Budget Day

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Budget Day is the day that a government presents its budget to a legislature for approval, in a ceremonial fashion. It only exists in some countries of the world.

Contents

United Kingdom

In the United Kingdom, Budget Day is the day that the Chancellor of the Exchequer delivers the annual budget, first privately to the Cabinet and then publicly in a speech to the House of Commons. It is always aligned with the fiscal year, which itself in the UK is still aligned with the Julian Calendar. Nowadays, Budget Day occurs on a Wednesday 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. However, former chancellor Philip Hammond announced in the 2016 Autumn Statement that the budget would from 2018 be moved to October as an 'autumn budget' and the statement moved to March but as a less important convention. [1] [2] The last time the budget was held in the autumn to this timing came from 1993 to 1996, when Budget Day was also shifted from spring to autumn. [3]

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". [4] [5] [6]

Preparation

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 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. [1]

Presentation to the monarch

The monarch is the first person to be told of the Budget. Queen Elizabeth II customarily invited the Chancellor to dinner the day before Budget Day, where she was given an outline of the Budget. [1]

Presentation to the Cabinet

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 role of the First Lord of the Treasury). [1]

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: [1]

1945
Hugh Dalton removed a proposal to change the tax on fuel oil.
1951
Hugh Gaitskell responded to Cabinet pressure and abandoned his plans for a differential fuel tax.
1962
Cabinet persuaded Selwyn Lloyd to announce the early abolition of the tax on home owner-occupiers.
1981
The so-called "wets" in the Cabinet persuaded Geoffrey Howe to increase the state pension in line with inflation, which he had not wanted to do. (Margaret Thatcher recorded in her memoirs that "[t]he dissenters in the Cabinet ... had been stunned by the budget when they learnt its contents".)

The Chancellor's Speech and debate

The Chancellor'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, now usually around 12:30 but previously about 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 speech, N1 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". [4] [7] The debate is customarily presided over by the Chairman of Ways and Means instead of the Speaker. [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". [6] The longest continuous budget speech was delivered by William Ewart Gladstone on 18 April 1853 and lasted 4 hours and 45 minutes. The shortest was given by Benjamin Disraeli in 1867 and lasted 45 minutes. [9]

It is also a parliamentary tradition that whilst making the Budget Speech the Chancellor may drink whatever they wish, including alcohol which is otherwise forbidden. Past chancellors have opted for whisky (Kenneth Clarke), gin and tonic (Geoffrey Howe), brandy and water (Benjamin Disraeli), spritzer (Nigel Lawson) and sherry and beaten egg (William Ewart Gladstone). In the last 25 years, this tradition has fallen away, with Gordon Brown and subsequent chancellors opting for water. [10] [11] [12]

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 pounds which they propose to give away in concessions during the course of the Finance Bill debates". [2]

In practice, practical concerns dictate otherwise. Nigel Lawson reports, "[as] soon as MPs realise 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'". [4]

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 Parliament has been televised, TV news services have broadcast the Chancellor's speech live, as a "Budget special". [2]

Evening broadcast

Between 1952 and 2011, the Chancellor would, in the evening of Budget Day, make a television party political broadcast about the budget. Similar broadcasts were made, in response, by representatives of the major Opposition parties. All broadcasts were arranged through the normal parliamentary processes for arranging party election broadcasts. [1] [13]

This tradition was discontinued, starting with the 2012 budget, as part of wider changes to the scheduling of party political broadcasts. [14] The BBC defended its decision, saying that they originated from a time where filming the Budget Statement from inside the House of Commons was not possible, and the public would be able to access the information from various other outlets. [15]

List of Budget broadcasts

1950s
BudgetDateChancellorPartyDateShadow ChancellorPartyRef
1953 16 April R. A. Butler Conservative 17 April Hugh Gaitskell Labour [16] [17]
1954 8 April9 April [18] [19]
1955 21 April22 April [20] [21]
1956 18 April Harold Macmillan 19 April Harold Wilson [22] [23]
1957 9 April Peter Thorneycroft 10 April [24] [25]
1958 15 April Derick Heathcoat-Amory 16 April [26] [27]
1959 7 April8 April [28] [29]
1960s
BudgetDateChancellorPartyDateShadow ChancellorPartyRef
1960 4 April Derick Heathcoat-Amory Conservative 5 April Harold Wilson Labour [30] [31]
1961 17 April Selwyn Lloyd 18 April [32] [33]
1962 9 April10 April James Callaghan [34] [35]
1963 3 April Reginald Maudling 4 April [36] [37]
1964 14 April15 April [38] [39]
1965 6 April James Callaghan Labour 7 April Edward Heath Conservative [40] [41]
1966 3 May4 May Ian Macleod [42] [43]
1967 11 April12 April [44] [45]
1968 19 March Roy Jenkins 20 March [46] [47]
1969 15 April16 April [48] [49]
1970s
BudgetDateChancellorPartyDateShadow ChancellorPartyRef
1970 14 April Roy Jenkins Labour 15 April Ian Macleod Conservative [50] [51]
1971 30 March Anthony Barber Conservative 31 March Roy Jenkins Labour [52] [53]
1972 21 March22 March [54] [55]
1973 6 March7 March Denis Healey [56] [57]
Mar 1974 26 March Denis Healey Labour 27 March Robert Carr Conservative [58] [59]
Nov 1974 12 November13 November [60] [61]
1975 15 April16 April Geoffrey Howe [62] [63]
1976 6 April7 April [64] [65]
1977 29 March30 March [66] [67]
1978 11 April12 April [68] [69]
Apr 1979 3 April4 April [70] [71]
Jun 1979 12 June Geoffrey Howe Conservative 13 June Denis Healey Labour [72] [73]
1980s
BudgetDateChancellorPartyDateShadow ChancellorPartyRef
1980 26 March Geoffrey Howe Conservative 27 March Denis Healey Labour [74] [75]
1981 10 March11 March Peter Shore [76] [77]
1982 9 March10 March [78] [79]
1983 15 March16 March [80] [81]
BudgetDateChancellorPartyDateShadow ChancellorPartyDateSpokespersonPartyRef
1984 13 March Nigel Lawson Conservative 14 March Roy Hattersley Labour 15 March Roy Jenkins SDP-Liberal Alliance [82] [83] [84]
1985 19 March20 March21 March David Steel [85] [86] [87]
1986 18 March19 March20 March Roy Jenkins [88] [89] [90]
1987 17 March18 March19 March [91] [92] [93]
1988 15 March16 March John Smith 17 March Alan Beith [94] [95] [96]
1989 14 March15 March16 March Social and Liberal Democrats [97] [98] [99]
1990s
BudgetDateChancellorPartyDateShadow ChancellorPartyDateSpokespersonPartyRef
1990 20 March John Major Conservative 21 March John Smith Labour 22 March Alan Beith Liberal Democrats [100] [101] [102]
1991 19 March Norman Lamont 20 March21 March [103] [104] [105]
1992 10 March11 March12 March [106] [107] [108]
Mar 1993 16 March17 March Gordon Brown 18 March [109] [110] [111]
Nov 1993 30 November Kenneth Clarke 1 December2 December [112] [113] [114]
1994 29 November30 November1 December Malcolm Bruce [115] [116] [117]
1995 28 November29 November30 November [118] [119] [120]
1996 26 November27 November28 November [121] [122] [123]
1997 2 July Gordon Brown Labour 3 July Michael Heseltine Conservative 4 July [124] [125] [126]
1998 17 March18 March Peter Lilley 19 March [127] [128] [129]
1999 9 March10 March Francis Maude 11 March [130] [131] [132]
2000s
BudgetDateChancellorPartyDateShadow ChancellorPartyDateSpokespersonPartyRef
2000 21 March Gordon Brown Labour 22 March Michael Portillo Conservative 23 March Matthew Taylor Liberal Democrats [133] [134] [135]
2001 7 March8 March9 March [136] [137] [138]
2002 17 April18 April Michael Howard 19 April [139] [140] [141]
2003 9 April10 April11 April [142] [143] [144]
2004 17 March18 March Oliver Letwin 19 March Vince Cable [145] [146] [147]
2005 16 March17 March18 March [148] [149] [150]
2006 22 March23 March George Osborne 24 March [151] [152] [153]
2007 21 March22 March23 March [154] [155] [156]
2008 12 March Alistair Darling 13 March14 March [157] [158] [159]
2009 22 April23 April24 April [160] [161] [162]
2010s
BudgetDateChancellorPartyDateShadow ChancellorPartyDateSpokespersonPartyRef
March 2010 24 March Alastair Darling Labour 25 March George Osborne Conservative 26 March Vince Cable Liberal Democrats [163] [164] [165]
June 2010 22 June George Osborne Conservative 23 June Alastair Darling Labour The Liberal Democrats served in the coalition government,
and did not broadcast a response to the budget during
their time in office.		 [166] [167]
2011 23 March23 March Ed Balls [168] [169]

Aftermath

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 either from Budget Day itself or from the start of the fiscal year. [170]

Ireland

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 ]

The day itself is very similar to Budget Day in the United Kingdom. In the early afternoon, the Minister for Finance will normally hold a photocall in the car park of Leinster House, with the traditional budget briefcase (in recent years, a floppy disk or CD-ROM purportedly containing the contents of the Budget speech has often been used instead). At 15:45, the Minister for Finance presents the budget speech in Dáil Éireann. The speech, which lasts approximately one hour, is normally carried live on Raidió Teilifís Éireann radio and television. The speech contains the main taxation and other fiscal measures to be employed over the next calendar year. The Opposition Front Bench spokesperson on Finance normally replies to the Budget speech first, followed by the spokespersons on finance of other opposition parties. A vote on supply normally takes place before midnight on the night of the budget, with changes to excise duties on alcohol, tobacco, and petrol taking place from midnight. Most other measures are spelt out in greater detail in the Finance Bill which is introduced in the Oireachtas following the budget, eventually becoming the Finance Act.

Netherlands

Minister of Finance Onno Ruding carrying the budget briefcase, Prinsjedag 1983 Onno Ruding 1983.jpg
Minister of Finance Onno Ruding carrying the budget briefcase, Prinsjedag 1983

In the Netherlands, the presentation of the budget is made on the same day as when the monarch gives the speech from the throne; this is held on the third Tuesday of September, which is called Prinsjesdag (Little Princes' Day). After the monarch gives the speech from the throne, announcing the government's agenda for the coming year, the National Budget and the Budget Memorandum are presented later that day to the House of Representatives and are brought in a ceremonial briefcase by the minister of finance. [171] This briefcase tradition was introduced in 1947 by Piet Lieftinck in imitation of the British tradition. [172]

Sweden

Budgetpromenaden, or the budget walk, is a traditional biannual procession when the Swedish finance minister walk with a copy of the budget bill from the Ministry of Finance to the Riksdag (the parliament), a distance of 400 metres (440 yd).


Hong Kong

In Hong Kong the Financial Secretary introduces the appropriations bill for first reading a few weeks before the beginning of a fiscal year on 1 April, with a speech to move the motion for first reading of the bill. In 2002 the tradition for the Secretary for the Treasury to deliver a spending announcement was abolished. The budget day typically falls on a Wednesday in early March, but since 2000 it has been moved to a Wednesday in late February. A resolution for temporary appropriations is usually moved, since the third reading of the appropriations bill usually takes place after 1 April.

India

The Union Budget of India, referred to as the Annual Financial Statement [173] in Article 112 of the Constitution of India, is the annual budget of the Republic of India, presented each year on the very first day of February by the Finance Minister of India in Parliament. The budget, which is presented by means of the Finance Bill and the Appropriation bill has to be passed by the House before it can come into effect on 1 April, the start of India's financial year.

Pre-liberalisation

The first Union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947. [174]

The Union budgets for the fiscal years 1959–61 to 1963–64, inclusive of the interim budget for 1962–63, were presented by Morarji Desai. [174] On 29 February in 1964 and 1968, he became the only finance minister to present the Union budget on his birthday. [175] Vyas presented budgets that included five annual budgets, an interim budget during his first stint and one interim budget and three final budgets in his second tenure when he was both the Finance Minister and Deputy Prime Minister of India. [174]

After Desai's resignation, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the first woman to hold the post of the finance minister. [174]

Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio, presented the annual budgets for 1982–83, 1983–84 and 1984–85. [174]

Rajiv Gandhi presented the budget for 1987–89 after V P Singh quit his government, and in the process became only the third Prime Minister to present a budget after his mother and grandfather. [174]

N. D. Tiwary presented the budget for 1988–89, S B Chavan for 1989–90, while Madhu Dandawate presented the Union budget for 1990–91. [174]

Manmohan Singh became the Finance Minister but presented the interim budget for 1991–92 as elections were forced. [174]

Due to political developments, early elections were held in May 1991 following which the Indian National Congress returned to political power and Singh, the Finance Minister, presented the budget for 1991–92. [174]

Post-liberalisation

Manmohan Singh, in his next annual budgets from 1992 to 1993, opened the economy, [176] encouraged foreign investments and reduced peak import duty from 300 plus percent to 50 percent. [174]

After elections in 1996, a non-Congress ministry assumed office. Hence the final budget for 1996–97 was presented by P. Chidambaram, who then belonged to Tamil Maanila Congress. [174]

Following a constitutional crisis when the I. K. Gujral Ministry was on its way out, a special session of Parliament was convened just to pass Chidambaram's 1997–98 budget. This budget was passed without a debate. [174]

After the general elections in March 1998 that led to the Bharatiya Janata Party forming the central government, Yashwant Sinha, the then Finance Minister in this government, presented the interim and final budgets for 1998–99. [174]

After general elections in 1999, Sinha again became the finance minister and presented four annual budgets from 1999–2000 to 2002–2003. [174] Due to elections in May 2004, an interim budget was presented by Jaswant Singh. [174]

Time of budget announcement

Until the year 2000, the Union Budget was announced at 5 pm on the last working day of the month of February. This practice was inherited from the Colonial Era when the British Parliament would pass the budget in the noon followed by India in the evening of the day. It was done because when of the time difference between the two nations. When there is evening in India, Britain experiences morning. Therefore, the colonial government announced in the afternoon. By the time, it would be 28 or 29 February, UK would date 1 March

It was Mr.Yashwant Sinha, the then Finance Minister of India in the NDA government (led by BJP) of Atal Bihari Vajpayee, who changed the ritual by announcing the 2001 Union Budget at 11 am. [177]

Date of budget announcement

Until the year 2016, the Union Budget was presented in the Lok Sabha on the last working day of February.

It was Mr. Arun Jaitley, the Minister of Finance in the BJP led NDA Government under the Prime Ministership of Mr. Narendra Modi, who changed the date of the Annual Budget of 2017 to the first working day of February.

Additionally, the Railway Budget was also merged with the General Budget after 92 years in 2017. [178]

United States

The United States does not have a Budget Day. [179] Instead the legislation that establishes the federal government's budget originates in the Congress, [180] although the executive branch traditionally makes a proposal in advance.

Footnotes

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