THE TREASURY

What is the role of the Treasury?

controls levels of public spending and how it is spended

What is the role of the Chancellor?

• UK’s chief finance minister

• 2nd most important role after the PM their success defines the success of the government

• Responsible for UK’s finances and lead minister in the treasury

What are the chancellors duties?

Setting taxation levels

Setting public spending levels

Controlling public borrowing

What is the role of the budget?

• a plan to manage and control the economy.

What does the budget cover?

• The Budget outlines medium-term forecasts, a review of the government’s economic performance, government spending plans and any taxation changes. 

How is the budget delivered?

• In the form of a speech made by the Chancellor in the House of Commons

• the main fiscal event in Britain’s political calendar

What happens after the budget speech is made?

It paves the way for a Finance Bill which, once it becomes an Act, passes the Budget into law.

MP’s vote on the finance bill and it passes to the Commons for approval

It is fast tracked and becomes law in days.

The Leader of the Opposition responds to the budget speech after the chancellor is done

What is the difference between direct and indirect taxes?

• Direct taxes are on what you earn - the more you earn the more you pay ( income tax or inheritance tax)

• Indirect taxes are on goods and services - built into the price charged to consumers . ( VAT, alcohol duty)

What is the OBR?

• Office for Budget Responsibility

• Independent body that is supposed to be independent, objective and impartial

What is the role of the OBR?

• Their role is to scrutinise and analyse the budget and governments costings and provide analysis of UK’s public finances

• twice a year they publish a 5 year economy and public finance forecast

• November 2025 they accidentally leaked Rachel Reeves 2025 budget

What is recession?

A period of economic decline normally categorised as a fall in GDP for two successive quarters.

What are some visible signs of a recession?

• boarded up shops

• increase in unemployment

• people spending less

• businesses reducing staff or production

• businesses going into administration

What is inflation?

Sustained icrease in prices and a fall in the value of money

Measured by the retail price index (RPI) and consumer price index ( CPI)

What is the basket of goods?

Representative of hundreds of everyday items whose prices are tracked to measure inflation and cost of living