The Chancellor and Under-Treasurer of Her Majesty's Exchequer, commonly known as the
Chancellor of the Exchequer, or simply the Chancellor, 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.
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.
== Second Lord of the Treasury == The holder of the office of Chancellor of
the Exchequer is ex officio Second Lord of the Treasury as a member of the commission
exercising the ancient office of Lord High Treasurer.
As the Second Lord, his official residence is 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.
Since 1827, the chancellor has always simultaneously held the office of Second Lord of the Treasury
when that person has not also been the prime minister.
== 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.
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.
The budget is a state secret until the chancellor reveals it in his speech to Parliament.
Hugh Dalton, on his way to giving the budget speech in 1947, inadvertently blurted out
key details to a newspaper reporter, and they appeared in print before he made his speech.
Dalton was forced to resign.
=== 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.
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.
Whilst not continuously in use, there can also be appointed a Commercial Secretary to
the Treasury and an Exchequer 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 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.
== Perquisites of the office ==
=== Official residence ===
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 ===
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.
=== Budget box ===
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.
The key to the original budget box has been lost.
=== 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).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.
== List of Chancellors of the Exchequer ==
=== Chancellors of the Exchequer of England (c.
1221 – c. 1558) ===
=== Chancellor of the Exchequer of England (c. 1558 – 1708) ===
=== Chancellors of the Exchequer of Great Britain (1708–1817) ===
=== Chancellors of the Exchequer of the United Kingdom (1817–present) ===
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.
== See also ==
Shadow Chancellor of the Exchequer List of Lord High Treasurers of England and
Great Britain
== Notes