Labour introduced the idea of a pre Budget budget in the late autumn. The old routine was to fix the spending levels in the Auutmn Statement, and then raise the money to pay for it in the budget. Post Mr Brown, the Chancellor gives an overview of spending and taxes in the Autumn Statement, as a prelude to the Budget.
Mr Brown wanted to get credit for announcing something twice. He then developed a passion for announcing future years tax changes in advance as well, if they were favourable. Then you could announce something several times over. There are, however, some advantages to this system. Giving people more notice than a year for changes can be helpful. Provoking discussion of tax ideas in the autumn before putting them into law the next spring can allow greater consultation. The present Chancellor set out a long term plan to cut Corporation Tax, maximising the favourable impact the cuts can have by giving current and future investors in the UK a longer view of what they will be paying.
In this spirit people can put forward their ideas for the Autumn Statement as the Chancellor mulls his judgement. It is that time of year again.
Many of you would doubtless like the Chancellor to cut spending more. Ending HS2, reducing overseas aid, making more inroads into welfare spending as jobs pick up and others spring to mind. This would allow more scope for tax cuts. How far would you go next year with spending controls?
Finding ideas for tax cuts is the relatively easy bit. The UK is overtaxed, like most EU democracies. It has two governments for the price of three, thanks to the ever increasing tax and regualatory cost of the EU.
I favour cuts to tax rates on income, enterprise and saving. A lower CGT rate would increase receipts from this tax. Tapering Stamp Duty could help the government’s plans for more people to own their own home. Taking more people out of tax altogether, and allowing people higher up the income scale to also benefit from a higher tax free allowance, would make working more worthwhile. Rolling back green energy levies would be popular.
What are your own preferences?