The chancellor of the exchequer is the minister in charge of finance and the UK economy. It is considered to be the second most important job in the country after prime Minister. The Chancellor traditionally lives in no.11 Downing Street.
Roles of the Chancellor of the Exchequer
The chancellor is free to set tax rates and government spending. He may alter tax and spending to influence the economy. e.g. boost AD in a recession. He may also use fiscal policy to increase investment in certain areas, for example, increase spending on health and education
The chancellor used to set interest rates, but, now interest rates are set by the Bank of England. However, if the Bank of England fail to meet the government’s inflation target of 1-3% the Bank of England have to write an explanatory letter to the Chancellor.
Preparing the Budget
This is one of the political highlights of the year, where the chancellor sets out his plans for spending and taxation.
Recent Chancellors of the Exchequer include
- Nigel Lawson (conservative)- see Lawson Boom
- John Major (cons)
- Norman Lamont (Cons)
- Kenneth Clarke (Cons)
- Gordon Brown (Lab) – Economic Record of Gordon Brown
- Alistair Darling (Lab)
- George Osborne (Cons)