Exchequer Department

Exchequer Department

Exchequer, the department of the public service that receives Government revenue. In Britain the Exchequer originated in the reign of King Henry 1; the name is derived from the Latin scaccarium (chess-board): a chequered cloth was used to cover the table in order to simplify the counting of money. The tipper Exchequer (Exchequer of Account), now merged in the Queen's Bench Division of the High Court, sat originally as a court to hear cases relating to Crown revenues. The Lower Exchequer (Exchequer of Receipt), originally a small group of administrative officials who collected revenue, has developed in modem times into Her Majesty's Treasury.

The Treasury is the central department of the British civil service; subject to the approval of Parliament, it imposes and regulates taxation and the collection of the revenue, controls public expenditure through the preparation of estimates for Parliament, arranges the provision of funds for the public service, inflates and carries out measures affecting public debt, currency and banking, and prescribes the manner in which the public accounts shall be kept. The traditional function of the Exchequer the control of expenditure from public revenue, and its responsibility initially to the sovereign and in modern times to Parliament has been performed since 1866 by the Department of Exchequer and Audit, presided over by the Comptroller and Auditor General, who is independent of the Government and responsible only to the House of Commons. Under the Exchequer and Audit Departments Act of 1866 the revenues of the Post Office, the Inland Revenue, the Customs and Excise and other public money payable to the Exchequer are paid into The Account of Her Majesty's Exchequer', the balance of which at any time represents the Consolidated Fund.

In common practice therefore the term Exchequer has come to be treated as synonymous with the Consolidated Fund, from which public expenditures are made.

The Chancellor of the Exchequer is the chief financial minister of the Crown and Second Lord of the Treasury (traditionally the Prime Minister is First Lord). His duties are to advise the Cabinet on financial and fiscal matters and to state Government financial policy in the House of Commons, the most important occasion being the annual budget.

Exchequer Accounts, the accounts at the Bank of England into which moneys collected by the fiscal officials Inland Revenue, Customs and Excise, Post Office, etc., and the proceeds of Government borrowing are paid. These accounts can be drawn on only by the sanction of the Comptroller and Auditor General on the authority of Parliament.

Read on Economist - New Economist


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