3 / 8
Key facts | 3
What is the Budget?
The Budget, previously known as the Autumn
Statement, is an announcement from the Chancellor
of the Exchequer setting out what the Government
intends to spend in the coming year and how it will
raise the money to pay for that expenditure.
When does it usually take place?
It usually occurs in October, November or December
for two primary reasons. Firstly, to allow time for
major tax changes to be passed into law well before
the start of the fiscal year on 6 April. Secondly, it’s
because it’s very unusual to have a general election
in December.
When was there last a year with no Budget?
The last year without a Budget was 1768.
Why was Budget 2019 cancelled?
The decision to cancel was made after Prime
Minister Boris Johnson declared his intention
to hold a general election on 12 December.
Parliament is required to shut down five weeks
before an election and did so on 6 November,
the date previously set aside for the Budget.
What were we expecting Sajid Javid to announce?
Budget predictions are rarely correct – just compare
the pundit’s guesses about Budget 2018 with what
was in Philip Hammond’s speech last October.
Still, Sajid Javid did drop some hints, such as
stating that further reform to inheritance tax
was something that's on his mind.
A review of the tapered annual allowance was also
announced in August, while the help-to-buy ISA, due
to close to new applicants on 30 November 2019,
was likely to have been extended.
KEY FACTS
What about the economic forecast?
The Office for Budget Responsibility (OBR) had
announced its intention to publish the forecast as
usual, as it is required to do by law twice a year.
On 7 November, the scheduled publication day, the
OBR announced that the Cabinet Secretary had
advised it would be in breach of election guidance
and so the report was pulled at the last minute.
Could there be a Budget before Christmas?
In a year when the word ‘unprecedented’ has often
been trotted out by political commentators, nothing
would surprise us, and there have been murmurs
about a shorter-than-usual Parliamentary recess to
allow more time for further Brexit debate.
But, on balance, it’s unlikely, especially as it might
take longer than usual to form a new government
after the election on 12 December.
Do we need to have a Budget?
The short answer is, yes – it’s a necessary precursor
to a Finance Bill going before Parliament.
Some taxes are, in theory, only ever temporary and
need to be reapproved each year, such as income
tax which was introduced in 1799 to pay for the
Napoleonic Wars and has been maintained, on and
off, ever since.
Wasn’t there some sort of Budget in spring 2018?
The Spring Statement is the other ‘fiscal event’ in
the British Parliamentary calendar.
Historically, Budgets were always in spring but in
the past decade, the Autumn Budget has become
the main event, with the speech in spring a low-key
affair announcing the arrival of the OBR forecast
and launching policy consultations. Perhaps in
2020, though, a Budget in the spring will return.