HM Treasury

HM Treasury
Name	HM Treasury
Formed	1126 (as the Exchequer)
Jurisdiction	Government of the United Kingdom
Headquarters	1 Horse Guards Road, London
Employees	1,420
Budget	£3.8 billion (resource) and £500 million (capital) for 2021–22
Minister1 name	Jeremy Hunt
Minister1 pfo	First Lord of the Treasury
Minister2 name	Laura Trott
Minister2 pfo	Chief Secretary to the Treasury
Chief1 name	James Bowler
Chief1 position	Permanent Secretary to the Treasury
Chief2 name	Beth Russell
Chief2 position	Second Permanent Secretary to the Treasury

HM Treasury, often referred to as the Exchequer, is the United Kingdom government department responsible for developing and executing the government's public finance policy and economic policy. It is one of the three great offices of state, alongside the Home Office and the Foreign, Commonwealth and Development Office. The department controls the Exchequer, manages the Consolidated Fund, and oversees the Bank of England.

History

The origins of the department trace back to the medieval Exchequer, established during the reign of Henry I. The Treasury evolved significantly following the Glorious Revolution and the establishment of parliamentary control over taxation. Key historical figures include Robert Walpole, often considered the first Prime Minister, who served as First Lord of the Treasury. The department's role was consolidated during the Industrial Revolution and expanded in the 20th century, particularly after the Great Depression and the Bretton Woods Conference, which shaped modern international finance. The Bank of England Act 1998 granted it operational independence over monetary policy.

Functions and responsibilities

Its core functions include formulating and implementing fiscal policy, managing the public sector finances, and regulating the financial services industry. The department sets the framework for the Spring Statement and the Autumn Statement, oversees the Office for Budget Responsibility, and leads on international financial issues through bodies like the International Monetary Fund and the G7. It also has responsibility for financial services regulation, national insurance, and value-added tax policy.

Organisation and structure

The department is headquartered at 1 Horse Guards Road in London, adjacent to Downing Street. It is organised into several directorates, including the Economics Directorate, the Public Spending Directorate, and the Financial Services Group. Key operational arms include the Debt Management Office, which manages the government gilt market, and UK Government Investments, which oversees the government's corporate assets. It works closely with other departments such as the Department for Business and Trade and the Cabinet Office.

Ministers and officials

The political head is the First Lord of the Treasury, a title held by the Prime Minister, currently Jeremy Hunt. Day-to-day responsibility falls to the Second Lord of the Treasury, the Chancellor of the Exchequer, also held by Hunt. Other key ministers include the Chief Secretary to the Treasury, Laura Trott, and the Financial Secretary to the Treasury. The senior civil servant is the Permanent Secretary to the Treasury, James Bowler, supported by the Second Permanent Secretary to the Treasury, Beth Russell. Notable former chancellors include Winston Churchill, Gordon Brown, and Nigel Lawson.

Fiscal policy and economic management

The department is the primary authority for the UK's fiscal policy, setting overall taxation and spending levels to meet objectives defined in the Charter for Budget Responsibility. It works with the Bank of England on macroeconomic stability and coordinates responses to economic shocks, such as those following the 2007–2008 financial crisis or the COVID-19 pandemic. Key policy tools include adjustments to income tax, corporation tax, and national insurance contributions, as well as fiscal events like the Budget.

Public spending and budgeting

It controls public expenditure through the Spending Review process, which sets departmental budgets, known as Departmental Expenditure Limits, typically over a multi-year period. The department manages the Consolidated Fund, from which most government expenditure is authorised by the Appropriation Act. It oversees major spending programmes, including healthcare funding through the NHS and social security via the Department for Work and Pensions. Scrutiny of spending is provided by the National Audit Office and the Public Accounts Committee.

Category:HM Treasury Category:Economics and finance ministries Category:Government departments of the United Kingdom