Role Of HM Treasury
At a macro level, we are responsible for maintaining control over public spending, deciding how money is raised from taxpayers, setting the direction of the UK’s economic policy and working to achieve strong and sustainable economic growth. Our policy team advise Ministers and ensure they have the information they need when making decisions.
Our specific priorities are:
- reducing the deficit and rebalancing the economy
- spending taxpayers’ money responsibly and ensuring value for money
- creating a simpler, fairer tax system – alongside a well-functioning welfare system
- creating stronger and safer banks
- making corporate taxes more competitive
- making it easier for people to access and use financial services
- improving regulation of the financial sector to protect customers and the economy
The aim of the Business and International Tax Group is to provide strategic oversight of business, environmental, transport, property, VAT, excise taxes and customs duties that together raise revenue of over £250bn a year, to deliver policy change in consultation with key stakeholders, to handle the UK’s relationships with other countries, the EU and international institutions on tax issues, and to manage and mitigate risks to the UK’s tax base including through tackling avoidance and evasion.
The Group will in particular need to contribute to fiscal consolidation by ensuring our taxes deliver anticipated yields, and ensure the international competitiveness of the UK’s business taxes, while working with other Treasury Groups to deliver the Government’s growth and fairness agendas and the UK’s departure from the EU. Following the outcome of the EU referendum in June 2016, the Group has additional and very high profile policy challenges to address.
One of our key responsibilities is ensuring the Government is spending public money responsibly and providing value for money to all taxpayers. Delivering world-class public services entails making tough decisions on new policy initiatives. Major projects or reforms in health or education have to be affordable and delivered on time, while offering a fair, balanced and effective service to citizens. The Ministers we advise have to implement the most effective spending control possible to ensure each pound makes a difference to those in need.
As an organisation, we oversee public spending in the key public services and departments – including health, education, the police, the criminal justice system, local government, housing, culture and defence. This means working closely with other government departments, understanding the risks and challenges they face, and supporting them to achieve the best possible value for money.
HM Treasury advises Ministers on promoting a stable and efficient financial services sector, to support growth and promote excellent outcomes for consumers and businesses. This includes banking regulation (a very high profile issue) as well as the identification of risks to the sector in the UK or globally.
Working with stakeholders is key in Financial Services – for example, consulting industry representatives on how changes to regulation affect them, and analysing how the same changes might affect consumers in the general public. We also work with the Financial Conduct Authority on banking regulation, and with the Bank of England on financial stability.
We are responsible for ensuring the sustainability of the government’s finances, over both the medium term and the long term, to support economic stability and growth. This means making sure that the government has enough money to meet its spending commitments. Work in this area involves managing the UK’s national debt, overseeing the Bank of England’s management of the UK’s foreign currency reserves and gold, and financing by National Savings and Investments.
Strategy, Planning and Budget operates at the heart of the Treasury and has responsibility for the development of the Department’s overall strategy, work programme, change programme and business plan; the coordination of Tax Strategy and the Budget; and the delivery of short-term priority policy projects across the department. The group has a mix of standing and project roles, and as part of Treasury’s new flexible resourcing model, it is run as a single unit.
The Group aims to promote a personal tax and welfare system which supports Government objectives of deficit reduction, economic growth and fairness.
The Group is responsible for a mix of policy and spending control. This includes high profile areas of personal tax, labour market, welfare, pensions and savings – and within this major reforms, such as pensions flexibility, tax-free childcare and Universal Credit. The Group also owns spending control for both HMRC and Department for Work and Pensions (DWP). These are key areas for the Treasury, with fiscal significance and risk.
The Group also has a wider HM Treasury (HMT) role providing analysis of the overall distributional impacts of tax and benefit reforms on households.
Our areas of work mean that the Group plays an important role in supporting HMT Ministers at all fiscal events and is often at the centre of Ministerial decision making processes. The Group works closely with colleagues across HMT, HMRC, DWP and No10, and with many external stakeholders
The Public Services Group is at the heart of the Treasury’s work to secure fiscal consolidation. Our principal objective is to manage public spending of over £250 billion covering the key public services and departments – including health, education, the police, the criminal justice system, local government, housing, culture, defence and the devolved administrations.
We do this by working with Departments, Ministers, special advisors, senior officials and other Treasury teams to ensure spending plans support high quality public services and provide value for money for the taxpayer. We also lead for the Treasury on a number of high profile and challenging reform agendas – in areas such as the NHS, schools, local government funding and fiscal devolution.
The Financial Stability Group has the aim of security the stability of the UK financial sector for the benefit of the economy. It does this through identifying and analysing emerging risks to the financial stability of the UK and the global financial system, and preparing and responding appropriately. As part of this, it is responsible for intervening directly to manage the provision and withdrawal of public support for the financial services sector including the effective stewardship of the Government’s interests in Royal Bank of Scotland and Lloyds, and exit from its ownership of the residual assets in Northern Rock and Bradford and Bingley. It is also responsible for ensuring the authorities have the appropriate toolkit for dealing with future failures and planning for future stability events. The Group works cooperatively with the Bank of England, Prudential Regulation Authority and Financial Conduct Authority to develop and maintain effective systems to monitor and assess micro and macro prudential financial stability risks, and ensure they are fully taken into account in the Treasury’s risk management framework. It manages the macroprudential framework, including the Bank of England’s Financial Policy Committee (FPC) remit and tools, and coordinates the Treasury’s interests in the global Financial Stability Board.
The Enterprise and Growth Unit works to promote sustainable economic growth and higher productivity – through private sector investment, enterprise, innovation and the cost-effective transition to a low-carbon economy. We work with the Department for Business, Energy & Industrial Strategy, the Department for Environment, Food & Rural Affairs, the Department for Transport, the Department for International Trade, the Department for Digital, Culture, Media & Sport, and the Competition and Markets Authority to ensure that we are spending wisely to deliver these goals.
HM Treasury is not only concerned with the UK economy. We work to stimulate international initiatives that will enhance the UK’s prospects on the global stage.
Our Policy team advise Ministers on promoting and protecting the UK’s economic interests overseas. We support the Chancellor and senior officials in building relationships with key international partners and represent the UK in a range of international organisations such as the G20 and the IMF. We also analyse what is happening in the world economy, work on specific issues from sanctions and asset freezing to climate change, and oversee value for money on international development spending.
The Economics group is responsible for providing economic surveillance, delivering the evidence base to underpin macroeconomic and microeconomic policy and promoting professionalism for economics and social research in government.