In a few days time, the Chancellor of the Exchequer will stand up to make his first Budget speech. He has slightly less money than he thought he had, but he will be consoled by the thought that he now owns one more bank into which to put it.
His budget will be half as difficult as the one in which I was involved. In those days, we dealt with income and expenditure on one day – as indeed a Budget should. The Comprehensive Spending Review and the Budget came to a fiscal climax at the end of November, with income and expenditure dealt with together. Subsequently, it was decided this was all too difficult, and the exercise has been split into two.
I can shed some light as to why logic was abandoned. The Treasury is full of economists. (During one argument I had with them, I remember being told “Minister, what you say may well have worked in practice, but it doesn’t work in theory.”) The Treasury economists discovered that, when its two most important processes, lasting six months, each came to fruition on the same day, they were not using scarce intellectual resources to best effect throughout the year. . Far better to split the process into two component parts, spend six months on each and work on them consecutively. This would smooth out the peaks and troughs in the internal labour market, and maximise return on the investment in their high salaries. And so it came to pass.
The job of the Financial Secretary, under either model, is to sift through the Revenue’s bright ideas for raising yet more money from the nation’s taxpayers. These are known in the trade as Budget Starters and range from the pragmatic to the dotty. Given that we were heading for an election defeat, I wanted to ensure that it wasn’t greater than necessary by weeding out the more suicidal proposals. A tax on credit card transactions fell into that category. Another proposed taxing individuals on obscure benefits in kind at work. I cancelled the newspapers that appeared in my office every day that I had no time to read, in case they ended up on my tax account. The whole process was shrouded in secrecy, and culminated in a weekend in the Chancellor’s country residence at Dorney Wood. If croquet was played, the journalists never recorded it.
Readers may feel that the Chancellor’s task is a difficult one. Spare a thought for the Financial Secretary. The Chancellor reads out a 60 minute speech, prepared over a period of weeks, and takes no interventions. The Financial Secretary then has to spend a month in Standing Committee, defending the Finance Bill line by line, jousting with 30 MP’s briefed to the gills by the country’s finest tax consultants.
At 8pm on the eve of the 1995 Budget, we learnt that, despite the Fort Knox security precautions, the whole of the Budget had been leaked to one of the tabloid papers.
There was only one thing to do; the Chancellor took the team out for a curry.