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 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.

The Chancellor is third oldest major state office in English and United Kingdom 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, and is generally second only to the Prime Minister in political power.

The office should not be confused with those of the Lord High 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.

1 Roles and Responsibilities
2 Trivia
3 List of Holders of the Office since 1559
4 See also

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Roles and Responsibilities

Image:Treasury.london.arp.jpg 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 and 2003 Budgets were 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. [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.

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.

Image:11 Downing Street.jpg 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.

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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 resides in the apartment in the attic of No. 10, 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 intrusted with a certain amount of misery which it is his duty to distribute as fairly as he can."

Image:Old Budget Box.png

The Chancellor traditionally carries his Budget speech to the House of Commons in a particular red briefcase. The Chancellors red briefcase is identical to the briefcases used by all other government ministers (known as "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 1997, when it was replaced.

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