, the only real reason; certainly the only real reason for not making an announcement before now about when the Budget will be.
The impact of it might get lost in the run up to the G20, the coverage will go on longer if comes afterwards. I wonder if anyone in the Treasury is even aware that there ARE any other considerations apart from news management.
It’s quite tempting to suggest that, if the Budget is as late as 22 April, the professional bodies should just say to the Treasury that they are sorry, but they had put aside time in late March and early April to consider their response to it, and they now have to move on to other things.
Maybe then the Government would realise how much it has come to rely on the profession to help them try to get legislation right.
In fact, of course, if the Budget is as late as expected, the representative bodes will do their best to give the same level of constructive criticism that they always do, but a compressed timescale will make it very difficult.
Meanwhile, firms will have to cancel all the provisional bookings they had made for conference suites to hold their post-Budget presentations in, and scrabble around for new ones.
Fix the date
It is surely time, as Chris Sanger suggested recently in Taxline, for a parliamentary convention that the dates for both the Budget and the Pre-Budget Report are at least fixed much earlier, and arguably for them to be fixed by reference to the calendar.
What is wrong with saying that the PBR will always be the last Monday in November, for example?
Because of the date of Easter, it might be more difficult to fix the date of the Budget in the same way, but as I have argued above it is actually the date of the recess that should determine it.
So how about the second Wednesday before the Easter recess, which would have made it 25 March this year?
In extraordinary circumstances this could be changed, but it should only be for truly exceptional reasons that could not be foreseen. As soon as it could be foreseen that a change was needed, it should be announced.
Unless the Treasury have been remarkably dilatory in checking their calendars, they can’t claim that they didn’t know they were going to have a busy March, so they have no excuse for not having had the Budget earlier, or at least having announced in good time that it would be late.
