[Sidenote: The Rule is Applied to Taxes.]

A still greater extension of the rule is made in its application to taxes; but this depends not upon the standing order, but upon a general const.i.tutional principle which has gradually been evolved therefrom. The principle has, in fact, been expanded until it may be stated in the general form that no motion can be made to raise or expend national revenue without a recommendation from the Crown, or to increase the sum asked for by the Crown. The government has accordingly the exclusive right to propose fresh national taxation, whether in the form of new taxes or of higher rates for existing ones,[282:2] and no private member can move to augment the taxes so proposed.[282:3] He can, however, move to reduce them, and he is even free to bring in a bill to repeal or reduce taxes which the government has not proposed to touch.[283:1]

Moreover, as the principle merely forbids him to urge an increase of the burdens upon the people beyond the point at which they stand, or the point at which the ministers propose to place them, he can, when the government suggests a reduction of a tax, move an amendment to reduce it less,[283:2] and when the government brings in a plan for a revision of taxation, he can move to subst.i.tute a somewhat different tax for the one proposed, provided the amount of revenue yielded will not be greater.[283:3] But these rights are seldom used, and almost never with success; otherwise they would, no doubt, be found objectionable and swept away.

The House of Commons, at the present day, certainly stimulates extravagance, rather than economy; but this is done by opinions expressed in debate, not by specific proposals made by the members. It is done by criticising the administration, by complaints, for example, that the Army and Navy are insufficient for the defence of the empire.

The result is a growth in the budgets prepared by the ministry; but this is a very different thing from expenditure directly caused by the irresponsible action of private members. The former is deliberate and reflects public opinion, the latter may originate in personal or local feelings, and then be adopted through heedless good nature or skilful log-rolling.

[Sidenote: Committee of Supply.]

As grants of money can be taken up only in Committee of the Whole, and only on the recommendation of the Crown,--that is, of a minister--the House resolves itself, early in the session, into Committee of the Whole on Supply, to consider the estimates submitted by the government.[283:4]

[Sidenote: Consolidated Fund Charges.]

[Sidenote: Estimates for the Supply Services.]

Now it will be remembered that certain charges, such as the interest on the national debt, the royal civil list, and the salaries of the judges, are payable by statute out of the Consolidated Fund, and hence do not require an annual vote of Parliament, or come before the Committee of Supply. The estimates for the rest of the expenditures for the coming year, known as the supply services, are divided into three parts, relating to the Army, the Navy, and the civil services. The last of the three is divided into cla.s.ses, and all of them are divided into grants or votes, which are in turn subdivided into subheads and items. Each grant is the subject of a separate vote in Committee of Supply, and amendments may be moved to omit or reduce any item therein.

[Sidenote: Votes on Account.]

The English financial system aims at precision. It is deemed of great importance that the estimates should be as accurate as they can be made, and hence they must be prepared as short a time as possible before going into effect. They are made up in the several departments late in the autumn, then submitted for revision to the Treasury, and laid before Parliament shortly after it meets about the middle of February. But as the financial year begins on April 1, it is manifest that the Committee of Supply cannot finish its discussion of them by that time. With the work it must do in pa.s.sing upon supplementary estimates for the current year, it can, in fact, make little progress with those of the coming year during March, and yet money must be spent, and there must be legal authority to spend it, especially as the unspent balances of appropriations lapse at the close of the financial year in which they are voted. The committee, therefore, pa.s.ses votes on account to cover the time until the regular appropriations are made. The reader will, perhaps, recall the fact that in the military and naval services an excess on one grant may, with the approval of the Treasury, be used to cover deficiencies on other grants, and hence it is the habit in the case of those services to vote in March the grant for the pay and wages of the men for the whole year, and use the money so obtained for all purposes until the appropriations have been completed. In the civil services, where this is not allowed, votes on account are pa.s.sed for all the grants, large enough to carry on the government for four or five months.

[Sidenote: Supplementary Grants.]

With the utmost effort at accuracy in the estimates they will always prove to be insufficient in some branch of the service, or an unexpected need for expenditure will arise; and to provide funds in such cases supplementary estimates must be presented and voted before the close of the financial year.

[Sidenote: Excess Grants.]

There may also be other expenses outside the estimates, which have, by the authority vested in the Treasury, been temporarily met by advances from the Civil Contingencies Fund or the Treasury Chest Fund, or from extra receipts of the department. These do not require an immediate appropriation; but they are reported to the Committee on Public Accounts at the next regular session after the close of the financial year, and then presented to the Committee of Supply to be covered at once by an excess grant.

Before the end of March, therefore, the Committee of Supply must pa.s.s the supplementary grants for the year then coming to a close, the excess grants for the preceding year, the votes on account for the coming year, and make such progress as it can with the regular estimates for that year.

[Sidenote: Consolidated Fund Acts.]

But the committee merely pa.s.ses and reports to the House resolutions in favour of those grants, and the money cannot be paid out of the Consolidated Fund without the authority of a statute. The next step is taken in the Committee of the Whole on Ways and Means, where on the motion of a minister another resolution is pa.s.sed, that to make good the supply already voted, the sum required be granted out of the Consolidated Fund. This in turn must be reported to and confirmed by the House.[285:1] A bill called a Consolidated Fund Bill is then brought in to give effect to the resolution. The bill, with the separate grants annexed in a schedule, goes through the ordinary stages; but the time spent upon it is short, because its only object being to authorise the issue of money to cover the supply already voted, no amendment can be moved to reduce the amount, or change the destination, of the grants.[286:1]

[Sidenote: The Appropriation Act.]

The first Consolidated Fund Act must be pa.s.sed in time to receive the royal a.s.sent before April 1. One or two more follow from time to time as the Committee of Supply makes its way slowly through the estimates.[286:2] Finally, after the whole supply for the year has been voted, the Appropriation Bill is brought in, which sums up and embodies all the grants for the services of the year, prescribes their application by means of the schedules annexed, and authorises their payment out of the Consolidated Fund. This is usually pa.s.sed on the last day of the session.

[Sidenote: The Budget.]

So much for the process of getting money out of the Consolidated Fund.

That of getting money into the fund goes on at the same time, but independently. It is usually early in April that the Chancellor introduces his budget in the Committee of Ways and Means. In an elaborate speech he reviews the finances of the past year, comparing the results with the estimates, and dealing with the state of trade and the national debt. He then refers to the estimates already submitted, and coming to the gist of his speech, and the part of it that is awaited with curiosity, he explains how he proposes to raise the revenue required to meet the expenditures. As he could have no right to take the floor without a motion before the House, he concludes by moving one or more of a series of resolutions containing the changes in taxation, or the continuation of temporary taxes, that he desires.

About three quarters of the revenue is derived from permanent taxes, which are rarely changed, and require no action by Parliament from year to year. But in order to adjust the income closely to expenses, certain taxes are voted for a year at a time, their rates being raised or lowered as may be required to balance the budget. For many years the only imposts so treated were the income tax and the duty on tea; one of them being regarded as a direct tax levied upon property, and the other as an indirect tax resting upon the ma.s.s of the people. Recently, however, the duties on tobacco, beer and spirits, and the corresponding excises on beer and spirits, have been increased, and the additions so made have been voted from year to year.

The budget speech of the Chancellor of the Exchequer is followed by a general discussion of the questions he has raised, and either at once, or on subsequent days, by debates and votes upon the resolutions he has brought in. The resolutions when adopted are reported to the House for ratification, but as in the case of supply, they have no legal effect until enacted in the form of a statute. Perhaps it would be more correct to say that they have no legal validity; because in order to prevent large importations made to avoid a projected increase in a duty, it is customary to prescribe in the resolution a date near at hand when the tax shall take effect, and to collect it from that date if the resolution has been agreed to by the House on report. The collection is quite unauthorised by law at the time, but it is afterward ratified by a statute which fixes the same date for the operation of the tax; and this gives the transaction complete legal validity, because Parliament has power to pa.s.s a retroactive law. If for any reason the provision for the tax fails of enactment, the duties that have been collected are, of course, refunded.

[Sidenote: The Finance Act.]

It was formerly the habit to include in the fiscal resolutions based upon the budget, and in the act to give them effect, the annual and temporary taxes alone; the permanent taxes, and especially those imposed rather for economic reasons than for the purpose of revenue, being dealt with by special acts.[287:1] But the use of taxation for revenue only, and still more a quarrel with the House of Lords, brought about a change of system. In 1860 the government determined to repeal the paper duties, which hindered the publication of cheap newspapers, and were decried as a tax on knowledge. The loss of revenue was taken into account in the financial plans of the year; but according to custom the repeal of the duties was contained in a separate bill by itself. The Lords, after pa.s.sing the act to give effect to the rest of the budget, rejected this bill. At the moment the Commons could do nothing save express their opinions; but the next year they included the repeal of the paper duties in the annual tax bill, and the Lords were constrained to pa.s.s it; for although the Peers do not formally admit the claim of the Commons that they must accept or reject money bills without alteration, they never venture to amend them. The policy of including all the taxes in one bill has developed into a permanent practice, and under the name of the Finance Bill this now includes all fiscal regulations relating both to the revenue and to the national debt.[288:1]

[Sidenote: The Public Accounts.]

The whole initiative, as regards both revenue and expenditure, lies with the government alone. The House has merely power to reject or reduce the amounts asked for, and it uses that power very little. Financially, its work is rather supervision than direction; and its real usefulness consists in securing publicity and criticism rather than in controlling expenditure. It is the tribunal where at the opening of the financial year the ministers must explain and justify every detail of their fiscal policy, and where at its close they must render an account of their stewardship. This last duty is highly important. The House receives every year reports of the administration of the finances from three independent bodies, or to be more accurate, it receives two distinct sets of accounts and one report.

[Sidenote: The Finance Accounts.]

As soon as possible after the close of the financial year, the Treasury submits the Finance Accounts, which cover all receipts paid into, and all issues out of, the Consolidated Fund, giving the sources from which the revenue was derived and the purpose for which the issues were made.[289:1] As these accounts are based, not upon the sums expended by the different branches of the government, but upon the amounts transferred to their credit at the Banks of England and Ireland, they can be compiled quickly; and, in fact, they are laid before Parliament near the end of June, about three months after the close of the financial year to which they relate.

[Sidenote: The Appropriation Accounts.]

Meanwhile the Comptroller and Auditor General--who holds his office during good behaviour, with a salary paid by statute directly out of the Consolidated Fund, and who considers himself in no sense a servant of the Treasury, but an officer responsible to the House of Commons[289:2]--examines the accounts of the several departments. This is a matter requiring much time, and it is not until the opening of the next regular session that he presents what are known as the Appropriation Accounts,[289:3] covering in great detail the actual expenditures in all the supply services, with his reports and comments thereon.[289:4]

[Sidenote: The Committee of Public Accounts.]

His accounts and reports are referred to the Committee of Public Accounts, which consists of eleven members of the House chosen at the beginning of the session,[289:5] and includes the Financial Secretary of the Treasury, some one who has held a similar office under the opposite party, and other men interested in the subject. It inspects the accounts and the Comptroller and Auditor General's notes of the reason why more or less than the estimate was spent on each item. It inquires into the items that need further explanation, examining for the purpose the auditing officers of the departments, and other persons; and it makes a series of reports to the House, which refer in detail to the cases where an excess grant must be made by Parliament, or a transfer between grants in the military departments must be approved.[290:1]

The Committee of Public Accounts has undoubtedly great influence in keeping the expenditures very strictly within the appropriations, and from time to time it expresses its opinions strongly about any laxity in that respect--remarks that are not forgotten by the officials. But there has been much complaint that the House itself, while criticising the administrative conduct of the government freely in the discussion of the estimates, takes little interest in their financial aspect; and, therefore, the recent Committee on National Expenditure has suggested that one day, at least, should be set apart for the discussion of the report of the Committee on Public Accounts.[290:2]

[Sidenote: Indian Revenue Accounts.]

There are a couple of anomalous cases where, by statute, the estimates for a service are not voted by Parliament, but the accounts are afterward submitted to it for approval. This is true of India; and the provision is a wise one, for it allows the government of that country to be conducted by the authorities on the spot, who are alone competent to do it, and yet it reserves to the House of Commons an opportunity for supervision and criticism. On one of the last days of the session a motion is made to go into Committee of the Whole to consider these accounts, and on that motion a general debate on Indian affairs is in order. In the committee itself only a formal motion is made certifying the total revenue and expenditure, and debate is confined to the economic and financial condition of the dependency.[291:1] In the same way the expenses of Greenwich Hospital are, by statute, defrayed out of its revenues, but the accounts are submitted to the House annually, with a resolution for their approval.[291:2]

FOOTNOTES:

[279:1] S.O. 67.

[279:2] S.O. 66. May (527) points out that these two rules, together with S.O. 68, adopted in 1715, that the House will receive no pet.i.tion for compounding a revenue debt due to the Crown without a certificate from the proper officer stating the facts, were for more than a century the only standing orders of the House.

[279:3] Todd, "Parl. Govt. in England," 2 Ed., I., 691.

[280:1] As an ill.u.s.tration of the fact that the rise of the authority exerted by ministers over Parliament was contemporary with the loss by the King of personal legislative power, Todd (II., 390) remarks that this rule was first adopted in 1706, and the last royal veto was given in 1707.

[280:2] British North Amer. Act, -- 54. Commonwealth of Australia Const.i.tution Act, -- 56.

After the government of India was transferred from the East India Company to the Crown, in 1856, the rule was extended to motions for a charge upon the Indian revenue. S.O. 70.

[280:3] For France, _cf._ Dupriez, _Les Ministres_, II., 416-17, 421-30; Lowell, "Govts. and Parties," I., 116-17; for Italy, Dupriez, I., 316-19; Lowell, 207-9. Owing to the greater cohesion of parties, and to the fact that the expenditures are contained in a series of separate acts which can hardly be changed without disturbing the financial equilibrium, Belgium has suffered little from this cause. Dupriez, I., 249-52.

[280:4] Todd, I., 692-96. When the main object of a bill is the creation of a public charge, a resolution for that charge must be pa.s.sed in Committee of the Whole upon a recommendation from the Crown before the bill is introduced. But when the charge is merely subsidiary or incidental, the bill can be brought in previously, the clauses or provisions creating the charge being printed in italics. The words so printed are regarded as mere blanks with an indication of the way they are eventually intended to be filled, and they cannot be considered by the House until a Committee of the Whole has pa.s.sed the necessary resolutions on a recommendation from the Crown. May, 528-29, 539.

[281:1] May, 538-40; Todd, I., 699-701. By S.O. 69 an address of this kind must be adopted in Committee of the Whole.

[281:2] "Gleanings of Past Years," I., 81.

[281:3] May, 532, 580.