Frequently Asked Questions: The Budget

What is the Budget?

The Budget is the Government's annual financial statement and review of levels of taxation. It also includes the Government's future financial strategy and economic forecast.

Where does the word 'budget' come from?

The word 'budget' comes from an old French word 'bougette' which meant 'little bag'.

When is the Budget?

The Budget last took place on 20 March 2013. The next Budget will be on 19 March 2014.

Where does the Budget speech take place?

The Budget speech is made by the Chancellor of the Exchequer (currently the Rt Hon George Osborne MP) on the floor of the House of Commons.

Why is there a Budget every year?

Because certain taxes, such as income tax, are annual taxes (not permanent), so they must be renewed each year.

When are the new taxes applied?

Under the Provisional Collection of Taxes Act 1968, tax changes and tax continuations can be validated by a single Motion taken after the Budget Speech. This means that tax proposals contained in the Budget Speech may come into effect immediately.

What happens after the Chancellor's Budget speech?

Traditionally, the Leader of the Opposition, rather than the Shadow Chancellor replies to the Budget speech.

This is normally followed by four days of debate on the Budget Resolutions (the basic parts of the Budget that renew annual taxes, such as income tax), covering different policy areas such as health, education and defence.

Who is in the Chair when they are debating the budget?

Chairman of Ways and Means also presides over the Budget debate.

Between 1641 and 1967 proposals for raising taxation originated in the Committee of Ways and Means, but in 1967 that Committee was abolished. The Chairman of Ways and Means presided over that Committee, and though Speakers have sometimes presided at Budgets since abolition of the Committee (as, for example, in 1968 and 1989), the Chairman of Ways and Means does generally occupy the chair during the speech.

What is the Finance Bill?

The Finance Bill makes the tax proposals announced in the Budget into law.

What is the Red Book?

The Red Book (named after the traditional colour of its cover) is the Financial Statement and Budget Report (FSBR).

The Red Book contains an analysis of the economy and a summary of the Budget tax measures.

What is the Budget Box?

The Budget Box is the red, leather-covered box containing the Budget Speech.

Traditionally the Chancellor is photographed on Budget day on the steps of 11 Downing Street holding up the Budget Box.

What is the Autumn Statement?

The Autumn Statement provides an update on the government's economic plans.

When is the Autumn Statement?

The Autumn Statement last took place on 5 December 2013.

What was the Pre-Budget report?

From 1997 a Pre-Budget Report was published in the autumn, which included a report on progress since the previous Budget, an update on the state of the national economy and announcements of proposed new taxes. The coalition government announced that it would replace the Pre-Budget Report with an Autumn Statement in September 2010.

What is the longest Budget speech?

The longest continuous Budget speech was by William Gladstone on 18 April 1853, lasting 4 hours and 45 minutes.

What is the shortest Budget speech?

Benjamin Disraeli's 1867 Budget speech lasted only 45 minutes.

Can the Chancellor drink alcohol during the Budget speech?

Yes. Previous Chancellors have chosen whisky (Kenneth Clarke), gin and tonic (Geoffrey Howe), brandy and water (Benjamin Disraeli), sherry and beaten egg (Gladstone) and spritzer (Nigel Lawson). Gordon Brown chose to drink mineral water. Alistair Darling and George Osborne also drank water.

• Glossary: Budget
• Glossary: Chancellor of the Exchequer
• Glossary: Finance Bill
• House of Commons Library Briefing Paper: The Budget and the annual Finance Bill
• House of Commons Library Briefing Paper: House of Commons Budget Debates and Finance Bills
• Parliamentary occasions: the Budget