The King’s Speech on 17 July 2024 marked the start of the first Parliamentary session of the new UK Government. It announced that many Bills would be introduced in the session, not all of which will affect the payroll profession.
One Bill that was swiftly introduced by the Chancellor of the Exchequer Rachel Reeves was the Budget Responsibility Bill. This received Royal Assent on 10 September 2024. Operationally, this will not affect bookkeepers. However, it is an important one for the UK Government to have progressed through the Parliamentary stages so quickly.
The Office for Budget Responsibility (OBR) must provide ‘fiscal and economic forecasts’ twice per year with one alongside the Budget. The forecast is primarily an independent assessment of whether the measures will or will not achieve the UK Government’s fiscal mandate. What the Act now mandates is that every ‘fiscally significant measure’ announced in the House of Commons will have to be accompanied by an OBR report, even if this is not formally requested.
The intention, according to the 23 July 2024 Research Briefing, is that this will prevent UK Government’s from making announcements such as the September 2022 Growth Plan where the OBR was not asked to produce a forecast or scrutinise the measures within it.
For Bookkeepers
The Budget Responsibility Act 2024 will not affect us operationally.
However, for UK Governments, it is now an obligation on the OBR to produce a report, except where the fiscal announcement relates to measures seeking to address tax avoidance. Therefore, the Act means that the market instability caused by the lack of an independent forecast in 2022 cannot happen again.
This is important for everyone.
