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Budget Statement

Volume 205: debated on Tuesday 10 March 1992

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them that, at the end of the Chancellor's speech, copies of the Budget resolutions will be available to hon. Members in the Vote Office.

3.31 pm

I want to begin by announcing a far-reaching reform that will affect our entire system of public finance. Each year, the Budget for this country is presented in two parts. In the autumn, the Chancellor announces the Government's spending plans for the coming financial year; and in March, he sets out the revenue measures necessary to pay for them. Many criticised this uniquely British institution. Elsewhere in the world, and indeed everywhere in the private sector, the meaning of the word "budget" is crystal clear: it is a schedule showing where the money is coming from, and where it is going to.

In my view, the current system is not only illogical, it has also had a number of highly undesirable consequences. Over the years, the separation of public expenditure from taxation and the announcement of tax proposals in isolation has intensified the pressure for special reliefs and contributed to the excessively complex tax system that we have now. The time has come for reform.

I therefore intend that next year's Budget will be the last spring Budget. From then on the annual Budget will be in December, and it will cover not just taxation but also public expenditure. The Budget in December 1993 will contain the Government's proposals for both revenues and expenditure in 1994–95. It will also include spending plans for the subsequent two years. The 1994 Finance Bill will be presented to the House in January rather than April.

I am publishing today a White Paper on the mechanics of this change. I believe that it will lead to better decisions about both taxation and spending. It will enable spending plans to be considered alongside the tax plans needed to pay for them. Above all, it will enable Government and Parliament to make more informed and rational choices between spending measures and tax changes. I hope that it will be warmly welcomed by the House.