Note (Back) — Chapter VI

143. The Budget.—As soon as practicable after the close of the fiscal year the House, resolved for the purpose into Committee of Ways and Means, receives from the Chancellor of the Exchequer his Budget, or annual statement of accounts. The statement comprises regularly three parts: a review of revenue and expenditure during the year just closed, a provisional balance-sheet for the year to come, and a series of proposals for the remission, modification, or fresh imposition of taxes. Revenues, as expenditures, are in large part "permanent," yet a very considerable proportion are provided for through the medium of yearly votes. In Committee of Ways and Means the House considers the Chancellor's proposals, and after they have been reported back and embodied in a bill they are carried with the assent of the crown, though no longer necessarily of the Lords, into law. Prior to 1861 it was customary to include in the fiscal resolutions and in the bill in which they were embodied only the annual and temporary taxes, but in consequence of the Lords' rejection, in 1860, of a separate finance bill repealing the duties on paper it was made the practice to incorporate in a single bill—the so-called Finance Bill—provision for all taxes, whether temporary or permanent. In practice the House of Commons rarely refuses to approve the financial measures recommended by the Government. The chamber has no power to propose either expenditure or taxation, and the right which it possesses to refuse or to reduce the levies and the appropriations asked for is seldom used. "Financially," says Lowell, "its work is rather supervision than direction; and its real usefulness consists in securing publicity and criticism rather than in controlling expenditure."[199] The theory underlying fiscal procedure has been summed up lucidly as follows: "The Crown demands money, the Commons grant it, and the Lords assent to the grant;[200] but the Commons do not vote money unless it be required by the Crown; nor impose or augment taxes unless they be necessary for meeting the supplies which they have voted or are about to vote, and for supplying general deficiencies in the revenue. The Crown has no concern in the nature or distribution of the taxes; but the foundation of all Parliamentary taxation is its necessity for the public service as declared by the Crown through its constitutional advisers."[201]