MPs agree a Provisional Collection of Taxes motion which provides provisional authority for changes in taxes and duties that the government proposes should take effect on Budget day or soon after. Dozens of Ways and Means resolutions are also required to provide parliamentary authority for individual tax measures.
This guide is part of the collection: How does Parliament authorise the Government's taxation plans? A procedural guide to the Budget process
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At the end of the Financial Statement, the Chancellor moves two motions:
a Provisional Collection of Taxes motion, to be agreed without debate; and
the first Ways and Means motion. Formally, this is the motion on which the Budget debate takes place.
These motions are moved without advance notice of the text being given to the House. This is contrary to the normal procedure that applies to a motion for debate. Generally, the House of Commons must receive notice of a motion before it can be moved by a Minister.
In practice, this usually means that a motion must be tabled at the latest by the close of business on the previous sitting day, so that the text of the motion can appear on the Order Paper for the next sitting day. However, Standing Order No. 51 exempts Provisional Collection of Taxes and Ways and Means motions from this notice requirement.
This is to avoid the risks – such as market manipulation or stockpiling of goods – that would arise if people were given advance notice of changes to duties such as those that might be levied on alcohol, fuel and tobacco.
The Finance Act provides the necessary statutory authority for the changes in taxes and duties that the government proposes in the Budget – but passing an Act of Parliament takes time. Before the Act can be passed, provisional authority must be granted for those changes in taxes and duties that the government proposes should take effect on Budget day or soon after (particularly where market risks attach to any delay).
Provisional authorisation is achieved via a motion under section 1 or section 5 of the Provisional Collection of Taxes Act 1968 (as amended by the Finance Act 2011).
Immediately after the Chancellor’s Statement, MPs are asked to agree, without debate, a single motion providing for changes to pre-existing taxes under section 5 of the Provisional Collection of Taxes Act 1968. This gives provisional statutory effect, as of midnight, to tax changes on certain items detailed in the motion.
If the government, at the end of the four-day debate, chose not to move the motion(s) which is given temporary effect from Budget day by this Provisional Collection of Taxes resolution, or if the motion(s) was rejected by the House, then the provisional cover for the tax changes would not be immediately affected. However, if after 10 sitting days the House had not passed the motion(s), then the provisional cover for the tax changes would expire.
The suite of Budget motions to be considered at the end of the four-day debate includes motions tabled under section 1 of the Provisional Collection of Taxes Act 1968 to take effect soon after the conclusion of the debate.
If supported by the House, these too will come into provisional effect pending passage of the Finance Bill. These section 1 Provisional Collection of Taxes motions are identifiable by a declaratory provision in each one that: “..it is declared expedient and in the public interest…”
A Provisional Collection of Taxes resolution remains valid for seven months. However, it is invalidated if the Second Reading of the Finance Bill does not take place within 30 sitting days. (If a Bill other than the Finance Bill is to be used for the purpose of varying the tax, the same rule applies to this Bill as well.) If the relevant Second Reading failed to take place before the deadline, the government would have to return all taxes raised under the temporary authority provided by the resolution.
The Provisional Collection of Taxes resolution can also be invalidated if:
Parliament is dissolved;
an Act is passed changing the relevant tax provisions, which supersedes the content of the resolution; or
a subsequent motion is passed rejecting the resolution.
Separate Ways and Means resolutions are required to provide parliamentary authority for most tax-raising measures that might be set out in the Budget to:
impose a new tax;
renew an annual tax;
renew a tax with an imminent expiry date;
increase the rate of an existing tax;
widen the scope of an existing tax; or
withdraw or restrict tax relief.
Dozens of Ways and Means resolutions – sometimes as many as 80 or more – may therefore be required to implement a Budget. These ‘founding’ resolutions for the later Finance Bill must be agreed by the House of Commons within 10 sitting days of the Budget statement. They are made publicly available at the end of the Chancellor’s statement.
Under Standing Order No. 51, only the first Ways and Means motion is debated and can be amended. This is the motion which is moved by the Chancellor at the end of the Budget statement.
On all the other Ways and Means motions, the question as to whether the House agrees is put ‘forthwith’. That is, there is no debate and the motion cannot be amended. However, the organisation of the budget debate into thematic policy areas, coupled with the latitude typically granted by the Chair, ensures that the debate broadly covers the content of all the motions.
Additional motions related to the Budget, which are not Ways and Means motions, may be moved after the Ways and Means motions are agreed, depending on the government’s requirements. For example a Money motion may be needed to authorise the expenditure of public money.
At the end of the fourth and final day of debate on the Budget, the Speaker puts the question on the first Ways and Means motion (that is, the Speaker asks MPs if they agree with the motion).
Proceedings take place in the normal way for a decision on a motion:
if the Speaker selects an amendment, the question on the amendment is put first;
if the amendment passes, then the question is put on the motion as amended;
if the amendment does not pass, then the question is put on the original, unamended, motion.
After the first Ways and Means motion has been dealt with, the questions on the remaining such motions are put ‘forthwith’ without further debate.
As there may be dozens of motions, the Chair (usually the Deputy Speaker as Chair of Ways and Means) may take a number of consecutive motions together to save time (for example, “The Question is, that motions 42-55 be agreed to.”).
The House will generally divide (that is, vote) only a few times and only on the most controversial proposals. On 1 November 2018, for example, it divided on three out of 80 motions. (Unusually, on 17 March 2020, by agreement between the parties, there were no divisions on the 63 Ways and Means motions due to Coronavirus-related concerns and a desire to avoid MPs crowding into voting lobbies).
Once the Ways and Means motions are agreed (and thus become resolutions), the government can immediately present the Finance Bill to the House, founded on those resolutions.
As is the case for other Bills, the First Reading of the Finance Bill is a formality. The Bill’s long title is read out and a day for its Second Reading is named. This day is often given as ‘tomorrow’. However, this does not mean that the Second Reading will actually take place the following day – ‘tomorrow’ is a procedural device to list the Bill on the Future Business of the House. In practice, the Second Reading of the Finance Bill may not be held until some weeks after the conclusion of the Budget debate.
08:06 am, 14 March 2023
Hansard Society (2022), How does Parliament authorise the Government's taxation plans? A procedural guide to the Budget process, (Hansard Society: London)
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