Economic institutions in Britain

The Treasury: The Treasury is the Government Department centrally concerned with managing the national economy. Under the leadership of the Chancellor of the Exchequer, the Treasury is responsible for setting the overall framework of the Government's economic policies and for controlling public expenditure.
THE CHANCELLOR OF THE EXCHEQUER: The Treasury is one of the three most significant departments of State (together with the Foreign and Commonwealth Office and the Home Office), and so the Chancellor, the senior Treasury Minister, is a crucially important member of every Government. The Chancellor holds overall responsibility for economic and financial policy, including progress towards Economic and Monetary Union (EMU).
The central point of the financial and parliamentary year is the Chancellor's annual Budge Statement to the House of Commons. In this the Chancellor reviews the development of the economy over the past year, and sets out the Government's view of economic prospects in the short and medium term.
The Chancellor also explains the Government's monetary and fiscal policy; outlines the state of the public finances: and announces tax and other policy changes. Traditionally the Budget took place in mid-March and was followed by the Autumn Statement, which was normally presented each November. In the Autumn Statement, the Chancellor announced the level of overall Government spending for the next financial year, and also indicated the level of spending on different Government functions (such as health, education, defence).
The Autumn Statement followed an annual Public Expenditure Survey held during the previous months, in which different Government Department made the case for spending in their areas of operation.
Some years ago the Conservative Government moved the Budget to the end of November, arguing that decisions on spending and taxation should be announced simultaneously. The Labour Government elected in May 1997 held its first Budget two months later, in July.
The Government also published a Pre-Budget Report in November, which began a national debate on the major economic issues facing the country. The debate informed decisions for the Spring Budget. The new Labour Government decided to adopt the overall spending limits set by the previous government for the first two financial year of the Parliament.
As a result, the public Expenditure Survey did not take place in 1997. However, in many departments spending plans within the overall spending limits were reorganised in the light of the Government's priorities.
Soon after it took office the Government initiated a Comprehensive Spending Review (CSR). The CSR was designed to examine every item of Government spending to ensure that it contributes to the Government's objectives as effectively and efficiently as possible. The CSR reported in summer 1998, producing detailed departmental spending plans for the year up to 2001-02.
In June 1998, the Government published its first Economic and Fiscal Strategy Report, entitled Stability and Investment for the Long Term. This report set the stage for the conclusion of the CSR by setting out a fiscal strategy for the remainder of the Parliament (ie until the year 2002), launching a comprehensive investment programme, announcing planned public/private partnerships and a programme of asset sales, announcing a major reform of public expenditure planning and control, and unveiling an improved format for the public finances.
In the Economic and Fiscal Strategy Report, the Government announced that it will end the practice of Annual Expenditure Surveys. Instead, to tighten the control and improve the long-term planning of public spending, Government Departments will be set firm multi-year spending limits covering a three-year period. Within the new framework, Department will be given distinct current and capital budgets and will be expected to manage them separately. Departments will also be given much extended powers to carry budgets over from year to year.
OTHER TREASURY MINISTERS: Since 1977 a second Treasury Minister, the Chief Secretary, has also sat in the Cabinet. The Chief Secretary is responsible for the planning and control of public expenditure, for reviewing public expenditure and the pay of public-sector employees, and for ensuring that the public services give value for money. The Chief Secretary also has strategic oversight of the financial system and financial services.
There are three additional Treasury Minister, who do not sit in the Cabinet.
THEY ARE:
-- the Paymaster General: responsible for fostering economic growth: the windfall tax and issues relating to the Welfare to Work programme; competition and deregulation policy; partnership between the public and private sectors; small businesses and general accounting issues. The Paymaster General also assists the Chief Secretary on public expenditure planning and control.
-- the Financial Secretary: responsible for parliamentary financial business; the Inland Revenue (which collects most direct taxes); Customs and Excise (which collects VAT and other indirect taxes; charities; and economic aspects of the environment, including energy efficiency.
-- The Economic Secretary: responsible for Treasury involvement in the financial system and financial services; foreign exchange reserves management; debt management policy and the annual borrowing programme; the European Union budget and other European issues; international financial and monetary issues; national savings; official statistics; low pay and the minimum wage; and women's issues. The Economic Secretary also assists the Chancellor on issues linked to EMU.
IN ADDITION:
-- the Minister for Trade and Competitiveness in Europe serves as a Minister of State in both the Treasury and the Department of Trade and Industry. Responsibilities include chairing the interdepartmental taskforce on competitiveness in Europe, serving as a member of Economic and European Cabinet Committees, and undertaking ad hoc projects for the Chancellor on economic issues, including work on preparation for EMU.
THE WORK OF THE TREASURY: The main function of the Treasury is to help Ministers to formulate and implement their economic policies. This work falls into three main areas; public expenditure, finance, and advice on the economy and economic policy.
PUBLIC EXPENDITURE: Treasury officials advise Ministers about what expenditure can and should be afforded, taking account of the Government's overall objectives and the economic outlook. They also advise Ministers on the allocation of resources between the spending programmes of different Government Departments.
Treasury officials also monitor the expenditure of individual Departments throughout the year against the totals agreed by the Cabinet. By developing a detailed knowledge of the spending programmes of specific Departments, they assist Departments to plan and control their won expenditure and to improve their management of resources. Treasury officials also provide Government Departments with advice on economic and accountancy issues, financial management and procurement procedures.