What is the treasury?
HM Treasury is the UK government's economics and finance ministry. It sets tax policy, controls public spending, manages government borrowing and oversees financial services policy. It is led by the Chancellor of the Exchequer and is often described as the most powerful department in Whitehall.
The Treasury's formal head is the First Lord of the Treasury, a title held by the Prime Minister. In practice the department is run by the Chancellor of the Exchequer. Other ministers include the Chief Secretary to the Treasury, who negotiates spending with other departments, and the Economic Secretary. It is based at 1 Horse Guards Road in Westminster. Ministers there are senior.
The Treasury prepares the Budget and spending reviews. Spending reviews set each department's budget for several years. It also sets the government's fiscal rules on borrowing and debt, and the Bank of England's inflation target. HMRC collects taxes, and the Debt Management Office sells government bonds, but both answer to the Treasury. The Treasury also manages the government's stakes in businesses through UK Government Investments.
Because almost every policy costs money, the Treasury has huge influence over the rest of government. Critics say it can be too cautious, short-termist or focused on cost rather than long-term value. Supporters say a strong Treasury protects taxpayers and keeps public finances credible with markets. Other departments often complain that the Treasury's grip slows decisions and blocks investment. Some reformers want a separate department to drive growth.
- Sets taxes in the Budget
- Agrees each department's spending
- Manages government borrowing
- Oversees banks and financial regulation
- Sets fiscal rules
Budget: Under £1bn for the department itself, but it decides how about £1.3 trillion of public money is spent. Staff: About 2,000
What it runs or funds
HM Revenue and Customs, UK Debt Management Office, Office for Budget Responsibility (independent), National Savings and Investments, Royal Mint
Did you know? Officially the PM is First Lord of the Treasury, which is why No 10 has that title on its letterbox.
Britain is split. Now you decide.
In Population Decides you play the role of the Treasury, setting taxes and spending for every department in your Budget.
Play Population Decides freeCommon questions
Who runs the Treasury?
The Chancellor of the Exchequer runs it day to day, though the Prime Minister is formally First Lord.
What is a spending review?
A Treasury process that sets departmental budgets for several years.
Is HMRC part of the Treasury?
HMRC is a separate department, but it works under Treasury ministers.
What is HM Treasury?
The UK's finance ministry. The Treasury is the UK's finance ministry, controlling spending, taxes and borrowing.
Which minister runs the Treasury day to day?
The Chancellor of the Exchequer. The Chancellor of the Exchequer leads the Treasury.