Budget Day is the day that a government presents its Budget to a legislature for approval, typically in a ceremonial fashion. It only exists in some countries of the world. In particular, the United States does not have a Budget Day.[1] There, the legislation that establishes the federal government's budget originates in the Congress,[2] although the executive branch traditionally makes a proposal in advance, often amid some ceremony.
In Ireland, Budget Day is the annual statement to the Dáil by the Minister for Finance, made in the first week of December. It sets out the budgetary targets for the following year and consists of (i) a Financial Statement to the Dáil, (ii) Budgetary Measures (a list of budgetary changes detailing the cost/yield of same), (iii) Budget Statistics and Tables and (iv) various financial resolutions.[citation needed]
In the United Kingdom, Budget Day is the day that the Chancellor of the Exchequer delivers the Budget, first privately to the Budget Cabinet and then publicly in a speech to the House of Commons. It is always aligned with the fiscal year, which itself in the U.K. is still aligned with the Julian Calendar. Nowadays, Budget Day occurs on a Tuesday in March, before the start of the new fiscal year, although in the early 20th century it was delivered in April, after the start of the fiscal year.[3][4]
Chancellors have had varying opinions on Budget Day. Nigel Lawson wrote, in his memoirs, that it is "best described as an enjoyable ordeal". Harold Macmillan, in explaining his surprise at being appointed Chancellor, said that he thought Budget Day to be "rather like a school Speech Day: a bit of a bore, but there it is".[5][6][7]
The Chancellor, Treasury ministers, and officials will have been working on the Budget some time in advance of Budget Day. Geoffrey Howe initiated the tradition of a weekend meeting, for all Treasury ministers and officials, outside of London and some time in advance of Budget Day, for discussing the Budget. This meeting is now a customary part of the annual Budget preparations.[3]
The monarch is the first person to be told of the Budget. Queen Elizabeth II has customarily invited the Chancellor to dinner the day before Budget Day, where she is given an outline of the Budget.[3]
The Budget is presented to the Cabinet before being presented to Parliament. Formally, the Cabinet has power to amend the Budget. In practice, however, this is made impossible by the fact that the Budget Cabinet meets on the very morning of Budget Day itself, far too late for any but very minor changes to be effected. The Budget is presented to the Cabinet largely as a fait accompli by the Chancellor, the various junior Treasury ministers, and the Prime Minister (in the rôle of the First Lord of the Treasury).[3]
This swiftness is justified on the grounds of secrecy. It is considered essential the budget details not leak before the Chancellor's public speech. (In 1936, James Henry Thomas famously leaked Budget details after the Budget Cabinet, which at the time was being held five days before Budget Day, which had been until that point the traditional period between the Budget Cabinet and Budget Day itself.) Little objection has apparently been raised by the Cabinet to this. The only times that the Budget Cabinet has raised objections causing last-minute amendment to the Budget have been:[3]
The Chanceller's Speech in the House is given immediately after what is usually a somewhat lacklustre Prime Minister's Question Time, it being largely overshadowed by what is seen as the main Parliamentary event of the day, usually around 15:30. Nigel Lawson reports that after the press photo-call at 15:15, where like all chancellors he would hold the red dispatch box, purportedly containing the budget speechN1, aloft; he used to spend time in his room, just behind the Speaker's chair, collecting his thoughts, before entering the house at 15:25, usually to the sound of "a roar from the Government benches".[5][8]
It has varied in length over the years. Macmillan remarked that he "would try not to prolong the agony", and once opined of the speech that he did not think it "necessary to start with the usual long review of the events of the last financial year".[7]
The Speech is followed by a debate, which can last for several days. In theory, the report and the financial proposals that the Chancellor sets out in the speech are immediately considered and debated by the House, with the Chancellor in attendance to respond to arguments and, occasionally, to amend proposals. Young reports one Member of Parliament observing that Chancellors customarily "keep up their sleeves one or two million points which they propose to give away in concessions during the course of the Finance Bill debates".[4]
In practice, practical concerns dictate otherwise. Nigel Lawson reports that "[as] soon as MPs realize that the tax announcements are over they dash out of the Chamber to get their copies of the Financial Statement and Budget Report — the 'Red Book'".[5]
Similarly, there is a rush by the news services to report Budget items. Young observed in the 1960s that newspapers were "on the street, within minutes it seemed, bringing the glad tidings: TUPPENCE OFF BEER. INCOME TAX DOWN.". Since the televisation of Parliament, television news services have broadcast the Chancellor's speech live, as a "Budget special".[4]
Since 1952, the Chancellor has, in the evening of Budget Day, made a television party political broadcast about the budget. Similar broadcasts are made, in response, by representatives of the major Opposition parties. All broadcasts are arranged through the normal Parliamentary processes for arranging party election broadcasts.[9][3]
The Finance Bill proper is only itself presented to Parliament some time after Budget Day, and is debated for days or even weeks afterwards. It is common for the bill to be passed, becoming the Finance Act, some time in late July. The Act back-dates its provisions, so that they take effect from either from Budget Day itself, or from the start of the fiscal year.[10]