In Britain, the autumn financial statement by the chancellor of the exchequer is a mini-budget, where the government announces some important changes in economic policy in December, before fully outlining the budget detail in March. Here, the Government may now follow the United Kingdom example: it is considering introducing a spring financial statement next April. The 2016 budget, which follows in October, will take full effect from January 2016. In Britain, the gap between the initial financial statement and full implementation of budget measures is short – just four months. But for the Government, the gap between any spring statement of policy intent and budget measures taking full effect will be twice as long – eight months.
Does the Government need to make a spring statement at all, given that in April it will be submitting its annual Stability Programme Update to the European Commission? This update takes full account of the economic and fiscal outlook for the year. The programme is reviewed by the commission, and is later assessed by the Irish Fiscal Advisory Council.
Government ministers seek to justify the introduction of a spring statement on political rather than on economic grounds. Any tax and welfare changes announced in the October budget will be effective from the following January. And this, some ministers feel, leaves too little time to convince the public of the merits of any such concessions before a general election deadline in spring, 2016. But that is hardly adequate grounds for introducing such a change at this time. For a spring statement introduced next April risks being seen as the early start to a long election campaign: one in which the Government raises public expectations of what it can later deliver, in an attempt to win favour with the voters.
Auction politics is something the economy cannot afford. The Government’s economic record speaks for itself. What is more in question is the ability of its ministers to sell its own achievements – more recognised abroad than at home – to a sceptical electorate.
