A spring Budget cycle will resume shortly

By November 1, 2023LinkedIn

The Chancellor has announced that he will issue an Autumn Statement on 22 November.

Perhaps it was just coincidence, but a year to the day after Liz Truss was elected Prime Minister, the current Chancellor (and her second) announced that there would be an Autumn Statement on 22 November 2023. In autumn 2022, Ms Truss’s first chancellor, Kwasi Kwarteng, presented The Growth Plan, which was widely labelled a mini-Budget, but strictly speaking was no such thing. Budgets need to be accompanied by an Economic and Fiscal Outlook, produced by the Office for Budget Responsibility (OBR), something Mr Kwarteng studiously avoided.

Mr Kwarteng’s non-mini-Budget was rapidly overtaken by events, and an Autumn Statement 2022, with accompanying OBR report, was presented by Jeremy Hunt in mid-November.  Surprisingly 2022 ended as a year with plenty of “fiscal events”, but no formal Budget. By the time Mr Hunt delivered the spring 2023 Budget, over 16 months (and three Chancellors) had passed since the last Budget in October 2021.

If you find yourself wondering whether Budgets are autumn or spring affairs, you are not alone. Back in November 2016, the then Chancellor (Philip Hammond) announced that he would return to an earlier practice and have a single Budget each autumn. The move was welcomed by many independent observers, such as the Institute for Government, which saw it as a way of preventing what had become a pattern of an alternating pattern of Budgets and quasi-budgets every six months or so.

The goal of one big Treasury event every autumn soon fell victim to election timings (2019), Covid-19 (2020, 2021) and then the Ukraine war (2022). The choice to make an Autumn Statement in 2023 is probably also down to election scheduling, as the spring Budget 2024 is widely seen as setting the backdrop to the next general election.

Mr Hunt is not expected to produce much in the way of surprises on 22 November. Attention is likely to be on the OBR’s forecasts, which will indicate how much wiggle room there is for tax cuts next March. Whether or not they emerge, there is one other Budget tradition that is set to repeat soon – the first Budget after an election is the one in which the bitter tax increase medicine is generally administered.

Tax treatment varies according to individual circumstances and is subject to change. The Financial Conduct Authority does not regulate tax advice.