• C. Peters

How HM Treasury Works - Part 1

Four Responsibilities, Four Powers, Four Groups

The Treasury, Her Majesty’s Treasury I should say, is the most important, powerful and problematic department in government. Let me explain how and why…

To start, I should explain the Treasury’s four core responsibilities, four main powers and four distinct parts.

First, its four core responsibilities are:

  1. Government spending

  2. Revenue raising

  3. Financial stability

  4. Productivity and Growth

And, aligning with this, it’s four main powers are:

  1. Allocating funding to departments – i.e managing public spending

  2. Taxation – for revenue raising

  3. Oversight of the financial regulatory system – including the Bank of England and Prudential Regulation Authority, Financial Conduct Authority, Royal Mint, and HMRC

  4. Capital Investment – i.e. directly or indirectly investing in UK infrastructure (usually via departments such as the Department for Transport or BEIS), companies (like the government has a stake in Natwest) or the British Business Bank (which provides loans to companies)

And the Treasury has four key groups:

  1. Public Spending group – reports to the Chief Secretary to the Treasury (currently Simon Clarke)

  2. Financial Services group – reports `to the Financial Secretary (currently Lucy Frazer)

  3. Tax Policy group – reports to the Exchequer Secretary (currently Helen Waitely)

  4. Productivity and growth group – reports to a random Minister, usually called the Economic Secretary (most notable recent incumbent was Theodore Agnew, the “Minister for Efficiency”, who also sat in Cabinet Office and resigned over the corruption resulting from the business support scheme that he said the Treasury were doing too little about)

… Obviously they all report to the Chancellor (currently Rishi Sunak).

One of the biggest issues in government is that all four of these groups have very difficult goals, stakeholders and work very differently, and rarely talk to each other.

The most important to the rest of the government is the Public Spending Group.

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