UK’s Reeves says she wants only one full budget assessment a year

LONDON: British finance minister Rachel Reeves said on Monday that she would like the country’s budget watchdog to provide just one full assessment of her fiscal plans a year rather than two as it would reduce policy uncertainty for businesses and households.

“The International Monetary Fund have said that we should move to just one major fiscal event a year, and I agree with their recommendations,” Reeves told Times Radio.

“And to be able to do that, we do need to change the way that the OBR (Office for Budget Responsibility) do their forecasting. Two full forecasts a year make it harder to have that one fiscal event.”

The IMF, in an annual report on Britain’s economy published in May, said that there was “significant pressure for frequent fiscal policy changes” even after Reeves committed last year to holding only one major annual tax and spending announcement.

Options for reform included assessing the government’s progress towards its budget rules only once a year rather than twice under the existing system, the IMF said.

Reeves said one possibility was for the OBR to publish shorter-term forecasts rather than always come up with a full set of five-year projections.

That could reduce the need to regularly make changes to tax and spending policies in order for the government to remain on track to meet its budget targets.

“What I’m trying to achieve here is stability for families, but also stability for businesses,” Reeves told Times Radio.

“Because one criticism that we get…which I think was a fair criticism for the previous government, was that policy changed all the time, and it was difficult to keep up. I think there was something like more than 20 changes to corporation tax in the last parliament.”