HM Treasury
Template:Short description Template:Use dmy dates Template:Leadcite comment Template:Infobox organization His Majesty's Treasury (HM Treasury or the Treasury) is the United Kingdom's economic and finance ministry. It maintains control over public spending, sets economic policy, and works to deliver economic growth. It is led by the Chancellor of the Exchequer, and is located in London. The Treasury traces its origins to the medieval Exchequer. It is one of the smallest departments by staff count, but widely considered the most powerful.<ref>Template:Cite web</ref><ref>Template:Cite news</ref>
History
Anglo-Saxon governments were skilled in collecting, auditing, and managing their cash revenues. However, there is no evidence of a distinct administrative department. Royal treasures were kept at Winchester, but the crown's wealth was likely kept more flexibly.<ref name=":1">Template:Cite book</ref> For example, Edward the Confessor kept some treasure at his palace in Westminster.<ref>Template:Cite book</ref>
The first signs of an administrative department arrive with the Normans. Following the 1066 Norman Conquest, the Exchequer was an event held twice a year, at Easter and Michaelmas. The purpose of these meetings was to make judgements about the collection and usage of the royal treasury. These events were separate from the royal treasury, which stored the royal wealth.<ref>Template:Cite book</ref><ref>Template:Cite book</ref> The earliest known official of the treasury was Henry the Treasurer. It is likely that Henry the Treasurer partook in the Exchequer events.<ref>Template:Cite book</ref><ref>Template:Cite journal; Open Domesday Retrieved 2012-06-25; HM Treasury:History</ref><ref>Template:Cite book</ref> The name Exchequer came from the chequered cloth that was spread over the counting‐table at these events.<ref>Template:Cite book</ref><ref>Template:Cite book</ref><ref>Template:Cite book</ref> By 1154, the Exchequer was a fully-fledged administrative institution based in Westminster.<ref>Template:Cite book</ref> The royal treasury became part of the Lower Exchequer, whilst the twice-yearly meetings formed the Upper Exchequer.<ref name=":1" />
By the 1400s, the significance of the Exchequer was undermined. Much of its administrative and treasury functions were handled personally by Edward IV.<ref>Template:Cite book</ref> This trend continued. Henry VII would personally check, sign, and draft the accounts of the Crown.<ref>Template:Cite book</ref> By the early 1500s, this situation was reversed by Thomas Cromwell. Authority was restored to the Exchequer, and four new government departments were created to handle the state finances. In 1554, these new departments were merged with the Exchequer.<ref>Template:Cite book</ref> However by the late 1500s, under James I of England, debts mounted and the treasury reserves began to dwindle.<ref>Template:Cite book</ref> In an attempt to control the spiralling debt, Treasurer Lionel Cranfield briefly imposed strict control over spending on the Crown. This would be the first attempt by a Treasurer to impose control over the sovereign. He was later impeached under the guise of corruption.<ref name=":2">Template:Cite book</ref>
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In the 1640s, the English Civil War broke out. The Exchequer collapsed and finance fell to ad hoc Parliamentary and Royal committees. In 1654, Oliver Cromwell re-opened the Exchequer but left its medieval structure intact.<ref name=":2" /> At the 1660 Stuart Restoration, a Lord Treasurer resumed charge, but Parliament won a permanent role in the treasury. Thus, the Treasury was caught between its sovereign-court origins and Parliament's growing authority.<ref>Template:Cite book</ref> Parliament had promised King Charles II £1.2m per year. However, Charles was unable to extract such funds due to the poor financial state of the country.<ref>Template:Cite book</ref> In 1667, without consulting Parliament, Charles decided to replace the Lord Treasurer with a small board of officials. He wanted the "rougher hands of younger, more energetic men to wrest control of the country's finances."<ref>Template:Cite book</ref> The Treasury would now be run not by a single person, but by a board. One notable member was Sir George Downing, who brought lessons from Dutch finance to England.<ref>Template:Cite book</ref><ref name="Sir George Downing">Template:Cite web</ref> Although England still lagged behind the Dutch in trade, its economy was growing rapidly. The board ended the practice of tax farming (selling the right to tax citizens to third parties) in favour of collecting the taxes directly. This led to an increase in tax revenue and an expansion of the Treasury's staff.<ref>Template:Cite book</ref>
However, due to heavy naval spending in the Anglo–Dutch wars, government debt ballooned. King Charles II halted all debt repayments, in what would become known as the Stop of the Exchequer. This substantially undermined trust in the government's finances. In response, Parliament began tightly controlling how government money was spent.<ref>Template:Cite book</ref> That control vanished in 1685, when Parliament gave James II nearly £2 million a year with no restrictions. After the Glorious Revolution of 1688, the new king, William III, was deliberately kept short of permanent income so that he remained dependent on Parliament. The revolution also led to the development of new financial tools like the Bank of England, the Land Tax, and government bonds.<ref>Template:Cite book</ref> The new government made reforms to the Treasury too. Henry Guy was a Member of Parliament as well as a Treasury Secretary. However, he was later disgraced for having taken a bribe. New rules were created to prevent all office-holders from sitting in the Commons. This effectively created a divorce between civil servants and the Commons.<ref>Template:Cite book</ref> By Queen Anne's death in 1714, the Treasury operated independently from the monarch, and could shape its own direction.<ref>Template:Cite book</ref>
At the beginning of the 1700s, the Treasury held power in some areas but lacked it in others. It held significant power in tax collection. 17,000 civil servants gathered taxes for the government. Parliament would allow the Treasury to handle day-to-day management of tax collection. However, the Treasury rarely questioned government spending decisions.<ref>Template:Cite book</ref> In 1736, a new Treasury building was commissioned. The new building would be physically connected to No. 10 via passageways. The Treasury was now firmly under the control of Parliament.<ref>Template:Cite book</ref>
The term budget emerged during this period. It originally meant a small pouch in French (bougette). In a pamphlet in 1733, Sir Robert Walpole is depicted satirically as a quack doctor opening his bag (or bougette) of tricks. The joke stuck, and the term shifted from meaning the container to meaning the financial plan itself.<ref>Template:Cite book</ref><ref>Template:Cite book</ref>
The power of the Treasury would increase in the late 1700s. The Civil List was the main way Parliament funded the monarch's household budget. By the late 1770s, King George III had accumulated considerable debt. By 1782, Parliament increased the Civil List to £900,000. For the first time, it also demanded detailed scrutiny of Civil List accounts. This was a significant change. The Sovereign's own expenditure would now be scrutinised by the Treasury.<ref>Template:Cite book</ref>
In 1776, the American Declaration of Independence was signed. Some blame the Treasury for the rebellion.<ref>Template:Cite book</ref> At the time, the Treasury had more officers in America than any other department.<ref>Template:Cite book</ref> Additionally, after the Seven Years' War in Europe, government debt had soared. This pushed the Treasury to tighten customs, change pay incentives, and lower duties to curb smuggling. In 1767, Chancellor Charles Townshend, introduced the tax legislation which would ultimately ignite the rebellion. However, others emphasise that the Treasury acted alongside the Board of Trade, the Privy Council, Parliament and other government bodies.<ref>Template:Cite book</ref>
In the 1800s, the Treasury became the government's hard brake. The Treasury relied on the 'power of the purse' to enforce Gladstone's economic restraint. This led to constant clashes with the other departments.<ref>Template:Cite book</ref> The Treasury's control would deepen when the Exchequers of the Great Britain and Ireland were consolidated in 1817.<ref name="CA1816">Template:Cite act</ref><ref>Template:Cite book</ref> Parliament had complete control of government finances, and the Treasury emerged as the centre of financial discipline.<ref>Template:Cite book</ref>
In the 1850s, a shift in the staffing of the Treasury occurred.<ref>Template:Cite book</ref> The Northcote–Trevelyan Report (1854) set the stage for this change. Recruitment for the Treasury was reorganised around merit and fixed pay. The Treasury shifted from hiring through royal connections to a small, selective elite. Stricter exams raised entry standards. However, public school connections still mattered. By 1914, public school and Oxbridge men dominated the ranks of the Treasury.<ref>Template:Cite book</ref>
During the First World War, the Treasury attempted to stabilise finances. It closed the Stock Exchange, paused many payments, and issued new paper money like the Bradbury note.<ref name="treasurynotes1">Template:Cite web</ref> Ideologically, the Treasury shifted from Gladstonian prudence to Keynesian management of jobs and prices.<ref>Template:Cite book</ref>
In the Second World War, Blitz bombing damaged the Treasury building. This led the Treasury to move to 1 Horse Guards Road, where it remains to this day.<ref name="history">HM Treasury: About GOGGS</ref> For the first time, the 1941 Budget used national accounts. National accounts track the entire economy's income and output. The Treasury now had a complete picture of the economy. In 1947, Sir Stafford Cripps moved economic planning into the Treasury. The Treasury now managed the budget, national accounts, and the pound.<ref>Template:Cite book</ref><ref>Template:Cite journal</ref>
Between 1947 and 1968, the Treasury would see a shrinking of power. Parliamentary reviews from 1957 to 1958 resulted in the Plowden Report.<ref>Template:Cite book</ref> This report encouraged more delegation to departments. Another report in 1968 criticised the Treasury's role as being too broad. The Treasury would hand over some functions to a newly created Civil Service Department.<ref>Template:Cite book</ref>
In 2022, the Permanent Secretary, Sir Tom Scholar, was sacked by Chancellor Kwasi Kwarteng and Prime Minister Liz Truss. Contemporary reporting described it as unprecedented in Treasury history.<ref>Template:Cite web</ref><ref>Template:Cite news</ref>
Leadership
| Minister | Portrait | Office | Portfolio |
|---|---|---|---|
| Sir Keir Starmer | .jpg)
|
First Lord of the Treasury | Formal head of the Treasury, concurrently serves as the Prime Minister.<ref>Template:Cite web</ref> |
| Rachel Reeves | _(cropped).jpg)
|
Chancellor of the Exchequer | Overall responsibility for the Treasury.<ref>Template:Cite web</ref> |
| James Murray | 
|
Chief Secretary to the Treasury | Responsible for public expenditure, including spending reviews.<ref>Template:Cite web</ref> |
| Lord Livermore | .jpg)
|
Financial Secretary to the Treasury | Leads the government's growth agenda and oversees core Treasury business.<ref>Template:Cite web</ref> |
| Dan Tomlinson | 
|
Exchequer Secretary to the Treasury | Responsible for tax policy and administration, customs/VAT, and oversight of HMRC.<ref>Template:Cite web</ref> |
| Lord Stockwood | 
|
Minister of State for Investment | Responsible for Office for Investment, investor relations, investment events, investment delivery, life sciences and GREAT Board. Joint with DBT.<ref>Template:Cite web</ref> |
| Lucy Rigby | 
|
Economic Secretary to the Treasury | Responsible for financial services, debt reserves and managements, financial sanctions, economic crime, and the Treasury's interest in Overseas Territories and Crown Dependencies issues.<ref>Template:Cite web</ref> |
| Torsten Bell | 
|
Parliamentary Secretary for the TreasuryTemplate:Efn | Supporting the Treasury's role across government and Treasury ministers in their duties.<ref name=":3">Template:Cite web</ref> |
| Jonathan Reynolds | .jpg)
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Parliamentary Secretary to the TreasuryTemplate:Efn | Government Chief Whip, though formally a junior minister in the Treasury.<ref name=":3" /> |
Civil Servants
From October 2022, the Permanent Secretary to the Treasury is James Bowler. There are two Second Permanent Secretaries: Beth Russell and Jim O'Neill.<ref>Template:Cite web</ref>
Functions
HM Treasury is the United Kingdom's economic and finance ministry. It manages the public finances and leads the government's economic strategy, with responsibility for fiscal policy (including the Budget and tax policy) and for controlling public expenditure across departments. It allocates resources through Spending Reviews and sets departmental budgets to deliver ministers' priorities and value for money. It also sets the strategic framework for the tax and customs system and works with HM Revenue & Customs on policy design and delivery.<ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref>
In macroeconomic management, the Treasury sets the fiscal framework and coordinates fiscal policy with the Bank of England's operationally independent monetary policy. The government's fiscal rules and the role of the Office for Budget Responsibility (OBR) provides independent forecasts that accompany the Budget and assess performance against the rules.<ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite web</ref>
The Treasury also leads policy for the UK's financial services framework and legislation, while specialist regulators supervise firms and markets. In particular, HM Treasury is responsible for financial services policy and for taking the relevant legislation through Parliament; prudential and conduct supervision is carried out by the Prudential Regulation Authority and the Financial Conduct Authority within the statutory framework (notably the Financial Services and Markets Act 2000).<ref>Template:Cite web</ref><ref>Template:Cite web</ref>
As the government's central finance ministry, the Treasury works across Whitehall to ensure policies are affordable, consistent with the fiscal framework and deliverable within spending limits. Public spending plans and tax measures are adjusted at fiscal events (such as the annual Budget) in light of the economic outlook, Parliamentary scrutiny and statutory rules. The Treasury has additional offices in Darlington, Edinburgh and Norwich.<ref>Template:Cite web</ref><ref>Template:Cite web</ref>
See also
- Budget of the United Kingdom
- Economy of the United Kingdom
- Lord High Treasurer
- Chancellor of the Exchequer
References
Template:HM Treasury Template:Ministers at HM Treasury Template:Economy of the United Kingdom Template:Departments of the United Kingdom Government Template:Authority control