What is the Budget?

Dan Moore / 16 March 2015 ( 01 March 2016 )

Every year the Chancellor of the Exchequer reveals how the Government plans to spend the country's money in the following 12 months and, equally importantly, how it intends to raise that money. Dan Moore explains what the budget is and how it impacts on our lives.

Each spring the Chancellor of the Exchequer leaves 11 Downing Street with a scarlet dispatch box in hand and makes his way to the House of Commons. This is his day, and it’s an important one, as he will deliver the Budget.

On Wednesday 18 March, George Osborne will stand before the House of Commons at the dispatch box and deliver the Budget, which spells out what the government will spend and hope to save over the forthcoming year.

What happens during the Budget?

He is free to take an alcoholic drink, although these days that’s unlikely, as is the chance that he will use the iconic 1860 briefcase, first used by William Gladstone. Instead, we can expect Osborne to be the very model of a modern fiscal major general – to an extent.

Despite the cameras, mobile phones on silent and the numerous microphones some things don’t change, and the Budget will follow a tried and tested pattern. Bets are laid on how long it will last, but you can expect it to carry away the best part of an hour, and form two parts.

The first half will comprise a roundup of the government’s achievements of the past 12 months. This is your chance to put the kettle on, as there is nothing you will not have heard before. The second half is where we find out who the winners and losers will be in the following year. 

What can we expect?

The Budget focuses mainly on changes to taxes, benefits, duties – typically on fuel, tobacco and alcohol – but can veer into other areas.

Between sips of mineral water, we can expect the Chancellor to reinforce pledges he made during the Autumn Statement, which is the pre-Budget speech he makes each November. Back then the big news centred on major changes to pensions, which will come into force this April.

There will be other elements to watch out for – for instance, it’s been widely touted that Mr Osborne will use the Budget to crack down on tax evasion.

On the big day

Come Wednesday, George Osborne will leave 11 Downing Street at around half eleven. He will be snapped by Fleet Street’s finest and make his way to the Palace of Westminster.

At around 12.30pm, he’ll stand before the dispatch box and lay out the government’s financial plans for the next year. This is his time, and he cannot be interrupted.

Once he sits down the Leader of the Opposition, Ed Miliband, will be given the opportunity to respond. His views will be recorded, but the fact of the matter is the Budget will pass through the Commons and receive Royal Assent.

Why this Budget is different?

Unlike most other Budgets this one may have a short sell-by date. If the Coalition loses the General Election, a new administration will probably draw up its own financial plan for the coming year, and we’ll see another man or perhaps a woman – for the first time – raise the scarlet box on the steps of 11 Downing Street, before crossing the road to set out the government’s financial vision for the next 12 months.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.