The Budget that never wasby
The annual Budget Statement is usually a big event in the tax world, but 2019 will be the year without a Budget as the government is frozen in a state of Brexit paralysis.
On 14 October, the government announced that the Chancellor of the Exchequer (currently Sajid Javid) would present his Budget Statement to the House of Commons on 6 November.
But that was before the government lost yet another vote in Parliament, this one over the timetabling of the Withdrawal Agreement Bill (WAB) which legislates for Brexit. The WAB must pass through all its stages in Parliament before the UK can ratify the Withdrawal Agreement and leave the EU. This means that Brexit cannot now happen on 31 October as the Prime Minister promised.
“Number 10 sources”, are obviously outraged that their best-laid plans have been thwarted, so alternative strategies are being wheeled out.
On Thursday 24 October, the Prime Minister called for a general election to be held on 12 December. As elections are normally held on a Thursday in the UK, this is the last day an election can be held before the country starts to close down for Christmas. An election on Thursday 19 December would be impractical as village halls, which are used as polling stations, will already be booked for Christmas plays and concerts.
By law, there must be 25 working days (not counting weekends) between the receipt of the writ to call an election and polling day. If polling day is to be 12 December (and that is not certain), Parliament must be dissolved on Thursday 7 November at the very latest.
Now it’s off
The BBC has reported that Parliament will be dissolved for the election campaign on 6 November.
On Friday 25 October, Sajid Javid confirmed on BBC Breakfast: “The Budget is not going ahead because we are planning now to dissolve parliament on the 6th, so clearly you can't have a Budget on the same day.” No alternative date for a Budget Statement was given.
Who decides the date of the election?
The Fixed-Term Parliaments Act 2011, which was passed during the coalition government, requires a general election to be held on the first Thursday of May in every fifth year. For a general election to be held at any other time there must be a vote by two-thirds of MPs (434) in favour of the election, or a no-confidence vote in the Prime Minister.
However, after the no-confidence vote the law requires a period of 14 days in which the MPs try to form an alternative government. If no alternative government can be formed in that period Parliament dissolved for a general election. Taking into account that 14-day waiting period it is now too late to use that route for a general election before Christmas.
This is super-majority of 434 votes in favour of a general election is not guaranteed. MPs are due to vote on the Monday 28 October as to whether to approve a general election. If that election is rejected, Prime Minister Johnson has threatened to freeze the legislative process so that no draft law could proceed through the House of Commons, including the Withdrawal Agreement Bill to legislate for Brexit. The Labour Party has indicated that it could abstain or vote against Johnson’s parliamentary motion to seek an election.
We live in interesting times.