Publications / Guides

How does Parliament authorise the Government's taxation plans? A procedural guide to the Budget process

The Chancellor Jeremy Hunt walks outside Downing Street with the Budget box. ©HM Treasury / Zara Farrar
The Chancellor Jeremy Hunt walks outside Downing Street with the Budget box. ©HM Treasury / Zara Farrar

In order to raise income, the government needs to obtain approval from Parliament for its taxation plans. The Budget is the means by which the House of Commons considers the government’s plans to impose 'charges on the people' and its assessment of the wider state of the economy.

The Budget is usually held on a Wednesday after Prime Minister’s Questions and is usually followed by four days of debate in the House of Commons. The Budget process has four key parliamentary stages: the financial statement; the Budget debate; the Budget resolutions and the Finance Bill.

Tulip Siddique MP in the House of Commons Chamber, 8 June 2022. ©UK Parliament / Jessica Taylor

How do MPs scrutinise the Budget?

The Financial Statement is usually followed by four days of debate on the Budget. The debate enables MPs to consider the government’s proposals for charges, the role that these charges play in the context of the tax system as a whole, and whether the revenue raised is sufficient given the government’s expenditure plans.

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

How do MPs approve the Budget?

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.

Shadow Chancellor Rachel Reeves MP speaking in the House of Commons Chamber, 23 March 2022. ©UK Parliament / Jessica Taylor

Can MPs amend the Budget?

MPs can propose amendments only to the first Budget motion. Any of the other Budget motions can be voted upon but they cannot be amended. Under Standing Order No. 51(3) where there is a series of motions the second and subsequent motions have to be put ‘forthwith’ – that is, without amendment or debate.

What is the Finance Bill?

The government’s taxation plans, as set out in the Budget, require statutory (that is, legislative) authority. The Finance Bill provides this. Once the Budget resolutions have been agreed by the House of Commons at the end of the Budget debate, these ‘charging’ or ‘founding’ resolutions form the basis of the Finance Bill.

Prime Minister Rishi Sunak MP in the House of Commons Chamber, 1 March 2023. ©UK Parliament / Jessica Taylor

What principles and rules govern the Budget process?

Parliament’s scrutiny and authorisation of the government’s taxation plans is fundamental to the political system. As the public’s representative body, it is Parliament’s responsibility to hold government to account – between elections – for the money it raises and spends.

8:15pm, 11 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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