The Chancellor will deliver the Budget on 15 March 2023 and the Government introduced the Finance (No.2) Bill 2022-23 on 23 March. According to the Treasury’s policy, the presentation of the annual Budget and the Finance Bill would usually happen in the Autumn. However, over the past few years, there have been economic and fiscal statements outside the regular Budget timetable.

This Insight looks at what differentiates a ‘Budget’ from other fiscal statements the Government has delivered recently, and an overview of what happens during and following the Budget.

Overview of the Budget

The Budget is a statement made by the Chancellor to MPs in the House of Commons, presenting the Government’s plans for the economy, including changes to taxation and spending.

The economic and fiscal outlook is published by the Office for Budget Responsibility (OBR) on the same day as the Budget. This is an independent analysis of the UK’s economic and fiscal situation, which the Chancellor addresses in their speech. The Treasury also publishes a report alongside the Budget, with further detail on the rationale and the costing of measures announced.

After the Budget statement, MPs may be asked to approve immediate changes to some taxes. There is then a debate in the Commons, normally lasting four days. After this, MPs are asked to agree ‘ways and means’ resolutions to approve tax proposals. Finally, a Finance Bill which gives permanent legal power to the Budget’s proposals is introduced.

When should the Budget happen?

As of 2017, Treasury policy is that the Budget should be the only fiscal event of the year and it should take place in the Autumn. The OBR is required to publish two outlooks per financial year, and the Chancellor has to respond to both. Therefore, the Chancellor would present the Government’s response to the second outlook in a spring statement.

Both the Budget and the response to the spring outlook are formal occasions for the Government to set out its economic and fiscal policy to the Commons, although most tax and spending decisions should be included in the Budget.

Recent exceptions to the Budget timetable

Following the first Autumn Budget in November 2017, there have been exceptions to the expected timetable. For example, the 2019 General Election postponed the Budget to spring 2020. In 2020, the need to respond to rapid changes during the Covid-19 pandemic led to three statements on the economy, which included major tax and spending decisions.

On July 8, the then Chancellor set out the Government’s ‘Plan for Jobs’; on 24 September, he described measures the Government would implement during the winter months; and on 22 October, he announced extensions of the main support schemes he had previously launched.

On the other hand, Chancellor Jeremy Hunt’s Autumn Statement in November 2022 included all the characteristics of a traditional Budget (including its timing, held in the Autumn), even though it was called something different.

What are the Budget’s key events?

The Budget speech

On Budget day, the Chancellor is photographed outside of No 11 Downing Street with the traditional red box containing the Budget speech. The speech normally takes place on a Wednesday at 12.30pm, following Prime Minister’s Questions. The speech will contain any proposals for new taxation, continuing existing taxes, or for abolishing taxes.

When are Budget changes implemented?

After the Budget speech, some changes to existing taxes or continuations may be introduced on the same day. Normally, changes to excise duties, such as tobacco or alcohol duty, would be introduced on Budget day. Immediate changes to taxation happen if MPs approve motions under the Provisional Collection of Taxes Act 1968.

Any new tax, changes to existing taxes, or any provision that has to start operating before the Finance Bill is passed (such as changes implemented at the beginning of the new tax year) have to be covered by a ‘ways and means resolution’ (each tax measure will have its own ways and means resolution).

These resolutions need to be approved by Parliament within 10 sitting days of the Budget. An example of this is income tax. Income tax must be renewed each year in the Finance Bill. The approval of a ways and means resolution means the Treasury can still legally collect income tax when the new tax year starts, even though the Finance Bill has not become law yet.

Other tax changes may not be implemented until much later as set out in the Finance Bill.

Debating the Budget statement and the Finance Bill

The debate in the House of Commons on the Budget usually takes place over four days, starting from the response from the Leader of the Opposition after the Chancellor’s speech. These debates are wide-ranging and generally come under a broad topic such as ‘trade’. At the end of the Budget debate, MPs are asked to approve the ways and means resolutions.

All tax measures announced in the Budget are given permanent legal effect in the Finance Bill. The Bill is officially introduced to Parliament, for its ‘first reading’, after the approval of the ways and means resolutions.

Following scrutiny in the House of Commons, the Finance Bill goes to the House of Lords.

The role of the House of Lords

The Commons is the only chamber authorised to initiate tax legislation. The House of Lords cannot amend the Finance Bill and does not have a debate on the Bill in detail (known as ‘clause by clause’).

The only substantive debate in the Lords takes place at second reading.

Further reading


About the author: Francesco Masala is a researcher at the House of Commons Library specialising in taxation policy.

Photo By HM Treasury under Creative Commons CC0

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