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At length, when the Commons had increased in political Commons' influence, and the subsidies voted by them had become originate Part III. the principal source of national revenue, they gradually grants.

Chapter
XXII

Speech from the

throne, see p. 171.

assumed their present position in regard to taxation and
supply, and included the Lords as well as themselves in
their grants. So far back as 1407, it was stated by King
Henry IV., in the ordinance called "The Indempnity of the
Lords and Commons," that grants were "granted by the
Commons, and assented to by the Lords." That this was
not a new concession to the Commons is evident from the
words that follow, viz. "That the reports of all grants
agreed to by the Lords and Commons should be made in
manner and form as hath hitherto been accustomed; that
is to say, by the mouth of the Speaker of the House of
Commons for the time being."1

right to

preroga

Concurrently with parliamentary taxation, other imposts Taxes by were formerly levied by royal prerogative with the consent tive. of Parliament: but none of these survived the Revolution of 1688.2 Since that time the public revenue of the Crown has been dependent upon Parliament, and is derived either from annual grants for specific public services, or from payments already secured and appropriated by Acts of Parliament, and which are commonly known as charges upon the Consolidated Fund (see p. 591).

Action of the Commons on the royal demand for a supply. -The action taken by the House of Commons upon the demand of aid and supply for the public service made by the speech from the throne, is the appointment, pursuant to standing order No. 14, of those committees of the whole S. O. 14, Appendix I. house, which are known as the committee of supply and the committee of ways and means. Motions setting up these committees are made immediately after the house agrees to the address in answer to the speech, and are put forthwith from the chair, no debate being permitted thereon.3

13 Rot. Parl. 611.

2 Bill of Rights, art. 4.

3 23rd Feb. 1888, 322 H. D. 3 s. 1348; 19th Aug. 1895, 36 Parl. Deb. 4 s. 360; 1st March, 1905, 142 ib.

140.

On one occasion when the government desired to make a statement at the commencement of an evening sitting on re-opening the committee of supply, the Speaker

Functions

of the com

ways and

means.

XXII.

Part III.

Procedure

and ways

and means,

Estimates,

see p. 546,

In these committees the financial duties of the House of Chapter mittees of Commons are mainly discharged. The committee of supply supply, and controls the public expenditure by considering the grants of money that will be required for the army, navy, and in supply, civil services of the current year, upon the estimates of that expenditure prepared by the ministers of the Crown. see p. 613. The committee of ways and means provides the public income raised by the imposition of annual taxation, and votes the resolutions that authorize the issue out of the Consolidated Fund of the sums required to meet the grants voted by the committee of supply (see p. 624). Committees of the whole house are also appointed for Committees the consideration of grants made in pursuance of messages tional exfrom the Crown, or other exceptional demands for expenditure. The matter of permanent taxation is also considered by similar committees; and upon their resolutions bills are brought in to effect the objects sought by the appointment of these committees.

Other financial

com

mittees.

The annual budget of taxation.

on excep

penditure,

see p. 630.

The imposition of taxation.-The consideration of the financial statement for the year made by the chancellor of the exchequer,' is an important feature in the financial legislation of each session. This statement, familiarly known as "the budget," is made when the minister has completed his estimate of the probable income and expenditure for the ensuing financial year, and usually after some progress has been obtained in voting the grants for the army and navy and other public services.2 In that statement the chancellor of the exchequer develops his See proviews of the resources of the country, communicates his (ways and calculations of probable income and expenditure, and declares whether the burdens upon the people are to be

ruled privately that as the rules
provided no place for such a motion
at an evening sitting, notice of the
motion should be given, but that if
the motion had been made at one of
the ordinary times for setting up
money committees (see pp. 245, 559),
notice would not have been neces-
sary. See Notices of Motion, Sess.

1902, p. 3294.

1 Or sometimes the first Lord of the treasury, if a member of the House of Commons.

In the years 1845, 1848, 1852, and 1857, the budget statement was made in anticipation of the customary votes in committee of supply, 77 H. D. 3 s. 455; 96 ib. 900. 987.

cedure

means), p.

624.

XXII.

Chapter increased or diminished; and, as the consideration of the taxes for the service of the year is the province of the Part ill. committee of ways and means (see p. 590), to that committee his statement is generally addressed.1

The resolutions which form the usual basis of the chancellor's statement are the resolutions for the continuance, during the ensuing financial year, of the customs duty upon tea, and of the income tax duty, as these duties are the only duties not, at present, made permanent by statute; 2 and upon these resolutions, when agreed to by the house, the bill is introduced which gives legislative effect to the financial objects of the government.3

1 Financial statements have not invariably been made in the committee of ways and means. In 1823, the budget was brought forward in the committee on the Exchequer Bills Bill, 9 H. D. 2 s. 1413. On the 3rd December, 1852, and again on the 13th February, 1857, the statement was made in committee of supply, 123 H. D. 3 s. 836; 144 ib. 631. In 1860, it was introduced in a committee on the Customs Acts, 156 ib. 812.

2 The duty on malt was made perpetual by statute in 1822, on tobacco in 1826, on offices and pensions in 1836, and on sugar in 1846. The continuance of the tea duty by annual resolutions, and not by statute, is presumably in accordance with the established usage that one important branch of the revenue should be voted from year to year. See Mr. Gladstone's statement, 1863, 170 ib. 228.-(Information supplied by Mr. S. Spring Rice.)

3 An anticipatory authority is imparted by usage to the resolutions of the committee of ways and means which impose or alter taxation. Under orders from the treasury, although statutory legal effect may not for some time be given to these resolutions, the reduced or the increased duties are collected from the date prescribed by the resolutions, as soon as they are agreed to by the committee, and from the

day following that upon which they are agreed to by the committee when no date is specified in the resolution. These proceedings are, at the time, without legal authority; but they are subsequently legalized by the statute under which those altered duties are levied. Thus in 1890, for example, the resolution increasing the duty on spirits was moved and passed by the committee of ways and means on the 17th April, and the increased duty began to be charged on the following day. The reduction of the duty on tea, as from the 1st May, was agreed to by the committee on the 22nd April, and took effect from the day specified in the resolution. The Customs and Inland Revenue Act, 1890, accordingly enacted that the altered duties should be charged and paid on and after the 18th April and 1st May, respectively, 53 Vict. c. 8, ss. 2, 4. Similarly it is the practice of the Treasury to act upon resolutions authorizing an issue of consols or exchequer bonds as soon as they are agreed to in committee, 145 Parl. Deb., 4 s. 842. It is necessary, however, that statutory authority for the issue should be obtained before the first payment of dividend falls due. Fourth Report, Public Accounts Committee, Sess. 1903, Parl. Paper, No. 304, p. iv.

Yearly

taxes con

the com

mittee of

means.

taxation.

XXII.

Ways and

cedure, see

p. 624.

Taxes for the revenue of the year.-In the procedure adopted Chapter sidered by by the Commons for the imposition of taxation, the following distinction is generally, if not uniformly, drawn. Taxes Part III. ways and applicable to the immediate exigencies of the public means proincome, which are renewed from year to year, and temporary and other taxes imposed to obtain an immediate source of revenue, are considered by the committee of Permanent ways and means.1 Fiscal regulations, and alterations of permanent duties, not having directly for their object the increase of revenue, are dealt with by committees of the Illustration whole house. An illustration of this procedure can be of practice drawn from past legislation on the sugar duties. Being an in the sugar annual duty, the duty on sugar was, until 1846, voted in the committee of ways and means. During that year the duties on sugar, after revision in that committee, were made permanent; and accordingly, when, in 1848, a further revision was proposed of the sugar duties, that revision was proposed in a separate committee of the whole house, and not in the committee of ways and means.3

duties.

Specific application of

Additions to permanent duties, made for the express purpose of supplying deficiencies in the annual revenue, are considered in the committee of ways and means; and when an objection was raised that certain resolutions, as extending beyond the current financial year, ought not to have originated in that committee, the Speaker overruled the objection, stating that taxation, as an immediate source of revenue, though it may embrace a further period, is properly submitted to the committee of ways and means.1

Statutory provision must be made by Parliament, during proceeds of each financial year, to ensure that all the money therein. raised for the service of the Crown be applied to a distinct

taxation.

195 C. J. 351. 415. Property Tax and Inhabited House Duty, 185253, 108 ib. 187; Tobacco Duty, 1878, 133 ib. 169. But in 1784, the house duty had been increased in a committee on the Smuggling Acts, 40 ib. 58. 245; 24 Parl. Hist. 1008; and in 1853, an increase of the Scotch

and Irish spirit duties was proposed
in a committee on Customs, &c.,
Acts, to avoid delay, and hence a loss
of revenue, 108 C. J. 428.

292 ib. 499. 500; 97 ib. 264.
3 193 ib. 626.

16th May, 1861, 162 H. D. 3 s.
2101.

XXII.

Chapter use, either wholly or partly, within the current financial year; as the proceeds of taxation should not be reserved Part III. for accumulation, pending the decision of Parliament, or otherwise left without specific appropriation.1

The Consolidated Fund.-To provide a fund, "into which shall flow every stream of the public revenue, and from whence shall issue the supply for every public service," 2 the proceeds of taxation, and other sums of money received by the treasury on behalf of the Crown, are carried to the Consolidated Fund established by Act 27 George III. c. 13; and from that fund the sums of money required to defray the public expenditure are drawn.3

and means

tions.

Drafts upon the Consolidated Fund for supplies.-The Payments drafts made upon the Consolidated Fund to meet the upon ways grants voted by the committee of supply for the service of resoluthe current year, are based upon resolutions, agreed to by the committee of ways and means, "That, towards making good the supply granted to his Majesty for the service of the year ended on the 31st day of March, 19—, the sum of 1. be granted out of the Consolidated Fund of the dated Fund United Kingdom;" and upon these resolutions are founded, Appropri- first, the sessional Consolidated Fund Acts, and finally the see p. 557. Appropriation Act, which endows those resolutions with complete legal effect; and upon receipt of the order from the sovereign, which gives final validity to a supply grant,

Consoli

Acts and

ution Acts,

Royal order, see p. 545.

1 This was the opinion of the Speaker, 24th June, 1890, stated in deference to the wish of the house, not as a ruling on a question of order, but as a result of his consideration of a matter of constitutional propriety; and the opinion was acted upon by the government, 345 H. D. 3 s. 1799-1805. See also debate on the Ireland Development Grant in Session 1903, 120 Parl. Deb. 4 s. 822, 975; 126 ib. 817.

2 Public Income, &c., Parl. Paper, 1869 (366), Part. II. p. 327.

3 Upon a system, commenced in the year 1881, under the sanction of the comptroller-general, the treasury, and of the public accounts com

mittee, the cash receipts acquired
by public departments, without
being paid into the exchequer, may
be applied as an appropriation in
aid of money provided by Parlia-
ment for the service to which such
receipts have been paid, in pursu-
ance of a treasury minute that is
laid before Parliament. Public
Accounts committee, 3rd Report,
sess. 1881 (350); and 2nd Report,
sess. 1883 (187); 17th March, 1892,
2 Parl. Deb. 4 s. 1115; Public Ac-
counts and Charges Act, 1891, s. 2.
The amounts so to be applied are
authorised by the annual Appro-
priation Acts, e.g. 57 & 58 Vict.
c. 59, s. 3.

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