Do us all a favour, Mr Osborne, and scrap the Autumn Statement

The excitement is not exactly building to fever pitch. Very few of us will have cleared out our diaries, and almost no one will have cancelled any holidays, or indeed postponed anything urgent, such as getting the car washed, or checking whether the boiler needs servicing.

As Chancellor George Osborne prepares to deliver his Autumn Statement next month, it is hard to imagine that even he is very interested in what it might say.

The one really worthwhile thing Osborne could do on the big day is stand up in the House of Commons and say: “I’m getting rid of the Autumn Statement. The economy is steadily getting better and, as a Conservative, I believe the last thing it needs is more meddling from politicians.” And then sit down again.

The idea of a mini-Budget halfway through the financial year was one of Gordon Brown’s inventions during his long and little-missed reign as Tony Blair’s chancellor.

Earlier holders of the post – including titans Gladstone, Disraeli and Churchill – managed to get by with one big set-piece speech a year, in which they laid out their tax and spending plans, and the direction of economic policy, for the 12 months ahead.

If there was an emergency, or a sudden global crisis, they might return to parliament for a mini-budget: Labour chancellor Denis Healey needed a few as he scrambled to find a way through the multiple disasters of the 1970s.

But, as a rule, the economy did not change so dramatically that the plans set out in March or April needed to be changed only a few months later.

One big speech a year, however, did not satisfy Brown’s monstrous ego, or his determination to outshine the prime minister. It didn’t give him enough opportunities to tell us how he had ended ‘Tory boom ’n’ bust’, or about how much he was ‘investing’ in public services. He needed at least two big occasions to do that.

Traditionally, the UK has always had a mid-year economic update, but for most chancellors it was simply an exercise in modifying forecasts as conditions changed, and occasionally pointing to changes that might be made the following year.

Brown replaced that with a full-blown Pre-Budget Report (PBR), which grew and grew during his long chancellorship into an epic speech.

He’d include a few conjuring tricks, lavishing extra spending on his favoured groups, and sneak stealth taxes into the small print to pay for it all. In effect, we ended up with two Budgets a year.

In fairness, Osborne has scaled that back, replacing Brown’s PBR with the Autumn Statement. But it is still treated as a mini-Budget, complete with the speech, political gimmicks and reams of earnest analysis.

Last year, he used it to shelve a 3p rise in fuel duty – rather unnecessarily as oil prices have fallen anyway this year. The year before, he used it to set out a two-year pay freeze for public-sector workers, as well as lower his growth forecasts for the economy. This year we can expect a similar mix.

There could be an upgrading of growth forecasts to reflect the stronger-than-expected economy, gimmicks, such as more help for the property market or the repeal of a few green taxes to keep energy prices under control.

Plus there will be lots of crowing at Ed Balls over why Britain didn’t need his Plan B after all, and how his predictions of a triple-dip recession have left him looking ridiculous.

Joshing the opposition might be fun, but the rest is at best unnecessary and, at worst, harmful. There are two big problems with staging two annual Budgets.

First, it encourages the chancellor to do more than is necessary. As Parkinson’s Law states, work expands to fill the time available. Likewise, government policies expand to fill the number of speeches the chancellor has to deliver.

If you build up the Autumn Statement into a big deal, then you need something to announce, otherwise commentators will dismiss it as a damp squib. There will be some frantic scrabbling around at the Treasury for some half-baked policy ideas.

A windfall levy on payday loan companies, or a subsidy for organic baby food, for example, would generate useful headlines in the next day’s papers. But all those gimmicks add up, and while in themselves they don’t make much difference, collectively they can become a drag on the economy.

Secondly, it creates the impression that what matters to the economy is what the government does. Gordon Brown might have believed that, but few other people do. A Tory should recognise that the economy needs less meddling, not more.

The fewer Westminster wheezes, the more chance entrepreneurs will have to create some real growth.

The course of UK economic policy is clear. It is a mix of modest deficit reduction, cheap Bank of England money, help for the housing market to encourage consumption, and probably a few tax cuts closer to the election to shift a few swing voters into the Conservative camp.

You can argue about whether it is the right or wrong mix. But we don’t need to hear it again. If Osborne had the courage to axe the Autumn Statement, he would be taking a step towards scaling back government – and doing us all a favour.


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