HE came, he saw, he abolished. Chancellor Philip Hammond's first autumn statement on Wednesday will also be his last, he told us. As his hellish post-Brexit forecasts sank in and a sense of foreboding seeped through the Commons, this announcement raised some welcome, if premature, laughs as 'Spreadsheet Phil' ended his turn at the dispatch box.
Instead of a spring budget and autumn statement there will now be an autumn budget and spring statement, he said. Many MPs couldn't see much of a difference and burst into giggles, wondering why he didn't just have a single spring budget. But as the Chancellor then reminded them, the Office of Budget Responsibility (OBR) is mandated to produce two forecasts on the nation's economic outlook per year, hence two associated events.
It was widely seen, at Westminster and Holyrood, as a good thing. The autumn statement is only meant to tweak the budget, a tidying up exercise to bring fresh data into the government's financial plans. There are spring and autumn budget revisions at Holyrood too, and they pass without comment. But the autumn statement at Westminster had come down with a bad case of mission creep, becoming a second mini-budget, and adding uncertainty to the fiscal regime.
So in future the UK's autumn budget will be the "single fiscal event" of the year, and the spring statement will be demoted back to the minor leagues. The transition process means there will, weirdly, be two full budgets in 2017, one in spring and one in the autumn, followed by the establishment of the spring statement / autumn budget pattern in 2018. Europhile cynics wondered if next year's double budget might be linked to the UK government triggering Article 50 and the Brexit withdrawal - one before, while order still reigned, and one afterwards to cope with the chaos. But the government denied it. Well, they would.
But while the principle went down fairly well at Holyrood, where SNP ministers had been anticipating change, it's not all plain-sailing. The big question now is: just what does autumn mean when it comes to autumn budgets? Because the timing is critical to Scotland's own budget process, and if future UK budgets also fall in late November, it will cause problems. Indeed, calendar creep is already a headache at Holyrood.
In 2013, the SNP Government published its draft budget on September 11, giving MSPs five months to scrutinise and challenge the plans and pass the required legislation. This year, the Government will publish its draft budget on December 15, giving Holyrood just two months to process it. This is not the Scottish Government's fault. It is partly due to Westminster holding its autumn statement so late in the year, and partly because Holyrood is growing up.
The devolution of new powers over tax, borrowing and welfare means the Scottish budget is becoming ever more complicated. The Scottish Government must now wait for the OBR forecasts to emerge alongside the autumn statement, as these affect the size of the block grant. The snag is that there is no way to make up for lost time at the other end of the process. The Scottish Budget Bill must be published next year by January 24, and it must be passed by February 14 so that councils and health boards can set their budgets in March and June.
The later the autumn statement, or budget, the more compressed and unsatisfactory this inflexible process becomes. The irony is that new powers mean the 2017-18 budget will be the most important yet passed at Holyrood, but also the one subject to the least scrutiny. As more powers accrue to the parliament, there is a risk this problem becomes more acute.
An autumn budget could also mean Scotland facing big changes in devolved taxes at short notice, particularly income tax. The general rule (thanks to the fiendish fiscal framework) is that when Westminster cuts its version of devolved taxes, Edinburgh's budget goes up. When it raises them, Scotland's budget goes down. For instance, if the Chancellor had dropped plans to raise the threshold for the 40p rate of income tax south of the border to £50,000 by 2020, Scotland’s budget would be £100m lighter. Governments don’t like £100m surprises like that.
Holyrood sources think the autumn budget falls in October, after the party conference season to avoid bad news there, and before Christmas to avoid festive misery. Westminster insiders reckon the change will provide some overdue "synergy" between Edinburgh and London. Perhaps. But the timing of the autumn budget is now a test of goodwill between the two.
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