|Reports to The Prime Minister||Seat Westminster, London|
|Style The Right Honourable
Member of British Cabinet Privy Council National Security Council
Residence 11 Downing Street Westminster, London United Kingdom
Appointer The British Monarch on advice of the Prime Minister
The Chancellor and Under-Treasurer of Her Majesty's Exchequer, commonly known as the Chancellor of the Exchequer, 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.
- Roles and responsibilities
- Fiscal policy
- Monetary policy
- Ministerial arrangements
- Official residence
- Budget box
- Budget tipple
- Robe of office
- Chancellors of the Exchequer of England c 1221 c 1558
- Chancellors of the Exchequer of the United Kingdom 18171902
The chancellor is responsible for all economic and financial matters, equivalent to the role of Secretary of the Treasury or Minister of Finance 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. 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 and survived the Norman conquest of England. 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. 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 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 Chief Baron of the Exchequer, a defunct judicial office.
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."
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. 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 Budget, which is summarised in a speech to the House of Commons. Traditionally the budget speech was delivered on Budget Day, often a Tuesday in March, as 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 preceded by an annual 'Autumn Statement', now called the Pre-Budget Report, which forecasts government spending in the next financial year and also announces new financial measures. The Autumn Statement usually takes place in November or December. It is also referred to as the "mini-Budget". The 1997, 2001, 2002, 2003, 2006, 2007, 2008, 2012 and 2016 Budgets were all delivered on a Wednesday.
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. 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.
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, the office is effectively limited to members of the House of Commons.
The Chancellor's official residence, since 1828, is No. 11 Downing Street. 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 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) of parkland, was allocated to Deputy Prime Minister John Prescott. It reverted to the Chancellor in 2007, then Alistair Darling.
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 Ewart 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, 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. 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. The key to the original budget box has been lost.
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), spritzer (Nigel Lawson) and sherry and beaten egg (William Gladstone).
The recent Chancellors, George Osborne, Alistair Darling and Gordon Brown, 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.
Robe of office
The Chancellor has a robe of office, 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) 'went missing' during Gordon Brown's time as Chancellor.
Chancellors of the Exchequer of England, c. 1221 – c. 1558
* ^ "temp" is short for tempore, i.e. "in the time [of]".
Chancellors of the Exchequer of the United Kingdom, 1817–1902
Although the Kingdoms of Great Britain and Ireland had been united by the Acts of Union 1800 (39 & 40 Geo. III c. 67), the Exchequers of the two Kingdoms were not consolidated until 1817 under 56 Geo. III c. 98. For the holders of the Irish office before this date, see Chancellor of the Exchequer of Ireland.