Chancellor of the Exchequer

United Kingdom Chancellor of the Exchequer
Royal Arms as used by Her Majesty's Government
Incumbent Philip Hammond since 13 July 2016
Her Majesty's Treasury
Style	The Right Honourable (Formal prefix) Chancellor
Member of	British Cabinet Privy Council National Security Council
Reports to	The Prime Minister
Residence	11 Downing Street Westminster, London United Kingdom
Seat	Westminster, London
Appointer	The British Monarch on advice of the Prime Minister
Term length	No fixed term
Inaugural holder	Hervey de Stanton (England only)
Formation	22 June 1316
Deputy	Elizabeth Truss (Chief Secretary to the Treasury)
Website	GOV.uk

The Chancellor and Under-Treasurer of Her Majesty's Exchequer, commonly known as the Chancellor of the Exchequer,^[1] or simply the Chancellor,^[2] is a senior official within the Government of the United Kingdom and head of Her Majesty's Treasury. The office is a British Cabinet-level position.

The chancellor is responsible for all economic and financial matters, equivalent to the role of finance minister in other nations. 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 Chancellor of the Exchequer is now always Second Lord of the Treasury as one of the Lords Commissioners for executing the office of Lord High Treasurer. In the 18th and early 19th centuries it was common for the Prime Minister also to serve as Chancellor of the Exchequer if he sat in the Commons; the last Chancellor who was simultaneously Prime Minister and Chancellor of the Exchequer was Stanley Baldwin in 1923. Formerly, in cases when the Chancellorship was vacant, the Lord Chief Justice of the King's Bench would act as Chancellor pro tempore.^[3] The last Lord Chief Justice to serve in this way was Lord Denman in 1834.

The Chancellor is the third-oldest major state office in English and British history; it originally carried responsibility for the Exchequer, the medieval English institution for the collection and auditing of royal revenues which dates from the Anglo-Saxon period^[4] and survived the Norman conquest of England.^[5]^:149 The earliest surviving records which are the results of the exchequer's audit, date from 1129–30 under King Henry I and show continuity from previous years.^[6] The Chancellor controlled monetary policy as well as fiscal policy until 1997, when the Bank of England was granted independent control of its interest rates. The Chancellor also has oversight of public spending across Government departments.

The current Chancellor of the Exchequer is Philip Hammond.

Roles and responsibilities

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."

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 within his party and his relationship with the Prime Minister. Gordon Brown, who became Chancellor when Labour came into Government in 1997, had a large personal power base in the party. Perhaps as a result, Tony Blair chose to keep him in the same position throughout his ten years as Prime Minister; making Brown an unusually dominant figure and the longest serving Chancellor since the Reform Act of 1832.^[7] This has strengthened a pre-existing trend towards the Chancellor occupying a clear second position among government ministers, elevated above his traditional peers, the Foreign Secretary and Home Secretary.

One part of the Chancellor's key roles involves the framing of the annual year budget. As of 2017, the first is the Autumn Budget, also known as Budget Day which forecasts government spending in the next financial year and also announces new financial measures. The second is a Spring Statement, also known as a "mini-Budget". Britain's tax year has retained the old Julian end of year: 24 March (Old Style) / 5 April (New Style, i.e. Gregorian). From 1993, the Budget was in spring, preceded by an annual autumn statement. This was then called Pre-Budget Report. The Autumn Statement usually took place in November or December. The 1997, 2001, 2002, 2003, 2006, 2007, 2008, 2012 and 2016 Budgets were all delivered on a Wednesday, summarised in a speech to the House of Commons.

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.^[8] 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 officially used.

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, a member of the Cabinet, 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 title that has for many years been 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 an 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 under the Parliament Acts, the office has since the early 20th century been effectively limited to members of the House of Commons. The Chancellor holds the formerly independent office of Master of the Mint as a subsidiary office.^[9]

Perquisites of the office

Official residence

The Chancellor's official residence, since 1828, is No. 11 Downing Street.^[10] In 1997, the then 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 living with him, including one born during his tenure) than Brown who was at that stage unmarried.

Dorneywood

Dorneywood is the summer residence that is traditionally made available to the Chancellor, though it is the Prime Minister who ultimately decides who may use it. Gordon Brown, on becoming Chancellor in 1997, refused to use it and the house, which is set in 215 acres (87 ha)^[11] of parkland, was allocated to Deputy Prime Minister John Prescott. It reverted to the Chancellor in 2007, then Alistair Darling.^[12]

Budget box

Budget box or Gladstone box, c. 1860

The Chancellor traditionally carries his Budget speech to the House of Commons in a particular red Despatch Box. The Chancellor's red briefcase is identical to the briefcases used by all other government ministers (known as ministerial boxes or "Despatch 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 Ewart Gladstone in 1853 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 Despatch Box 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, 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 cypher and crest and the Chancellor's title. In his first Budget, in March 2008, Alistair Darling reverted to using the original budget briefcase and his successor, George Osborne, continued this tradition for his first budget, before announcing that it would be retired due to its fragile condition.^[13] The key to the original budget box has been lost.^[14]

Budget tipple

By tradition, the Chancellor has been allowed to drink whatever he or she wishes while making the annual Budget Speech to parliament. This includes alcohol, which is otherwise banned under parliamentary rules.

Previous Chancellors have opted for whisky (Kenneth Clarke), gin and tonic (Geoffrey Howe), brandy and water (Benjamin Disraeli and John Major), spritzer (Nigel Lawson) and sherry and beaten egg (William Gladstone).^[15]

The recent Chancellors, George Osborne, Alistair Darling and Gordon Brown,^[16] opted for water. In fact Darling drank what was named "Standard Water" in reference to, and support of, the London Evening Standard newspaper's campaign to have plain tap water available in restaurants at no charge to customers.^[17]

Robe of office

The Chancellor has a robe of office,^[18] similar to that of the Lord Chancellor (as seen in several of the portraits depicted below). In recent times, it has only regularly been worn at Coronations, but some Chancellors (at least until the 1990s) have also worn it when attending the Trial of the Pyx as Master of the Mint. According to George Osborne, the robe (dating from Gladstone's time in office, and worn by the likes of Lloyd George and Churchill)^[19] 'went missing' during Gordon Brown's time as Chancellor.^[20]

List of Chancellors of the Exchequer

Chancellors of the Exchequer of England, c. 1221 – c. 1558

Name	Term of office		Monarch (Reign)
Eustace of Fauconberg Bishop of London	c. 1221		Henry III (1216–1272)
John Maunsell	1234
Ralph de Leicester	temp^[*] Henry III
Edward of Westminster	1248
Albric de Fiscamp	temp Henry III
John Chishull	1263	1265
Walter Giffard Bishop of Bath and Wells	1265	1266
Godfrey Giffard	1266	1268
John Chishull	1268	1269
Richard of Middleton	1269	1272
Roger de la Leye	temp Henry III
Roger de la Leye	temp Henry III		Edward I (1272–1307)
Geoffrey de Neuband	temp Edward I
Philip de Willoughby	1283	1305
John Benstead	1305	1306
John Sandale Bishop of Winchester	1307	1308	Edward II (1307–1327)
John of Markenfield	1309	1312
John Hotham Bishop of Ely	1312	1316
Hervey de Stanton	1316
Walter de Stapledon	1323
Hervey de Stanton	1324	1327
Adam de Harvington (or Herwynton)	1327	1330	Edward III (1327–1377)
Robert Wodehouse	1330	1331
Robert de Stratford Bishop of Chichester	1331	1334
John Hildesle	c. 1338
William de Everdon	1341
William Askeby Archdeacon of Northampton	1363
Sir Robert de Ashton	1375	1377
Sir Walter Barnham	1377	1399	Richard II (1377–1388)
Henry Somer	1410	1437	Henry IV (1399–1413)
			Henry V (1413–1422)
			Henry VI (1422–1461)
John Somerset	1441	1447
Thomas Browne	1440?	1450?
Thomas Witham	1454
Thomas Thwaites	1461		Edward IV (1461–1470)
Thomas Witham	1465	1469
Richard Fowler	1469	1471
Richard Fowler	1469	1471	Henry VI (1470–1471)
Thomas Thwaites	1471	1483	Edward IV (1471–1483)
William Catesby	1483		Edward V (1483)
William Catesby	1483		Richard III (1483–1485)
Sir Thomas Lovell	1485	1524	Henry VII (1485–1509)
Sir Thomas Lovell	1485	1524	Henry VIII (1509–1547)
John Bourchie 2nd Baron Berners	1524	1533?
Thomas Cromwell 1st Earl of Essex	1533	1540
Sir John Baker	1545	1558
			Edward VI (1547–1533)
			Mary I (1533–1558)

* ^ "temp" is short for tempore, i.e. "in the time [of]".