After reading this essay you will learn about the budgetary procedure followed in England.
In England the work of preparing the budget is begun in the autumn of each year when a circular from the Treasury is sent to all departments asking them to furnish figures concerning their probable requirements for the ensuing financial year.
When the estimates are all received by the treasury, it checks them with the figures of the preceding year. The treasury officials may meet the officials of the various departments with a view to getting reductions by mutual agreement. Meanwhile the departments prepare the estimates of revenue.
Generally, the estimates of expenditure exceed the estimates of revenue and so the need is either to reduce the expenditure or else to find some new sources of revenue. The Chancellor of Exchequer makes up his mind as to the wisest course and then lays the budget before the cabinet.
The cabinet after hearing him on the main provisions of the budget and after a full discussion of the various problems involved, gives the budget a final shape and authorizes the chancellor to lay the budget before the parliament.
The Chancellor of Exchequer presents the estimate of expenditure to the House of Commons sometime in the second or third week of February. A little later, he makes an elaborate speech to the House sitting in the Committee of the Whole in which he reviews the finances of the past year and enunciates the policy for the next year.
After the estimates of expenditure have been presented to the House, it converts itself into the Committee of Supply and takes up the consideration of the estimates. These estimates are considered in separate groups termed ‘votes’ corresponding to distinct service. The votes are presented by the heads of departments individually. The ‘votes’ are debated but the debates are seldom devoted to financial matters.
These debates are general and extend to the governmental policy. The members may propose to strike out or reduce any item of expenditure, but they have no right to add or increase any amount. In practice the proposal to reduce or strike any expenditure is not carried because the ministers decline to accept a reduction.
The result is that the estimates are passed without any drastic alteration. The debates on the estimates must be concluded within twenty-six days. All ‘votes’ become subject to the closure at the expiration of the said time limit.
When providing revenue, the House sits in a Committee of the Whole House in Ways and Means.’ This committee functions throughout the same period of time as the Committee of Supply. The proposals of revenue are detailed serially and after adoption are reported to the House in the form of resolution.
After the estimates of expenditure have all been voted by the House in Supply, and the various revenue proposals have been approved by the House in Ways and Means, the whole is then embodied in a Finance Bill and Appropriation Bill.
The Finance Bill deals with the new taxes or changes in the old ones. The Appropriation Bill deals with expenditure. Both these bills, which are money bills, are put before the House and therein they pass through the usual stages of first, second and third readings.
After the House of Commons has passed both these bills, they go to the House of Lords which has no alternative but to pass them without amendment. Under the Act of 1911 if the Lords receive money bill at least one month before the end of the session, it is sent for royal assent irrespective of whether the Lords concur with it or not.