The money raised by the government through taxation, assets and borrowing is its revenue, whereas the money paid out is known as government spending. We are currently experiencing widespread government spending cuts. Your generation could grow up with
austerity the defining approach to government finance.
Every year the Chancellor of the Exchequer, second only to the Prime Minister in terms of seniority and authority within the government (and many would argue that Gordon Brown was more powerful as Tony Blair's Chancellor than when he became PM himself), sets out the government spending plans, including any changes to revenue-raising (taxes
etc), in the Budget.
The Budget is the single most important economic and financial statement
made each year by the Chancellor of the Exchequer to Parliament and the
nation. The Budget Responsibility and National Audit Act 2011 require
the Government to produce a Budget Report for each financial year. The
Charter for Budget Responsibility sets out what the Budget Report must
cover.
[source: http://www.hm-treasury.gov.uk/budget.htm]
Here's a short history of the Budget:
Every budget has winners and losers. In theory at least, Labour governments (at least before Tony Blair) would set budgets that reduced tax on the poor whilst increasing spending on the poor, using increased corporation (business) and wealth (income) tax to pay for this, while the Tories would cut public spending overall, especially welfare payments to the poor, and focus on reducing tax on the rich and business. The 2012 budget was extremely controversial: the so-called
pasty tax (here's
the BBC's take) seemed to penalise the poor while the richest saw their income tax cut from 50% to 45%.
After every budget the media quickly calculates who they think will the winners and losers, as do
think tanks such as
the IFS.
The Guardian analyse the 2012 winners and losers from
the autumn 2012 statement, which was heavy on welfare cuts,
here.
TASK 1: LIST FORMS OF TAXATION
This
is a very simple task that you can achieve by quickly browsing the
relevant Wikis, hyperlinked above, and looking for the different forms
of taxation they list. You should be able to find at least 9. They don't
list Council Tax as they focus on national taxation. Write or type
these 9, + Council Tax.
The Wiki on public finance is full of useful facts, including the range of taxes the government uses to raise revenue. There is also a separate Wiki on taxation.
