Why we should scrap the Budget
The yearly Budget, big set-piece of British politics, encourages the very worst from the government, says Matthew Lynn.


The Budget has always been one of the big set-piece occasions of the British political calendar. The chancellor sets out his plans for tax and spending for the year, determining the fate of departments, and usually coming up with one or two headline-grabbing new policies. It defines the government’s agenda for the year and the chancellor gets his chance to shine.
Rishi Sunak’s Budget speech is scheduled for next week and there is already plenty of speculation on what it might contain. But there is something the chancellor could do that would be far better for the economy than delivering a two-hour speech to the House of Commons: just take the day off instead.
Enough already with the tax fiddles
First, we have had enough major changes to the tax and spending regime already for one year. It has been a massive 12 months for tax and fiscal policy, unprecedented outside of wartime. We have seen corporation tax pushed up to 25%, reversing 40 years of steady reductions in the levy on company profits. We have seen a whole new social charge introduced, the “health and social care levy”, which is, in effect, an extra form of national insurance. We have seen the deficit pushed up to the highest level outside of wartime, while vast new spending programmes, such as the furlough scheme that ended up costing £70bn, were launched in the blink of an eye.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It is, to put it mildly, a lot. It is hard to see that the Budget really has anything else to accomplish. We have seen that the political system is capable of responding quickly as the economy changes, and policy changes with it. Is it really necessary to wait until the chancellor’s big Budget speech to make any reforms?
Second, the Budget encourages the very worst form of government. Every chancellor feels he needs to do something to grab some headlines: an extra tax on petrol lawn mowers for generating greenhouse gases; a levy on tanning salons because they might be bad for our skin; a subsidy for anyone developing electric planes.
A Budget can very quickly turn into an hour of high-profile virtue-signalling with the chancellor dishing out rewards and punishments according to whatever fad is dominating the headlines that week; it makes for easy politics and guarantees some positive coverage. The trouble is, it clutters up the tax system with endless fiddly tax rules. It is very easy to introduce a subsidy for something, but once it is in place it is very difficult to repeal it. The result is a tax system so complex even expert accountants can hardly understand it anymore.
Replace it with a Great Repeal Statement
True, we have made some progress. In his pomp, Gordon Brown introduced what was in effect two Budgets a year: the main one, plus the Autumn Statement, both of which came with his trademark round of fiddly gimmicks and stealth taxes that no one really noticed for a few years. Philip Hammond, who, looking back, was a far better chancellor than we realised at the time, did everyone a huge favour by finally getting rid of that abomination.
We could go further: the one thing the British tax system needs right now is less clutter. And it definitely doesn’t need yet more interference from the government and more rule changes. It would be a lot healthier if we simply left it alone for a while.
If Rishi Sunak wants to have a big day with lots of TV cameras following him around then he could try a Great Repeal Statement – a one hour speech that ripped up lots of small and fiddly taxes that hardly anyone pays any more anyway. That would be a bold signal of intent, would still generate some headlines, and would remind everyone that amid all the industrial strategies, subsidies and interventionism this was still a Conservative government.
But a full-scale Budget? We definitely don’t need another one this year. And if we scrapped it for this year, perhaps it could be quietly consigned to the history books for ever – if chancellors did a little less for a few years, the economy might even end up in better shape.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years.
He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.
-
The most likely outcome of the AI boom is a big fall
Opinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth
-
What we can learn from Britain’s "Dashing Dozen" stocks
Stocks that consistently outperform the market are clearly doing something right. What can we learn from the UK's top performers and which ones are still buys?
-
The most likely outcome of the AI boom is a big fall
Opinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth
-
The rise of Robin Zeng: China’s billionaire battery king
Robin Zeng, a pioneer in EV batteries, is vying with Li Ka-shing for the title of Hong Kong’s richest person. He is typical of a new kind of tycoon in China
-
How retail investors can gain exposure to Lloyd’s of London
It’s hard for retail investors to get in on the action at Lloyd’s of London. Here are some of the ways to gain exposure
-
The goal of business is not profit, but virtue
Opinion Serve your customers well, and the profits will follow, according to a new book. It rarely works the other way around, says Stuart Watkins
-
Earnings estimates are a rigged game – especially in the US
The number of US stocks beating earnings estimates tells us only that guidance has deliberately been set too low
-
Why is Britain's industrial base crumbling?
Opinion More and more factories in the UK are closing, and the government doesn’t seem to care. What’s going on?
-
Scotland's former first minister Nicola Sturgeon leaves behind a toxic legacy
On the left, Nicola Sturgeon is seen as something of a political hero. That makes sense… but only if you exclude her actual record in office
-
It’s time to start backing Britain – the best investments to buy now
The UK stock market has been languishing for decades. But the tide is turning and smart investors should buy in now