PURELY POLITICAL: Budget unravelling?
Budgets are the making, but more usually the breaking of political reputations. – BBC, Tuesday, March 9, 1999.
In a segment on the 1999 Budget, the revered British broadcaster also made the point that some Chancellors of the Exchequer (as their finance ministers are formally known) were “often more remembered for their famous mistakes than for the humdrum success of a Budget, however well judged”.
And it cited some of the more famous blunders in the 1900s that seriously damaged the reputation of the chancellor who proposed them, perhaps the most infamous of which was the so-called “Leaky Budget (1947)”.
The BEEB recalled that in November 1947, Labour Chancellor Hugh Dalton was forced to resign after introducing a deflationary Budget to defend sterling.
“The immediate cause of his resignation was that Dalton had leaked details of the Budget to a journalist, John Carvel, who published them in a London newspaper, just minutes before the chancellor announced them to the House of Commons,” it said. “By today’s standards the leak was fairly modest as very few copies of the paper had actually been distributed before the Budget was announced. But Mr Dalton immediately offered his resignation, which apparently was accepted with great reluctance by the prime minister.
“According to his biographer Ben Pimlott, Hugh Dalton’s resignation was as much the result of his frustration and physical exhaustion over the deteriorating state of the economy as the immediate circumstances of the leak.”
As in Britain, from which Barbados has copied much of its governance and parliamentary processes, there has been a traditional silence surrounding the details of the annual Budget. In Britain, that secrecy has come under threat recently with the advent of a coalition government with multiple parties involved.
What has not changed there, or here, however, is the principle of cabinet collective responsibility which, according to some, is a constitutional convention in governments using the Westminster system that members of the cabinet must publicly support all governmental decisions made in cabinet, even if they do not privately agree with them.
I do not know about you, dear reader, but it seems to me that since the presentation of the 2013 Budget on August 13, almost every week since then an issue had arisen with its contents, and the Cabinet, which was said to have unanimously agreed, seems to be stepping away from specific items, even Prime Minister Freundel Stuart himself.
My recollection is that during the Budget debate, one Cabinet minister suggested there had been some disagreement – at the very least – on the University of the West Indies (UWI) tuition fee issue.
And the Prime Minister himself later used the party’s 58th annual conference to make a statement of unity within its ranks on the Budget, insisting that all of his ministers were committed to ensuring that the policies announced were implemented. According to Press reports, Stuart said the Cabinet had unanimously agreed on the policies to address the problems of high debt, a large fiscal deficit, balance of payments challenge and a decline in foreign reserves.
“Cabinet came to the conclusion after some hard bargaining that we had no choice but to pursue certain courses of action,” he said. “Everybody in the Cabinet room was on board in respect of what we have determined we have to do.”
But the ink had hardly dried on the Budget document before confusion over the policies and details surfaced, and on the controversial UWI tuition fee, Stuart himself indicated that it had not been written in stone and he was willing to look at a better, more viable solution. It was a position he repeated this past week in Canada when he said he would be willing to sit down with students and a mediator not only on the fees but on a solution to the island’s financial troubles.
Government’s lack of clarity over its Budget issues and direction was encapsulated by businessman Lalu Vaswani last Thursday when he said the private sector was “surprised by the lack of timely clarifications” to several policy changes announced.
“I refer to the acknowledged error in the tax rate of the new municipal tax (first pointed out by Minister Donville Inniss), as well as questions of interpretations of the also newly implemented consolidation tax. Questions have also been raised about the Inland Revenue’s legal authority to implement taxation policies which are at variance with what was enunciated in the Budgetary proposals.”
British Chancellor George Osborne has publicly stated that coalition budgets were about negotiation and the days of total secrecy were over. He made no mention of the principle of collective responsibility.
And if the gulf between Stuart and Inniss over economic citizenship is an indicator, maybe very soon we are going to see some public negotiations between a Prime Minister and his Cabinet colleagues, not only over the annual Budget, but also about innovative revenue generating initiatives.
• Albert Brandford is an independent political correspondent.