It's not the PBR that should be dropped. It's the Budget

The media have been reporting that George Osborne may cancel the PreBudget Report. He has already promised us that he will announce the outcome of the Departmental Spending Review on 20 October. Apparently this may be branded the 'Autumn Statement' which would be a retrograde step in my view.

We haven't had a stand alone 'Autumn Statement' in that form for almost 20 years. The last was in November 1992 when Norman Lamont was Chancellor. The following year Ken Clarke merged the Spring Budget with the Autumn Statement. Effectively he combined publication of the Government's spending plans with publication of taxation plans. This made perfect sense to me. Who else considers the income and expenditure sides of their budgets many months apart?

Ken Clarke's annual Unified Budget was delivered on the final Tuesday of November each year. It would have been better a month earlier as the following months included the xmas break of course. But we could at least consider more fully the impact of Budget proposals so that these could be finalised before they came into effect the following April. With a Spring Budget many proposals have to wait a year before they can come into effect. Others are announced to take immediate effect even though the law is not in place and is only enacted some months later. A return to such an approach would not fit well with the Coalition Government's promised 'new approach to tax policy making'.

It is clear to me that making Budget announcements in the Autumn reduces uncertainty. It means there are some months before the start of the next tax year when new rules might come into effect. It would also make it easier to provide for the promised 3 months notice of draft tax legislation.

When Labour came to power in 1997 Gordon Brown split things up. He delivered a Pre-Budget Report each autumn and a separate Budget each spring. In theory this was supposed to encourage a national debate several months in advance of the main Budget Statement. Even if that was the original motivation, after a short while, the only obvious rationale for the division was an obvious political motive. It provided Gordon Brown with two annual opportunities as Chancellor to be the centre of attention and, he hoped, to outshine Tony Blair whom he wished to succeed.

I accept that the Treasury must be under great pressure now. The Coalition Government required them to work hard to allow for the introduction of far-reaching reforms in its first 50 days. Of course it must be tempting to abandon the idea of a PBR this year. But I can think of no good practical reason for continuing the announcement of separate Budget statements each spring. Ken Clarke's logic makes as much sense today as it did in 1993. And George has a different relationship with the PM to that which Gordon Brown had with Tony Blair.

Yes, we've had 2 Budgets already this year and will see our third Finance Bill in the summer. Perhaps it is too much to expect a full Budget this Autumn. But I do hope that's what we get next year. And maybe there could be just a quickie Budget in the Spring to pave the way.....