The Government of England (Vol. I)

by A. Lawrence Lowell

There may also be other expenses outside the estimates, which have, by the authority vested in the Treasury, been temporarily met by advances from the Civil Contingencies Fund or the Treasury Chest Fund, or from extra receipts of the department. These do not require an immediate appropriation; but they are reported to the Committee on Public Accounts at the next regular session after the close of the financial year, and then presented to the Committee of Supply to be covered at once by an excess grant.

Before the end of March, therefore, the Committee of Supply must pass the supplementary grants for the year then coming to a close, the excess grants for the preceding year, the votes on account for the coming year, and make such progress as it can with the regular estimates for that year.

Consolidated Fund Acts.

But the committee merely passes and reports to the House resolutions in favour of those grants, and the money cannot be paid out of the Consolidated Fund without the authority of a statute. The next step is taken in the Committee of the Whole on Ways and Means, where on the motion of a minister another resolution is passed, that to make good the supply already voted, the sum required be granted out of the Consolidated Fund. This in turn must be reported to and confirmed by the House.[285:1] A bill called a Consolidated Fund Bill is then brought in to give effect to the resolution. The bill, with the separate grants annexed in a schedule, goes through the ordinary stages; but the time spent upon it is short, because its only object being to authorise the issue of money to cover the supply already voted, no amendment can be moved to reduce the amount, or change the destination, of the grants.[286:1]

The Appropriation Act.

The first Consolidated Fund Act must be passed in time to receive the royal assent before April 1. One or two more follow from time to time as the Committee of Supply makes its way slowly through the estimates.[286:2] Finally, after the whole supply for the year has been voted, the Appropriation Bill is brought in, which sums up and embodies all the grants for the services of the year, prescribes their application by means of the schedules annexed, and authorises their payment out of the Consolidated Fund. This is usually passed on the last day of the session.

The Budget.

So much for the process of getting money out of the Consolidated Fund. That of getting money into the fund goes on at the same time, but independently. It is usually early in April that the Chancellor introduces his budget in the Committee of Ways and Means. In an elaborate speech he reviews the finances of the past year, comparing the results with the estimates, and dealing with the state of trade and the national debt. He then refers to the estimates already submitted, and coming to the gist of his speech, and the part of it that is awaited with curiosity, he explains how he proposes to raise the revenue required to meet the expenditures. As he could have no right to take the floor without a motion before the House, he concludes by moving one or more of a series of resolutions containing the changes in taxation, or the continuation of temporary taxes, that he desires.

About three quarters of the revenue is derived from permanent taxes, which are rarely changed, and require no action by Parliament from year to year. But in order to adjust the income closely to expenses, certain taxes are voted for a year at a time, their rates being raised or lowered as may be required to balance the budget. For many years the only imposts so treated were the income tax and the duty on tea; one of them being regarded as a direct tax levied upon property, and the other as an indirect tax resting upon the mass of the people. Recently, however, the duties on tobacco, beer and spirits, and the corresponding excises on beer and spirits, have been increased, and the additions so made have been voted from year to year.

The budget speech of the Chancellor of the Exchequer is followed by a general discussion of the questions he has raised, and either at once, or on subsequent days, by debates and votes upon the resolutions he has brought in. The resolutions when adopted are reported to the House for ratification, but as in the case of supply, they have no legal effect until enacted in the form of a statute. Perhaps it would be more correct to say that they have no legal validity; because in order to prevent large importations made to avoid a projected increase in a duty, it is customary to prescribe in the resolution a date near at hand when the tax shall take effect, and to collect it from that date if the resolution has been agreed to by the House on report. The collection is quite unauthorised by law at the time, but it is afterward ratified by a statute which fixes the same date for the operation of the tax; and this gives the transaction complete legal validity, because Parliament has power to pass a retroactive law. If for any reason the provision for the tax fails of enactment, the duties that have been collected are, of course, refunded.