A list of Budget debates and Finance bills since 1968 showing Chancellors and length of speechJump to full report >>
The Budget is the major financial and economic report made each year by the Chancellor of the Exchequer. The word “budget” derives from the term “bougette” – a wallet in which either documents or money could be kept. Chancellors use the Budget statement to update Parliament and the nation on the state of the economy, on the public finances and on progress against the Government's economic objectives. Usually Chancellors will reserve any announcements on measures to amend the tax system for the annual Budget, and the speech often includes details of Government spending and borrowing for future years. The tax measures set out in the Budget are implemented in the Finance Bill. There will be at least one Finance Bill each year, as income tax and corporation taxes have to be renewed by legislation annually.
As soon as the Chancellor has finished the Budget statement, proposals for tax changes may come into effect immediately. These proposals must be validated by a single motion - a Provisional Collection of Taxes motion - approved after the Budget speech. In addition, within ten sitting days Parliament must approve a series of individual Ways and Means Resolutions. These resolutions are needed for each provision imposing a new tax, renewing an annual tax, increasing or widening the burden of an existing tax, or for other provisions that need to be in operation before the Finance Bill is enacted. The Finance Bill is required to give permanent legal effect to the Resolutions
Traditionally the Budget has been in March, just prior to the start of the tax year on 6 April. In September 2010 the Government announced that future parliamentary sessions would run from spring to spring as part of its wider reform to establish fixed-term Parliaments. To ensure that the Provisional Collection of Taxes Act (PCTA) 1968 continues to have the same practical effect, the Act was amended by s88 of the Fianance Act 2011. c.11 to allow Budget resolutions to remain in effect after prorogation, subject to the Bill on which these resolutions is based being carried over and reintroduced within a set time period. This is discussed in more detail in section four of the Commons briefing: The Budget and the annual Finance Bill.
Commons Briefing papers SN02271
Author: Sarah Priddy