Book Description

The Treasury should re-establish the annual Budget as the main focus of fiscal and economic policy making. The Autumn Statement is not, nor should it be, a second Budget. An additional budget can create uncertainty and carries an economic cost. Treasury and business managers also need to ensure that there is adequate Parliamentary time to allow proper scrutiny of the Finance Bill. About half of general government expenditure is to be protected from the new spending cuts but the complete protection of ring-fenced departmental budgets will be difficult to sustain while other departments are substantially affected. The Committee also intends to question the future Governor of the Bank of England, Dr Mark Carney, on possible alternatives to the inflation targeting that currently underpins the work of the Monetary Policy Committee of the Bank. The Treasury and to some extent the Bank were at fault for failing to coordinate the announcement of the Asset Purchase Facility transfer with that of the November MPC press release. It is vital that the MPC fulfils its duty to demonstrate its independence. There is concern at reports that the Funding for Lending Scheme may be biased in favouring lending for mortgages rather than lending to SMEs. The sums expected from the sale of the 4G spectrum and Swiss tax repatriation represent the majority of the additional receipts the Treasury intends to offset against the tax reductions and investment but both are uncertain. The Chancellor must also use the 2013 Budget to set out a clearer strategy for fuel duty over at least the medium term