What is the Budget?
The Budget is the government of the day's main set-piece economic event. It comprises two key elements: the Chancellor's Budget speech to the House of Commons and the publication of the government's detailed financial reports.
This second element is formally called the Financial Statement and Budget Report (FSBR), but is colloquially known as the Red Book or the Budget Report.
Legally, the government of the day is bound to present to Parliament two economic forecasts a year. Since 1997, this has consisted of an Autumn Pre-Budget Report, which is a progress report of the economy so-far and sets out the direction of the government's economic policy, and a Spring Budget, which often concentrates on regulatory or taxation changes.
Prior to 1998, detailed spending plans used to be contained within the government's second financial statement, not the Budget. But since Gordon Brown's chancellorship these have been contained within a separate Comprehensive Spending Review (CSR). This takes place every two years and allocates money to individual departments and objectives.
But, many major announcements are still reserved for the Budget proper.
The Budget is one of the oldest political events in the calendar and can be traced back hundreds of years. It is the device by which money is formally raised for government spending.
Proposals contained within the Budget have to be authorised by Parliament in the form of the subsequent Finance Bill before they can come into force. But following the Provisional Collection of Taxes Act 1968 some changes in duties, for example vehicle excise duty, can take effect immediately from the Chancellor's announcement.
Indirect taxes, such as VAT, are permanent, whereas direct taxes, like income tax, are annual and have to be renewed by Parliament each year.
The practise of having one bill that deals with all tax changes began in 1860 to prevent the House of Lords rejecting draft legislation. Money and Finance bills, which cover spending and taxation, are the only bills that do not need to be passed by the House of Lords.
If the Lords were to attempt to reject any of the measures within a single Finance Bill, it would constitute an amendment and an infringement of the Commons' privilege.
There is a significant amount of ritual attached to the delivery of the Budget, beginning with a morning photo-call outside Number 11 Downing Street during which the Chancellor holds up the 'Budget Box'. This red leather box is used by Chancellors to carry their budget papers to the House of Commons and is believed to have been made for Gladstone in 1860. Chancellor Gordon Brown had a new box made in 1997 by Scottish industrial trainees.
The Chancellor is traditionally allowed an alcoholic drink during the Budget speeches. No other member of the Commons is allowed this privilege, nor is the Chancellor on any other occasion. Nigel Lawson famously used to partake of whisky, but Gordon Brown was reported to sip only Scottish spring water.
On the evening of the Budget there is a traditional broadcast by the Chancellor to the nation, with Opposition parties given the opportunity to respond with their own broadcasts later in Budget week.
Throughout the history of Parliament the Budget has been of prime importance as it cuts at the heart of political differences. Budgets determine how much money the government chooses to raise, and how it will raise it.
The state of the economy and the money raised determines what spending proposals can be acted on, or which taxes can be cut.
One of the most scrutinised areas is that of the Treasury's economic forecasts, in particular on income and spending, with opposition politicians frequently claiming that the sums do not add up.
Political opponents and economists spend significant time pouring over the details of the FSBR to uncover figures that the Chancellor has not mentioned in his speech.
In an election year the Budget takes on added importance. Chancellors are keen to avoid the stain of 'pre-election give aways' that may have to be paid for later, but equally are keen to launch policies that will see the party re-elected. Approaching general elections also requires the party in power to push the finance legislation through the Commons before the election is announced.
Once an election is called, business in the House of Commons ceases almost immediately. If the Finance Bill is not passed by then, its provisions lapse and would have to be re-introduced in the next Parliament.
The longest Budget speech is believed to have been by William Gladstone on 18 April 1853, lasting four hours and forty five minutes.
Benjamin Disraeli is said to have made the shortest at forty five minutes on 4 April 1867.
Gordon Brown was the longest continuously-serving Chancellor of the United Kingdom since the 1820s holding the post from 2nd May 1997 to 27th June 2007.
In the nineteenth century, William Gladstone was Chancellor for a total of 12 years and four months between 1852 and 1882.
The iconic red Budget box, first used by William Gladstone 150 years ago, was officially retired after being used by George Osborne in the June 2010 Budget. Made for William Gladstone around 1860, it has been used by every Chancellor since, with the exception of James Callaghan and Gordon Brown.
Source: HM Treasury website
"This Budget rewards work.
"Britain is going to earn its way in the world. There is no other road to recovery………
"Let us be resolved.
"No people will strive as the British will strive.
"No country will adapt as the British will adapt.
"No country will value those who work as we will value them.
"Together, the British people will share in the effort and share the rewards.
"This country borrowed its way into trouble.
"Now we’re going to earn our way out."
Chancellor George Osborne, Budget statement – 21 March 2012