Select Committee on Treasury Second Report


Our role in scrutiny

1. The first and most important objective of the Treasury Committee is to examine and comment upon the economic policy of the Government. Scrutiny of Budgets and Pre-Budget Reports (and previously of Autumn Statements) has represented the central way in which the Committee has sought to meet this objective in successive Parliaments. Oral and written evidence has illuminated the fiscal decision-making of successive Governments; reports by the Treasury Committee have informed debate in the House of Commons and elsewhere about Government economic policy. We will continue the practice of our predecessors of examining and reporting upon Budgets and Pre-Budget Reports.

Conduct of the inquiry

2. The Chancellor of the Exchequer, the Rt Hon Gordon Brown MP, made his 2005 Pre-Budget Report to the House of Commons on Monday 5 December.[1] We held our subsequent evidence sessions within an unusually compressed timetable because of the limited availability of the Chancellor of the Exchequer due to his international commitments. We took evidence from outside experts[2] and Treasury officials on Wednesday 7 December and from the Chancellor of the Exchequer on Thursday 8 December. We also received a range of written evidence. The evidence is published with this Report. We are most grateful to all those who gave evidence to the Committee, and to Professor David Heald of the University of Sheffield for his specialist advice.

Prior announcement of the date of the Pre-Budget Report

3. In the last Parliament, our predecessors drew attention to the advantages that would arise for the House of Commons from earlier notice of the date of the Pre-Budget Report.[3] The House received 18 days' notice of the 2005 Pre-Budget Report, which is shorter than the notice periods in 2003 and 2004.[4] Mr Jon Cunliffe, Second Permanent Secretary, Macroeconomic Policy and International Finance, HM Treasury, explained the Treasury's international commitments, including those arising from the United Kingdom Presidencies of the European Union and the G7/8, which made an early announcement of the date of the 2005 Pre-Budget Report "quite difficult".[5] Although the Treasury was faced with unusual circumstances in 2005, the House of Commons is entitled to reasonable notice of the date of the Pre-Budget Report. We recommend that the Treasury should announce the date of the Pre-Budget Report at least four weeks before the statement is due to be made and, in any case where this target is not met, give an account of the reasons.

1   HC Debates, 5 December 2005, cols 605ff; Pre-Budget Report 2005, December 2005, Cm 6701 Back

2   Divided into two part-sessions, the first broadly concentrating on macro-economic issues (with Mr Ben Broadbent, Goldman Sachs, Mr Robert Chote, Institute for Fiscal Studies, Professor David Miles, Morgan Stanley, and Mr Martin Weale, National Institute for Economic and Social Research) and the second examining micro-economic issues (with Professor Colin Talbot, Manchester Business School, and Mr John Whiting, PricewaterhouseCoopers, together with Mr Chote and Mr Weale) Back

3   Treasury Committee, First Report of Session 2004-05, The 2004 Pre-Budget Report, HC 138, para 2 Back

4   Oral Evidence taken before the Treasury Sub-Committee on Wednesday 16 November 2005, HM Treasury: Departmental Report 2005, HC (2005-06) 691-i, Q 15 and note; the date of the 2003 Pre-Budget Report was announced on 13 November and the statement made on 10 December (27 days) the date of the 2004 Pre-Budget Report was announced on 11 November and the statement made on 2 December (20 days) Back

5   Q 117 Back

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Prepared 25 January 2006