Budget Backgrounder: No room for manoeuvre? 

Thinking about Parliament, it is easy to miss the wood for the trees. While it is often associated with party political exchanges and topical debates on issues of the day, its core function could be reduced to just one thing: the determination of how government is funded and how the money it raises should be spent. All other policies, whether on policing, education or health, follow from the decisions made in the Budget. Without a budget there could be no army, no hospitals and no schools. In fact, there would not even be a Parliament, let alone a Prime Minister.

It is thus really hard to overestimate the role that the Budget plays in the nation’s political life. It is the single most important subject that Parliament regularly has to consider.

Given the far-reaching consequences of the Budget, one would expect the House of Commons’ contemplation of it to be a great moment. On the Continent, one often hears that the power to determine tax and spend policies is the “royal right” of a country’s Parliament. Although this may sound a bit lofty, it is hardly off the mark.

But things in Britain are different. As Westminster is preparing for Budget day 2008 – on Wednesday, 12 March – one could be forgiven a certain degree of cynicism. Not only will it again fail to be a Parliamentary moment to remember, it will probably be a day one will wish to forget immediately.

There are a number of reasons for this bleak outlook. First, the way the UK handles its budget is unique. Parliaments in other countries play a very active role in preparing, debating and controlling their budgets. The UK’s public finance decisions, on the other hand, are shrouded in secrecy.

When the Chancellor leaves Downing Street with his famous red briefcase, most MPs can only resort to intelligent guessing as to what is likely to be in it.