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.
Find out more about the budget and what the implications of the most recent one, click below.
Where does the word ‘budget’ come from?
The word ‘budget’ comes from an old French word ‘bougette’ which meant ‘little bag’.
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.
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 usually 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.
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.
Is it true that the Chancellor can drink alcohol during the Budget speech?
Yes it is. 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.
Brutal Budget: Good or Bad?
Why have they misled us?
I am so stupid – I believed them when Cameron said it, when George Osborne said it and when William Hague said it. I was hopelessly naive to believe them. Doubtless I should have known better, but when David Cameron said time and again during the election campaign that the Tories had no plans to raise VAT, I believed him.
Prior to the election the Tories said that they felt 80% of the deficit should be tackled by cutting public spending, while tax increases would account for the remaining 20 per cent. That is exactly what the Chancellor done. The rise in VAT is estimated to generate £13bn, and no other tax comes close to this suggesting that this was their plan all along! But if the Tories have been economical with the truth, the Lib Dems have been downright deceitful.
After all, Messrs Cameron, Osborne and Hague did not overtly rule out increasing VAT. They simply said it was not envisaged. On the other hand, the Liberals, in accurately predicting that the Tories would raise VAT, pledged themselves to resist it by all achievable means. Now they support a policy which only two months ago they said they would fight to the death. What is their justification? It is that conditions have changed. Europe’s economic problems have supposedly worsened in recent weeks, and now that they have looked at the books the Lib Dems say they can see that an increase in VAT is inescapable after all.
No one believes this rubbish. Europe’s troubles were fairly bad enough two months ago, and the awful state of Britain’s public finances were bare for all to see.
Little or naught has changed. The reason that the Lib Dems have changed their minds on VAT is straightforward. It is the price they have had to pay for being in coalition with the Tories – for having their greasy fingers on the levers of power.
It was a good and necessary budget. but when I look at the two parties in our coalition Government embracing measures which only seven weeks ago they said they wouldn’t, I have a depressing sense that politics is a game played by the political classes in their own interests at our expense.
This was a guest post by ‘Young Economist.’ Check out his blog for more like this!