| Agency Name: | His Majesty's Treasury |
| Type: | Department |
| Seal: | HM Treasury logo.svg |
| Picture Caption: | 1 Horse Guards Road, Westminster |
| Formed: | Before 1086 |
| Jurisdiction: | Government of the United Kingdom |
| Headquarters: | 1 Horse Guards Road Westminster, London |
| Employees: | 1967 FTE (+114 in DMO)[1] [2] |
| Budget: | £279.5 million (current) and £8.3 million (capital) (2021–2022) |
| Minister1 Name: | The Rt Hon. Sir Keir Starmer KCB KC MP |
| Minister1 Pfo: | First Lord of the Treasury |
| Minister2 Name: | The Rt Hon. Rachel Reeves MP |
| Minister2 Pfo: | Second Lord of the Treasury, Chancellor of the Exchequer |
| Minister3 Name: | The Rt Hon. Darren Jones MP |
| Minister3 Pfo: | Chief Secretary to the Treasury |
| Minister4 Name: | The Rt Hon. The Lord Livermore |
| Minister4 Pfo: | Financial Secretary to the Treasury |
| Minister7 Name: | James Murray MP |
| Minister7 Pfo: | Exchequer Secretary to the Treasury |
| Minister6 Name: | Tulip Siddiq MP |
| Minister6 Pfo: | Economic Secretary to the Treasury |
| Chief1 Name: | James Bowler |
| Chief1 Position: | Permanent Secretary to the Treasury |
| Child1 Agency: | UK Debt Management Office |
His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a ministerial department of the Government of the United Kingdom. It is responsible for developing and executing the government's public finance policy and economic policy.[3] The Treasury maintains the Online System for Central Accounting and Reporting, the replacement for the Combined Online Information System, which itemises departmental spending under thousands of category headings,[4] and from which the Whole of Government Accounts annual financial statements are produced.
The origins of the Treasury of England have been traced by some to an individual known as Henry the Treasurer, a servant to King William the Conqueror.[5] This claim is based on an entry in the Domesday Book showing the individual Henry "the treasurer" as a landowner in Winchester, where the royal treasure was stored.[6]
The UK Treasury traces its origins to the Treasury of the Kingdom of England, founded by 1126, in the reign of King Henry I. The Treasury emerged from the Royal Household. It was where the king kept his treasures, such as in The King's Chamber. The head of the Treasury was called the Lord Treasurer. Starting in Tudor times, the Lord Treasurer became one of the chief officers of state, and competed with the Lord Chancellor for the principal place. Thomas Cromwell transformed the financial administration of the country, restoring authority to the Exchequer and making the King's Chamber, of central importance under Henry VII, back into a small spending department overseeing the Royal Household. The fact that Cromwell had a key post in the old Chamber system as well as being Chancellor of the Exchequer shows how he did this. For the majority of the medieval period the office of the Treasury was within the Exchequer (responsible for managing the royal revenue in addition to collecting and issuing money). As is often the case, wars are expensive and in 1433 war with France led to a deficit of £30,000 – the equivalent of over £100 billion today. Money that the Treasury received was recorded by using tallies. These were sticks with notches marked on them according to the amount of money involved. The stick was cut in two and one half given to the Sheriff as receipt for the money. They were in use until 1834 when a fire destroyed the Palace of Westminster. By 1584, the deficit had been turned into a surplus equivalent to one year's revenue. Monarchs tended to bypass the Exchequer because of its ineffectiveness until it was reformed by Lord Treasurer Winchester and his successor, Lord Burghley, under Elizabeth I.
In contrast, the Stuarts failed to enforce limits on inflation, war, corruption and extravagant tendencies and were forced into debt again. In 1667, King Charles II was responsible for appointing George Downing, the builder of Downing Street, to radically reform the Treasury and the collection of taxes. The Treasury was first put in commission (placed under the control of several people instead of only one) in May or June 1660.[7] The first commissioners were the Duke of Albemarle, Lord Ashley, (Sir) W. Coventry, (Sir) J. Duncomb, and (Sir) T. Clifford.[8] From the middle of the 17th century the need for a national bank became pressing. England and, in particular, London was greatly changing due to fast expansion of The Empire's trade, not least N.America, but also entrepot trade that grew to over one third of trade and with Continental Europe, however, what was needed was a "fund of money," or a term familiar today, but by which is really meant either precious metals or 'hard' currency such as US dollars mainly that grew in importance after WW1 to pay external trade bills i.e. questions of financial liquidity or circulation needed to maintain and grow the nation's national income and trade, but above all to honour the nation's foreign obligations. Failures to do so can lead to casus belli.
The early 1700s saw the meteoric rise of the banking and financial markets, with the emerging stock market revolving around government funds. The ability to raise money by means of creating debt through the issue of bills and bonds heralded the beginning of the National Debt. Improved controls over public spending ensured that creditors were more willing to lend money to the government. By the 1730s an early version of the public spending survey and the annual Budget had been established. In its evolution the Treasury had to learn some valuable lessons. In 1711, the Treasury established a scheme whereby it secured government debt by the authorisation of its subscription into the capital of the South Sea Company, with government creditors in return holding stock in the company. After 1714, the Treasury was always in commission. The commissioners were referred to as the Lords of the Treasury and were given a number based on their seniority. In 1720 the South Sea bubble burst and thousands of investors were affected; such was the outrage that the Chancellor of the Exchequer was sent to the Tower of London. Eventually the First Lord of the Treasury came, however, to be seen as the natural head of government, and from Robert Walpole on, the holder of the office became known, unofficially, as the Prime Minister. Until 1827, the First Lord of the Treasury, when a commoner, also held the office of Chancellor of the Exchequer, while if the First Lord was a peer, the Second Lord usually served as Chancellor. Since 1827, however, the Chancellor of the Exchequer has always been Second Lord of the Treasury.
If important lessons were learnt that the National Debt (and public finances) require prudent management, when the Exchequer was abolished in 1833, HM Treasury became the ministerial department under the Chancellor of the Exchequer. When the Treasury was under commission, junior Lords were each paid £1,600 a year.[9] It is insensible to consider the Treasury's history without the Bank of England, set up in the 17th century. The argument for England's bank grew after the "Glorious Revolution" of 1688 when William of Orange and Queen Mary ascended to England's throne. London-based Scottish entrepreneur, William Paterson proposed a "Bank of England" with a "fund for perpetual Interest" (not yet bonds or bills) that was passed by Parliament, supported by Charles Montagu, Chancellor of the Exchequer and Michael Godfrey, another leading City merchant. The public were invited to invest subscriptions totalling £1.2 million forming the initial capital stock onward loaned to the Government in return for a Royal Charter. At the same time the National Debt was born, paper money came into existence.
See main article: Chancellor of the Exchequer. Although the Kingdoms of Great Britain and Ireland had been united by the Acts of Union 1800, the exchequers of the two kingdoms were not consolidated until 1817 under the Consolidated Fund Act 1816 (56 Geo. 3. c. 98).[10] [11] For the holders of the Irish office before this date, see Chancellor of the Exchequer of Ireland.
As of 5 July 2024,[12] the Treasury Ministers are as follows, with cabinet ministers in bold:
| width=95x | Minister | Portrait | Office | Portfolio |
|---|---|---|---|---|
| Keir Starmer KCB KC MP | First Lord of the Treasury | Formal head of the Treasury, concurrently serves as the Prime Minister. | ||
| Rachel Reeves MP | Chancellor of the Exchequer & Second Lord of the Treasury | Overall responsibility for the department; fiscal policy (including the presenting of the annual Budget); monetary policy, setting inflation targets; ministerial arrangements (in role as Second Lord of the Treasury). | ||
| Sir Alan Campbell MP | Parliamentary Secretary to the Treasury | Government Chief Whip, though formally a junior minister in the Treasury. | ||
| Darren Jones MP | Chief Secretary to the Treasury | Spending reviews and strategic planning; in-year spending control; public sector pay and pensions; Annually Managed Expenditure (AME) and welfare reform; efficiency and value for money in public service; procurement; capital investment; infrastructure spending; housing and planning; spending issues related to trade; transport policy, including HS2, Crossrail 2, Roads, Network Rail, Oxford/Cambridge corridor; Treasury interest in devolution to Scotland, Wales and Northern Ireland; women in the economy; skills, labour market policy and childcare policy, including tax free childcare; tax credits policy; housing and planning; legislative strategy; state pensions/ pensioner benefits; freeports – with support from FST on customs aspects. | ||
| The Lord Livermore | Financial Secretary to the Treasury | Leading on the UK tax system including direct, indirect, business, property and personal taxation; corporate and small business taxation; Value Added Tax (VAT); European and international tax issues; overall responsibility for the Finance Bill; National Insurance Bill; customs policy; HMRC planning and delivery of our future partnership with the EU; departmental Minister for HM Revenue and Customs and the Valuation Office Agency and the Government Actuary's Department; tariffs policy; trade policy; freeports (CST policy lead – FST support on customs); infrastructure policy:National Infrastructure Strategy,National Infrastructure Commission; Infrastructure and Projects Authority (IPA, joint with Cabinet Office); Public – Private Partnerships; (PPPs) and Private Finance Initiatives (PFI/PFI2); parliamentary deputy on public spending issues. | ||
| Tulip Siddiq MP | Economic Secretary to the Treasury | Banking and financial services reform and regulation; financial stability, including relationship with the PRA; financial conduct, including relationship with the FCA; financial services including all banking, insurance, asset management; retail financial services, including banking competition, consumer finance, financial advice and capability; bank lending and access to finance; financial Inclusion (lead on the government's financial inclusion agenda); access to affordable; credit, including credit unions; women in finance agenda; EU financial services including EU exit and decisions as a member state; city competitiveness, including global financial markets, Global Financial Partnerships and financial services trade; green finance, Islamic finance, and Fintech; financial services taxation, including bank levy, bank corp. tax surcharge, IPT; personal savings tax and pensions tax policy; sponsorship of UKGI and State owned financial assets – RBS, UKAR; financial sanctions and countering economic crime and illicit finance; foreign exchange reserves and debt management policy, National Savings and Investments and the Debt Management Office; cash and payments including, Royal MintParliamentary deputy on economy issues. | ||
| James Murray MP | Exchequer Secretary to the Treasury | The UK tax system including: Direct, indirect, business, property, and personal taxation; European and other international tax issues; Customs and VAT at the border; The Finance Bill and the National Insurance Bill; Departmental Minister for HM Revenue and Customs (HMRC), the Valuation Office Agency, and the Government's Actuary's Department; Tax administration policy; Input to Investment Zones and Freeports focussing on tax and customs elements; Overall responsibility for retained EU Law and Brexit opportunities. | ||
| Emma Reynolds MP | Parliamentary Secretary to the Treasury | Supporting the Treasury's role across government and Treasury ministers in their duties. |
Some of the government whips are also associated in name with the Treasury: the Chief Whip is nominally Parliamentary Secretary to the Treasury and traditionally had an office in 12 Downing Street. Some of the other whips are nominally Lords Commissioners of the Treasury, though they are all members of the House of Commons. Being a whip is a party, rather than a government, position; the appointments to the Treasury are sinecure positions which allow the whips to be paid ministerial salaries. This has led to the Government front bench in the Commons being known as the Treasury Bench. However, since the whips no longer have any effective ministerial roles in the Treasury, they are usually not listed as Treasury ministers.
The position of Permanent Secretary to the Treasury is generally regarded as the second most influential in the British Civil Service; two recent incumbents have gone on to be Cabinet Secretary, the only post outranking it.
From October 2022, the Permanent Secretary to the Treasury is James Bowler and there are two Second Permanent Secretaries: Cat Little and Beth Russell.[13] The previous Permanent Secretary, Sir Tom Scholar, was sacked by Chancellor Kwasi Kwarteng and Prime Minister Liz Truss shortly after they took office.[14]
The Treasury publishes cross-government guidance including Managing Public Money [15] and The Green Book: Central Government Guidance on appraisal and evaluation, current version dated 2020.[16] Managing Public Money includes a definition of "value for money": The Green Book includes the historic five case model, which requires consideration of the policy, economic, commercial, financial and management dimensions of a proposed project.
Banknotes in the UK are normally issued by the Bank of England and a number of commercial banks (see Banknotes of the pound sterling). At the start of the First World War, the Currency and Bank Notes Act 1914 was passed, giving the Treasury temporary powers to issue banknotes in two denominations, one at £1 and another at 10 shillings, in the UK. Treasury notes had full legal tender status and were not convertible for gold through the Bank of England. They replaced the gold coin in circulation to prevent a run on sterling and to enable purchases of raw materials for armaments production. These notes featured an image of King George V (Bank of England notes did not begin to display an image of the monarch until 1960). The wording on each note was UNITED KINGDOM OF GREAT BRITAIN AND IRELAND — Currency notes are Legal Tender for the payment of any amount by the Lords Commissioners of His Majesty's Treasury under the Authority of Act of Parliament (4 & 5 Geo. V c.14). Notes issued after the partition of Ireland from 1922 had the wording changed to read "United Kingdom of Great Britain and Northern Ireland".
The promise (never adhered to) was that they would be removed from circulation after the war had ended. In fact, the notes were issued until 1928, when the Currency and Bank Notes Act 1928 returned note-issuing powers to the banks.[17]
See main article: Government Offices Great George Street.
The Treasury Main Building at 1 Horse Guards Road, often referred to as the Government Offices, Great George Street (GOGGS), was designed by John Brydon following a competition.[18] Construction took place in two phases. The West end was completed in 1908 and the East end was completed in 1917.[18] It was originally built as offices for the Board of Education, the Local Government Board, and the Ministry of Works Office; HM Treasury moved into the building in 1940.[18] A major refurbishment of the building was procured under a Private Finance Initiative contract in 2000. The works, which were designed by Foster and Partners together with Feilden and Mawson and carried out by Bovis Lend Lease at a cost of £140 million, were completed in 2002.[19]