A quick guide to the Budget

Posted on: 17 March 2010 by Mark O'haire

What the Budget is and why it's so important.

The Budget is the time of year when the chancellor of the exchequer (currently Alistair Darling), waves a big red briefcase to the cameras outside Downing Street. He then hotfoots it - or rather is transported in a chauffeured car - to the Houses of Parliament and makes a speech to his fellow MPs outlining the government's tax, growth and expenditure predictions for the upcoming year.

So why should we care?

Tax and public finances are admittedly not very interesting subjects... alright, they're downright dull, but the contents of the Budget will have a direct impact on your life and finances over the next 12 months. The chancellor's speech will determine how much you pay for certain goods, such as beer and cigaretes, and also how much is likely to come out of your pay packet in income tax next year. In short, it will affect the weight of your wallet over the next 12 months. In the current recession, who gets taxed what and who this money is eventually spent on matters more than ever.

The size of the problem

Since taking over from Gordon Brown, Darling has presided over the collapse of the British economy. It started with the credit crunch and the run on a Northern Rock and led on to a series of collapses, bail-outs, nationalisations and soaring unemployment. While it is debateable whether he could have done anything to prevent these events, Darling will have less money to spend as a result of them and is sure to be taken to task by opposition parties whatever he announces.

Why's he waving a red box about?

The red box, or briefcase, brandished by the chancellor on his way to the Commons on Budget day every year contains a copy of the speech he intends to read out to his fellow MPs.

A red briefcase was first used by William Gladstone to transport his Budget speech in April 1860. Amazingly, the original box was used by subsequent chancellors until 1965, when James Callaghan replaced the tattered old briefcase with a shiny new one.

Standards of craftsmanship had obviously deteriorated over the years, because Gordon Brown sought fit to have a new red box constructed just 32 years later in July 1997. Gordon's box was made by industrial trainees at a submarine dockyard in Fife, Scotland and is constructed of yellow pine, covered in scarlet leather and embossed with the royal crest and initials.

For his first Budget, Alistair Darling decided to go back to basics, using the original Gladstone box to carry his speech.

What's Alistair going to say?

This is the big question. With a general election looming, this is a key Budget. Gordon Brown has already announced that the government is committed to halving Britain's record £178 billion deficit within four years. However, there are unlikely to be massive cuts.

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