Get ready for two Budgets in 2017
The Chancellor confirmed today that the Autumn Statement has been scrapped and will be replaced with an Autumn Budget and a Spring Statement.
The announcement opens the possibility that there will now be two Budgets in 2017.
Towards the end of the Chancellor’s speech, Philip Hammond revealed the Autumn Statement would be abolished in future years, saying there was no need for major tax changes to be made twice a year.
Hammond said it was a “long-overdue reform” to the government’s tax-policy making process and brings the UK into line with best practice recommended by the IMF, IFS and the Institute for Government.
In what sounded like a resignation, he announced: “This is my first Autumn Statement as Chancellor. After careful consideration, and detailed discussion with the Prime Minister, I have decided that it will also be my last,” he said. “Mr Speaker I am abolishing the Autumn Statement.
“No other major economy makes hundreds of tax changes twice a year, and neither should we. So the Spring Budget in a few months will be the final Spring Budget. Starting in Autumn 2017, Britain will have an Autumn Budget, announcing tax changes well in advance of the start of the tax year.”
Amid laughter from MPs Hammond said the Spring Statement would be an opportunity for the government to respond to the forecast from the Office for Budget Responsibility (OBR), but it will not be a major fiscal event.
On the fiscal process going forward, Hammond added: “If unexpected changes in the economy require it, then I will, of course, announce actions at the Spring Statement, but I won’t make significant changes twice a year just for the sake of it. This change will also allow for greater Parliamentary scrutiny of Budget measures ahead of their implementation.”
Peter Spencer, chief economic advisor to the EY ITEM Club, added: “Many thought this would be the last Autumn Statement, but no one thought that it would be replaced in future by an Autumn Budget, with the 2018 and subsequent Spring Budgets relegated to simple Statements. This reform is sensible but, with the road ahead so uncertain, it remains to be seen whether the Chancellor will be able to stick to his ambition of avoiding fiscal changes in the spring.”
Reaction to the news was mixed from tax and business experts taking part in AccountingWEB’s live Autumn Statement panel discussion.
Nigel Harris of Burton Sweet commented: “An Autumn Budget and a Spring Statement, I suppose it makes sense”, while tax writer Wendy Bradley agreed: “Excellent news! Abolition of Autumn Statement,” adding that the consultation schedule might work better and give a longer lead in time.
However, Rebecca Cave added: “Will have to cover two Budgets in 2017!”
Jonathan Russell of ReesRussell also speculated about political events in 2017: “What chance Spring Budget followed by an election?”
What’s your view on this change to the tax-policy making process? Will two Budgets in 2017 be too much to deal with?