The Chancellor of the Exchequer – UK England
Abbreviated simply as the ‘Chancellor,’ the Chancellor of Exchequer is the head of Her Majesty’s Treasury and a very highly ranked Minister of the Crown within the jurisdiction of the United Kingdom. The occupant of the office effectively occupies one of four great offices of the state.
Key Points on The Office of The Chancellor of The Exchequer
- The Chancellor of the Exchequer is a member of the Cabinet Privy Council as well as the National Security Council
- The Chancellor of the Exchequer reports to the Prime Minister
- The Chancellor’s official residence is at 11 Downing Street
- The Occupant of the position is appointed by the Crown
- on advice of the current Prime Minister
- The term length for the position is purely at Her Majesty’s discretion
- The Salary for the position is £71,090 (excluding the £81,932 salary for being Member of Parliament)
- The Incumbent Chancellor’ of the Exchequer is Rishi Sunak appointed to the position on 13 February 2020
The role of the Chancellor of the Exchequer is equivalent to that of a minister of finance in other countries. Thus, the Chancellor oversees all financial and economic matters. During the 18th century and the earlier parts of the 19th century, it was very common for the prime minister to occupy the position of the Chancellor of the Exchequer if the prime minister sat in the Commons. In 1923, Stanley Baldwin became the last prime minister to also serve as the Chancellor of Exchequer. Previously, when the position of the Chancellor of the Exchequer was vacant, it wasusually the Lord Chief Justice that acted as the Chancellor, though on a pro tempore basis. In 1834, Lord Denman became the last Lord Chief Justice to also serve as the Chancellor.
The Chancellor’s office has become the most powerful after the office of the prime minister. It is the third oldest top-ranking state office in British and English history. The Exchequer was an English medieval institution that was responsible before the auditing and collection of Royal revenues and the responsibility of the Chancellor, though significantly enhanced today, was primarily to oversee this institution. Whoever was the Chancellor was vested with the responsibility of overseeing fiscal policy, and consequently public spending and taxation across departments of the government. The office was previously also in charge of monetary policy until 1997 when the Bank of England took control of its interest rates.
Influence of The Chancellor of The Exchequer Over Fiscal Policy
The office of the Chancellor has significant influence over other government departments because the Treasury which it oversees, is responsible for setting limits for departmental expenditures. Nonetheless, the actual amount of power an occupant of the office wields in this aspect may depend on his status within his party, his individual forcefulness and his relationship with the prime minister. For instance, Gordon Brown who was a Chancellor when Labor was in government back in 1997 had an enormous power base in his party. Partly because of this, then prime minister, Tony Blair chose to retain him in the office throughout his one decade in office as prime minister of the United Kingdom. This made Brown one of the most dominant and powerful occupant of the office, eventually becoming the longest-serving Chancellor since the 1832 reform Act. Trends of this nature is what has over the years cemented the office of the Chancellor as a pseudo second in command among ministers, above other offices of relatively equal importance, including that of the Home Secretary and the Foreign Secretary.
One of the key responsibilities of the Chancellor is framing the annual budget. The first of such is the Autumn Budget, (sometimes called Budget Day) which presents a forecasts of government spending in the upcoming financial year while announcing new financial measures. The next one is a mini-budget, officially called a Spring Statement. The UK’s tax year still uses the old Julian end of year. Since 1993, the Budget was in spring and was preceded by a yearly autumn statement ( this was previously known as a pre-budget report). An Autumn Statement was typically happened in December or earlier in November. The 1997 budget, that of 2001 through 2003, then 2006 through 2008, and that of 2012 and 2016 were delivered on Wednesdays, usually summarized in a speech before the House of Commons.
The Budget is usually considered a State secret until it is revealed by the Chancellor in a speech before the Parliament. In 1947, Hugh Dalton while talking to a newspaper reporter on his was to present the budget before the Parliament, inadvertently revealed some key details of the budget. The details were published before the Chancellor made his way to the Parliament to present his speech. Dalton was forced to resign as a result of the blunder.
Influence of The Chancellor of The Exchequer Over Monetary policy
Although the Bank of England has independent control over interest rates, the Chancellor of the Exchequer nonetheless plays a vital role in monetary policy. The Occupant of the office sets inflation targets that the Bank of England must set its interest rates to meet. According to the 1998 Bank Of England Act, the Chancellor of the Exchequer has the authority to appoint four of the nine members that make up the Bank of England’s Monetary Policy Committee.
These members are sometimes called the external members. The occupant of the position also has enormous influence over who become the Governor and Deputy Governor of the Bank of England. The Chancellor also has the right of consultation regarding the appointment of two monetary policy committee members within the Bank. The Bank of England Act also gives the government the power to issue instructions to the Bank of England regarding setting of interest rates in extreme circumstances, although for a limited duration of time. However, as at 31 October 2020, this emergency power has never been exercised.
The Residence of The Chancellor of The Exchequer
The Chancellor doesn’t really have an official London residence per say, however since 1828, the occupant’s role as Second Lord of the Treasury means he lives in the official residence earmarked for the Second Lord at No. 11 Downing Street. In 1997, The first Lord, Tony Blair and second Lord, Gordon Brown, switched apartments. Gordon Brown’s apartment at No. 11 downing street as the Chancellor, was much bigger than Blair’s who was married and living with children. Brown was unmarried and Blair’s smaller apartment suited his needs just fine, so the pair agreed to a swap.
Traditionally, Donerwood is the summer residence made available to the Chancellor, although the prime minister has the final say on whether the Chancellor can use it. After becoming Chancellor in 1997, Gordon Brown refused to use it and residence situated in 215 acres of parkland was offered to then Deputy prime minister, John Prescott. When Alistair Darking became Chancellor in 2007, the residence was reverted to the occupant of the Chancellor’s office.
The budget speech is traditionally carried to the House of Commons by the Occupant of the office of the Chancellor of the Exchequer in a special red Despatch Box. This tradition has been honored for several decades. The red briefcase used for transporting the budget speech is identical to those used by government ministers to transport official documents. The Chancellor’s red briefcase is better known because it is traditionally displayed to the press before the budget speech is delivered to the House.
William Gladstone was the first to use the original red briefcase in 1853. It was then continuously used until 1965 when James Callaghan broke tradition by introducing a new red briefcase. Prior to Gladstone’s original red briefcase, varying designs of the red Despatch Box were used. The practice if using the red Despatch Box is traced back to the 16th century when the representative of Queen Elizabeth I, Francis Throckmorton gave Bernardino de Mendoza, the then Spanish Ambassador a specially designed red briefcase that contained black puddings.
Gordon Brown subsequently became the next Chancellor to break tradition by using a different box for the Budget. The new box had the Chancellor’s crest and title embedded on it. However, in 2008, Alistair Darling once again adopted the original budget briefcase. George Osborne, his successor continued using the original budget briefcase until it was later retired due to its fragile condition. It was subsequently reported that the Original budget briefcase’s key had been lost.
Traditionally, the Chancellor is always allowed to take whatever drink he or she wants while delivering the Budget speech before the Parliament. While drinking alcohol is banned in Parliament, an exception is usually made for the Chancellor during the Budget speech. Several Chancellors have taken whiskey, brandy, tonic and gin as well as spritzler. However, more recently, Chancellors have mostly opted for water. Alistair Darling drank what was labelled ‘Standard water’ in support of the campaign to for restaurants to offer clean tap water to their customers at no charge.