Publications / Guides

How do MPs approve the Budget?

Tellers at the table of the House of Commons announcing the result of a division. ©UK Parliament/Jessica Taylor
Tellers at the table of the House of Commons announcing the result of a division. ©UK Parliament/Jessica Taylor

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.

At the end of the Financial Statement, the Chancellor moves two motions:

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)

News / Democracy is in danger, warns Theresa May - Parliament Matters podcast, Episode 35

In a powerful Churchill Attlee Lecture commemorating the Hansard Society's 80th anniversary, former Prime Minister Theresa May delivered a stark warning about the state of democracy. She expressed grave concerns about the waning trust in democratic institutions, particularly among young people.

17 May 2024
Read more

Events / The inaugural Churchill-Attlee Democracy Lecture, given by the Rt Hon Theresa May MP

To mark the Hansard Society’s 80th anniversary, we have launched the Churchill-Attlee Democracy Lecture in honour of our first members, Winston Churchill and Clement Attlee. The inaugural lecture was given by former Prime Minister the Rt Hon Theresa May MP. All proceeds from ticket sales go to our 80th Anniversary Appeal. Date & location: Tuesday 14 May 2024, 7:00-8:30pm Westminster £10 tickets are now available for an online recording of the event.

14 May 2024
Read more

News / Is the Conservative Party falling apart? - Parliament Matters podcast, Episode 34

Following the local election results, are we now in zombie Parliament territory? With no immediate general election in sight what can be achieved in Westminster before MPs finally make their rendezvous with the voters? We talk to Professor Tim Bale about defeat, defections and the internal dynamics of the Conservative Party.

10 May 2024
Read more

News / Post Office Horizon scandal: What is Parliament doing about it? - Parliament Matters podcast, Episode 33

Should Parliament simply overturn the convictions of postmasters caught up in the Post Office Horizon scandal? That’s what the Government proposes to do through the Post Office (Horizon system) Offences Bill. But quashing of convictions is normally a matter for the courts. Some MPs have misgivings about setting a constitutional precedent as well as practical concerns about how the Bill will be implemented. We talk to the Chair of the Justice Select Committee, Sir Bob Neill MP.

03 May 2024
Read more

News / Is AI set to destroy trust in elections? Tackling misinformation in politics & Parliament, with top fact checker Full Fact's Chris Morris - Parliament Matters podcast, Episode 32

The emerging role of Artificial Intelligence (AI) in shaping political discourse is a potential game changer. It has the capacity to fabricate fake interviews and manipulate images, all of which could mislead voters and disrupt the democratic process. But could it affect the results of our elections? We talk to Chris Morris, the head of factchecking organisation, Full Fact, about the threats posed by these technologies, the potential scale of misinformation in politics, and the measures politicians and political parties need to take to counteract them.

30 Apr 2024
Read more