Labour will deliver its first Budget since 2010 today. All eyes will be on Rachel Reeves, the first female Chancellor to ever deliver the major financial announcement.
At 12:30pm on Wednesday she will take to the despatch box in the House of Commons to set out the next year’s plan for the Treasury. As reported by the Mirror, the Budget statement will take place after Keir Starmer takes part in his weekly Prime Minister’s Questions session in the Commons chamber.
After Labour were elected to Government in July, it is a major opportunity for the party to set out its plan for the country. Here we take a look at what the Budget is and why it is important, as well as the weird traditions and customs linked to it.
What is the Budget?
The Budget is a statement made to MPs presenting any changes to tax and spending. The Office for Budget Responsibility (OBR) publishes its independent analysis of the UK economy on the same day. The Treasury publishes a report alongside its Budget, with more detail on the decisions made and how much everything costs.
The Chancellor makes the statement to MPs in the House of Commons. It is usually a lively affair and, depending on the announcements made, the chamber is often full of politicians groaning or cheering. MPs may need to approve any immediate changes to taxes after the Chancellor’s speech. There is then a debate in the chamber that usually lasts four days.
MPs are asked to agree to resolutions to approve tax proposals after the date. A Finance Bill which gives permanent legal power to the Budget’s plans is then introduced.
Is the Budget important?
Budgets are a defining moment of the Government’s year, tenure and place in history. In 2022, Liz Truss’s disastrous mini-Budget which contained £45billion of unfunded tax cuts ended up being her ultimate downfall. David Cameron and George Osborne’s first Budget, meanwhile, was famed for introducing deep austerity cuts – something that has come to define their time in government.
The heat is certainly on with this being Labour’s first Budget since 2010. It is a major opportunity for the party to set out its plan for the country. Keir Starmer has pledged that, after 14 years of Tory chaos, it will be the first step in getting the country back on track.
When is the Budget?
The Budget is considered the Government’s main financial announcement of the year and should take place in the Autumn. As the OBR publishes financial statements twice a year, the Chancellor also presents a financial response in the Spring. Chancellor Ms Reeves, however, is reportedly expected to announce that Budgets will take place in the Autumn and that there will be no tax changes at the next Spring statement.
The Budget this year will be presented on October 30. The morning leading up to the Budget speech usually goes the same way. Ms Reeves will be photographed in the morning outside No11 Downing Street, the official residence of the Chancellor, with the traditional red box containing the Budget speech. PMQs will then take place at midday, with the Budget speech to take place afterwards at 12:30pm.
The timing of Budget announcements can sometimes vary depending on the state of the Government or the rest of society. For instance there were three major financial statements during 2020 due to the pandemic. After Liz Truss became PM In September 2022, a mini-Budget was presented to the Commons. Two months later Jeremy Hunt’s Autumn Statement – that appeared a traditional Budget but was called something different – took place to reverse the damage of Truss’s announcement.
What are the Budget traditions?
One of the more unusual Parliamentary customs is that the Chancellor is the only MP allowed to drink alcohol in the Commons – but only when delivering the Budget.
In (fairly) recent times Tory Ken Clarke drank whisky, while Geoffrey Howe sipped a gin and tonic as he addressed the nation’s finances. Go back even further and you’ll find William Ewart Gladstone glugging a sherry and beaten egg.
All the Chancellors since Gordon Brown, however, haven’t taken advantage, opting for water instead. Ms Reeves is not expected to have an alcoholic drink to help her through either.
Budget Day is also notable for the use of a red box containing the speech. Gladstone’s was carried by Chancellors for more than 100 years, between 1860 and 1965. Mr Brown commissioned a new one in 1997, but George Osborne used Gladstone’s for his speech in 2010.
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