The Budget

Every year the Chancellor of the Exchequer makes a major speech to the House of Commons on the state of the national finances and the Government's proposals for changes to taxation. This statement is known as the Budget.

When is the Budget?

The Budget usually takes place in March or April. There has to be a Budget every year because some taxes, such as income tax and corporation tax, are annual taxes (not permanent), so they must be renewed each year.

In election years, after a change of Government, a Budget will usually be introduced by the incoming Chancellor of the Exchequer, whether or not the outgoing Chancellor has already delivered one. 

What's in the Budget?

The Budget speech usually includes:

  • a review of how the UK economy is performing

  • forecasts of how the UK economy will perform in the future

  • details of any changes to taxation.

The Chancellor's statement is followed by several days' debate.

Budget Resolutions

Tax measures announced in the Budget, known as the Budget Resolutions, can be approved by the House of Commons to come into effect in law immediately. But the decisions to agree the resolutions themselves, are taken at the end of the debate on the Budget.

Finance Bill

The Finance Bill is the Bill presented to Parliament each year which enacts the Chancellor of the Exchequer's Budget proposals for taxation.

Once the House of Commons has agreed the Budget Resolutions, the Bill starts its passage through Parliament in the same way as any other Bill.

The House of Lords has a very limited role in respect of Finance Bills. Many Finance Bills are classed as Money Bills, which the Lords may not reject and can only delay for a month.

Pre-Budget Report

Since 1997, the Chancellor of the Exchequer has presented an annual pre-Budget report. This usually takes place in November/December. The pre-Budget report speech to the House of Commons usually includes:

  • a report of progress since the previous Budget

  • an update on the state of the UK economy

  • details of any proposed changes to taxation.

Further information

Related information

The term "budget"

The term "budget" derives from the word 'bougette', which is French for a little bag; a word which was in use in the eighteenth century.

It was customary to bring the statement on financial policy to the House of Commons in a leather bag. The modern equivalent of the bag is the red despatch box which was first used by William Ewart Gladstone in about 1860.  

Budget record holders

The longest continuous Budget speech was delivered by William Ewart Gladstone in 1853 and was 4 hours and 45 minutes. Benjamin Disraeli's speech in 1852 lasted 5 hours but included a break.

The shortest Budget speech was delivered by Benjamin Disraeli in 1867 and lasted 45 minutes.

With twelve Budget speeches, William Ewart Gladstone holds the record for delivering more Budget speeches than any other Chancellor of the Exchequer.

Further information can be found in the House of Commons Information Office PEP: The Budget (PDF PDF 196 KB) and House of Commons Library Briefing: Budget

Budget tipples

The Chancellor of the Exchequer is allowed to drink alcohol during his Budget speech.

Chancellors over the years have chosen water (Gordon Brown), whisky (Kenneth Clarke), gin and tonic (Geoffrey Howe), brandy and water (Benjamin Disraeli), sherry and beaten egg (Gladstone) and spritzer (Nigel Lawson).

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