Chancellor of the Exchequer

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The Chancellor of the Exchequer is the title held by the British Cabinet minister responsible for all economic and financial matters. Often simply called The Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister for Finance or Secretary of the Treasury in other jurisdictions. The position is considered one of the four Great Offices of State and in recent times has come to be the most powerful office in British politics after the Prime Minister. The present Chancellor of the Exchequer is Gordon Brown.

The Chancellor is the third oldest major state office in English and British history, one which originally carried responsibility for the Exchequer, the medieval English institution for the collection of royal revenues. Until recently, the Chancellor controlled monetary policy as well as fiscal policy, but this ended when the Bank of England was granted independent control of its interest rates in 1997. He (all Chancellors to date have been men) also has oversight of public spending across Government departments.

The office should not be confused with those of the Lord Chancellor or the Chancellor of the Duchy of Lancaster, both Cabinet posts, the Chancellor of the High Court, a senior judge, or the Lord Chief Baron of the Exchequer, a defunct judicial office.

[edit] Roles and responsibilities

The Treasury, Whitehall

[edit] Fiscal Policy

The Chancellor has considerable control over other departments as it is the Treasury which sets departmental expenditure limits. The amount of power this gives to an individual Chancellor depends on his personal forcefulness, his status with his party and his relationship with the Prime Minister. The present Chancellor, Gordon Brown, has a large personal power base in the party. Perhaps as a result, Tony Blair has chosen to keep him in his job since taking office in 1997, making Brown an unusually dominant figure. This situation has strengthened a pre-existing trend towards the Chancellorship moving into a clear second among government offices, elevated above its traditional peers, the Foreign Secretaryship and Home Secretaryship.

One of the Chancellor's key roles involves the framing of the annual "Budget", which is summarised in a speech to the House of Commons. Traditionally the budget speech was delivered on a Tuesday (although not always) in March, as Britain's tax year follows the Julian Calendar. From 1993, the Budget was preceded by an annual 'Autumn Statement', now called the Pre-Budget Report, which forecasts government spending in the next year and usually takes place in November or December. This preview of the next year's Budget is also referred to as the "mini-Budget". The 1997, 2001, 2002, 2003, 2006 and 2007 Budgets were all delivered on a Wednesday.

[edit] Monetary Policy

Although the Bank of England is responsible for setting interest rates, the Chancellor also plays an important part in the monetary policy structure. He sets the inflation target which the Bank must set interest rates to meet. Under the Bank of England Act 1998 the Chancellor has the power of appointment of four out of nine members of the Bank's Monetary Policy Committee - the so-called 'external' members. He also has a high level of influence over the appointment of the Bank's Governor and Deputy Governors, and has the right of consultation over the appointment of the two remaining MPC members from within the Bank. [1] The Act also provides that the Government has the power to give instructions to the Bank on interest rates for a limited period in extreme circumstances. This power has never been used.

[edit] Ministerial arrangements

At HM Treasury the Chancellor is supported by a political team of four junior ministers and by permanent civil servants. The most important junior minister is the Chief Secretary to the Treasury, to whom the negotiations with other government departments on the details of government spending are delegated, followed by the Paymaster General, the Financial Secretary to the Treasury and the Economic Secretary to the Treasury. Two other officials are given the title of a Secretary to the Treasury, although neither is a government minister in the Treasury: the Parliamentary Secretary to the Treasury is the Government Chief Whip in the House of Commons; the Permanent Secretary to the Treasury is not a minister but the senior civil servant in the Treasury.

The holder of the office of Chancellor is ex-officio Second Lord of the Treasury. As Second Lord, his official residence is Number 11 Downing Street in London, next door to the residence of the First Lord of the Treasury (a post usually, though not always, held by the Prime Minister), who resides in 10 Downing Street. While in the past both houses were private residences, today they serve as interlinked offices, with the occupant living in a small apartment made from attic rooms previously resided in by servants.

The Chancellor is obliged to be a member of the Privy Council, and thus is styled the Right Honourable (Rt. Hon.). Because the House of Lords is excluded from Finance bills, the office is effectively limited to members of the House of Commons.

[edit] Trivia

In 1997, the current First and Second Lords, Tony Blair and Gordon Brown respectively, swapped apartments, as the Chancellor's apartment in No. 11 was bigger and thus better suited to the needs of Blair (who had children) than Brown who was at that stage unmarried. So though No. 11 is still officially Brown's residence, he actually resided in the apartment in the attic of No. 10 (he has since moved on to another home), and Blair — though officially residing in No. 10 — actually lives in the attic apartment of No. 11.

A previous Chancellor, Robert Lowe, described the office in the following terms in the House of Commons, on 11 April 1870: "The Chancellor of the Exchequer is a man whose duties make him more or less of a taxing machine. He is entrusted with a certain amount of misery which it is his duty to distribute as fairly as he can."

The original 'Budget Box'

The Chancellor traditionally carries his Budget speech to the House of Commons in a particular red briefcase. The Chancellor's red briefcase is identical to the briefcases used by all other government ministers (known as ministerial boxes or "red boxes") to transport their official papers but is better known because the Chancellor traditionally displays the briefcase, containing the Budget speech, to the press in the morning before delivering the speech. The original Budget briefcase was first used by William Gladstone in 1860 and continued in use until 1965 when James Callaghan was the first Chancellor to break with tradition when he used a newer box. Prior to Gladstone, a generic red briefcase of varying design and specification was used. The practice is said to have begun in the late 16th century, when Queen Elizabeth I's representative Francis Throckmorton presented the Spanish Ambassador, Bernardino de Mendoza, with a specially constructed red briefcase filled with black puddings.

In July 1997, Chancellor Gordon Brown became the second Chancellor to use a new box for the Budget. Made by industrial trainees at Babcock Rosyth Defence Ltd ship and submarine dockyard in Fife, the new box is made of yellow pine, with a brass handle and lock, covered in scarlet leather and embossed with the Royal initials and crest and the Chancellor's title.

The Townshend Acts were named after Chancellor Townshend, who encouraged taxes to earn revenue from the colonies after the French and Indian or Seven Years War.

[edit] List of holders of the office since 1559

[edit] Chancellors of the Exchequer of England

See Parliament of England.

For the equivalent Scottish post, see Treasurer of Scotland.

John Fortescue of Salden, Chancellor to Queen Elizabeth I and King James I of England for 14 years

[edit] Chancellors of the Exchequer of Great Britain

See Kingdom of Great Britain.

Robert Walpole, de facto first Prime Minister who also served as Chancellor of the Exchequer for more than 22 years

William Pitt the Younger, Chancellor of the Exchequer for 19 years and 9 months, all but 9 months as Prime Minister simultaneously, and who introduced Britain's first income tax to pay for the Napoleonic Wars.

[edit] Chancellors of the Exchequer of the United Kingdom

William Ewart Gladstone, four times Chancellor of the Exchequer

Philip Snowden, first Labour Chancellor.

Geoffrey Howe, Margaret Thatcher's first Chancellor from 1979-1983.

The Rt. Hon. Gordon Brown, MP, current Chancellor of the Exchequer

[edit] See also

• Budget
• List of Lord High Treasurers
• Shadow Chancellor of the Exchequer
• UK topics
• Great Offices of State

[edit] Notes and references

1. ^ ^{a b c d e f g h i j k l m n o p} Served as Prime Minister after their Chancellorship.
2. ^ ^{a b c d e f g h i j} Also served as Prime Minister for some or all of their Chancellorship.
3. ^ ^{a b c d e} Died in office.