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You've got my vote
A nice summary of the arguments, Derek. Many thanks. You have the support of the AccountingWEB team. Even if we acknowledge that some of our antagonism to the ritual is based on the futility and stress of trying to cope with all the Budget paperwork in a very short time, the parliamentary conventions that have grown up around the Budget are ludicrous and damaging.
I understand that the rigmarole is based on the requirement for the Finance Act to be given royal assent by 5 August or, if later, four months after the date of the initial Commons budget resolutions. (Though the CIOT helpfully pointed out recently that Finance Act 2011 amended the Provisional Collection of Taxes Act 1968 so that Budget resolutions now apply for a maximum of seven months).
I remember questioning the arrangements in 2002 when Gordon Brown's 10-day-old daughter died in January, delaying the presentation of the Budget until 17 April - 11 days after the beginning of the tax year. They were very sad extenuating circumstances, but the dependence of the country's financial infrastructure on such a situation seemed an anachronism too far.
The points on short-termism and political point-scoring are well made too. The coalition government has committed itself to a new approach to tax-making policy that involves much more rigorous consultation. Some of the policy proposals may not be popular, but by giving them a public airing first rather than springing them on an unsuspecting nation at the Budget, George Osborne is heading in the right direction. The hammering many of his last minute surprises (the "pasty tax" and static caravan VAT increases, tax relief cap, and so on) should encourage him to stick to his roadmap.
The logic of a more strategic approach to government financial management and taxation is compelling, but as many have questioned before, is there the political will in Westminster to do something about it?
There's a debate on tax simplification with John Whiting, Robert Maas and Rebecca Benneyworth at Chartered Accountants Hall in London tonight. I'll ask for their views on the ICAS proposal.
How about ....
... fixed term parliaments, and all contending parties have to present their full term budget prior to polling day?
Not Realistic
... fixed term parliaments, and all contending parties have to present their full term budget prior to polling day?
Well, of course we now do have fixed term parliaments, thanks to this Government's Fixed Term Parliaments Act.
But the first rule of politics is "Events, dear boy, events", as Harold MacMillan supposedly said. Bad weather, earthquakes, and man-made events beyond a British government's control (particularly overseas) all are capable of throwing an economy into turmoil and may require a fiscal response.
Take the fuel duty freeze. The last government set the rules for how these rises should take place - precisely the sort of forward planning that is called for here. And yet, I only know of the most ardent eco-warriors thinking these plans should have gone ahead in the face of oil prices being around double the price they were before.
To suggest a government could set its plans in advance for the full five years of the new fixed term is fine in principle (and an incoming government often does set out the principles that it will apply and its direction of travel), but unrealistic in practice.
'Tis a terrible thing ...
... to be plagued with sardonic wit!
I don't think anyone understands me, let alone the wife!!
Qualified support from Wyman symposium speakers
As promised, I asked the panel at the ICAEW Tax Faculty debate on tax simplification on Wednesday night what they thought of the ICAS proposal. Here’s what they said:
Robert Maas (Blackstone Franks): "I would agree because the Budget has lost its impact under George Osborne. Exposing ideas in advance is good - I’d like to see legislation earlier."
John Whiting (CIOT & OTS tax policy director): "The Budget cycle is necessary. Occasionally they need to talk about other things, like the economic cycle or dealing with the deficit.
"Used properly, the policy consultation and development cycle can be very effective."
David Heaton (Tax Faculty & Baker Tilly): "I would go with a longer cycle and start the process on the basis that legislation is exposed for much longer so the consultation can be telescoped. Because of time pressure, some feedback is ignored at the moment. If the same feedback was used and explored, tax policy would benefit."
John Whiting: "I’d like to take slightly longer to get the Finance Bill through. At the end of the day that’s one of the biggest constraints."
It makes a lot of sense
The suggestion to scrap the annual budget and merely react if and when events occur that require a governmental reaction makes a lot of sense. I suspect we would see fewer changes in legislation as the government would not sit down each year with a mindset of "what shall we change now".
Things like personal allowances etc could simply be adjusted automtaically each year eg by linking to, say, RPI