Emergency Budgets are a bad idea, but with the economic changing fast Reeves may not have the luxury of waiting until Autumn to raise taxes, says Tim SarsonLast autumn, after a long, long summer of speculation and rumour, our newly installed Chancellor of the exchequer Rachel Reeves delivered what she promised would be the first in a new annual series of Budgets. One autumn event each year, with the spring forecast seemingly relegated to more of a progress update than a Budget with a capital B.It’s not the first time a Chancellor has promised this.
The Treasury has longed to get back to a once-a-year cycle for ages. But it’s easier said than done. A year is a long time in economics.
Indeed, since 20 January when the new US President was sworn in, a day can seem like a long time. So, it was a brave call.But what happens when you promise no event at a time when people are used to an event? Especially just before the fiscal year end, when tax rates and thresholds traditionally get adjusted? You get speculation, and while we are not expecting one, the spectre of the famous “emergency Budget” looms.
Spoiled with fiscal eventsWe’ve been rather spoiled with fiscal events and emergency Budgets recently. This peaked back in 2022 when, lest we forget, we endured three fiscal events in three months. It’s been more sedate since then, but we still had two Budgets in 2023 and 2024.
Objectively speaking, emergency Budgets are a bad idea for many reasons. Constant tinkering with th.
