The Chancellor’s March Budget and Autumn Statement form two of the most important dates in the financial calendar, containing the Office for Budget Responsibility (OBR) economic forecasts on which fiscal policy is based. Historically, the Budget acts as the main source of economic policy decisions, while the Autumn Statement provides an update on the state of public finances.
Recently, however, the Autumn Statement has been used to announce changes to tax and policy. In January, a treasury Select Committee report criticised the ‘second Budget’ role that has been given to the Autumn Statement. MPs said this had the effect of creating uncertainty for businesses and additional costs for the tax payer.
The Committee argued that the March Budget should be re-established as the main focus of policy making. An actual ‘second Budget’ should, it said, only be used in an emergency situation where it would carry a long-term benefit. Elsewhere, the Committee report raised concerns about inadequate time allowances for MPs to properly scrutinise the Finance Bill, the Bank of England’s decision making process, the effectiveness of the Funding for Lending Scheme – designed to boost credit to small businesses – and uncertainty surrounding planned increases in fuel duty.
This year’s Budget will be held on 20 March.