The chancellor has announced the timing of her next formal report to Parliament.
Cast your mind back six Chancellors ago to Phillip Hammond (aka Spreadsheet Phil) who introduced a major change in Budget scheduling. In autumn 2016, he announced that the Spring Budget and Autumn Pre-Budget Report (PBR) would be replaced. Instead, an Autumn Budget and a Spring Statement would take their place. His goal was clear—reduce the near-constant tax changes caused by having two major fiscal events each year.
The impact of this change
At first, the shift was welcomed by organisations like the Institute for Government. However, external events disrupted the plan, including general elections and the Covid-19 pandemic. Since 2017, there have been as many Spring Budgets as Autumn Budgets. In 2022, only one fiscal event took place – a controversial mini-Budget by Kwasi Kwarteng.
In her March 2024 Mais Lecture, Rachel Reeves signalled her intent to return to Hammond’s schedule. If she becomes Chancellor, she plans to hold just one major fiscal event per year – an Autumn Budget.
The role of the Spring Statement
Despite this shift, some form of a Spring Statement remains necessary. The Office of Budget Responsibility (OBR) must publish two economic reports per fiscal year. To align with this, the Treasury confirmed that the 2025 “Spring Forecast” would be presented in Parliament on 26th March. On the same day, the OBR will release its economic and fiscal outlook.
what to expect in march
The Treasury’s press release did not completely rule out tax changes in March. However, it stated, “The Chancellor remains committed to one major fiscal event a year to give families and businesses stability and certainty on upcoming tax and spending changes.” This statement suggests that no new tax measures will be announced on 26th March. Even if the OBR’s figures disappoint, tax policy is unlikely to change.
Meanwhile, government borrowing costs increased in early 2024. As a result, speculation has emerged that spending cuts could be introduced.
Tax planning becomes more critical
The absence of tax changes in spring provides clarity for those preparing for the new tax year. Last autumn’s Budget introduced £40 billion in tax increases. This makes effective tax planning even more important as we move toward 2025.
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