what on earth is the UK Budget??????? oO)
The government has to present a credible budget just as a citizen or a business does to show what they will spend and on what. They also have to show where the money will come from.
For example: Joe Bloggs earns £100 a week and his mum gives him £40 per week, here is a possible weekly budget for him:
Income: ------------------------------------------------- Expenditure:
Salary: £100-------------------------------------------- Food: £30
Mum's subsidy: £40---------------------------------- Rent: £70
--------------------------------------------------------------Bills: £40
-------------------------------------------------------------- Tax: £35
--------------------------------------------------------------Other: £30
Total: £140 ---------------------------------------------- Total: £205
Budget deficit: £65
Bank loan: £65
As we can see, because Mr Bloggs has predicted he will spend more than his weekly income and so he will have to borrow £65 to cover his costs. A governmental budget is fundamentally the same.
Let us pretend there is a fictional country called Taser. Taser earns 100bn Taserian dollars through tax each year. The UN and other worldwide charities and organisations also award the developing country of Taser with taserian $40bn annually. Here is a hypothetical budget for the hypothetical country of Taser:
Income:----------------------------------------------------Expenditure:
$100bn tax-----------------------------------------------$60bn healthcare
$40bn subsidies---------------------------------------$5bn defence
---------------------------------------------------------------- $35bn education
--------------------------------------------------------------- $50bn general civil service
---------------------------------------------------------------$20bn police
---------------------------------------------------------------$15bn other
Total: $140bn--------------------------------------------- Total: $210bn
Budget deficit: $70bn
World bank loan: $70bn
As we can see the budget for the country is very similar as to that for Joe Bloggs. In the UK it is much the same; the government spends money on schemes from its income via tax etc but if it has to overspend then it must borrow from abroad just as you and I might get a loan or use a credit card. Budget deficits do not always occur and if there is a budget surplus then the government has spent less than its earnings. In the west this almost seldom happens nowadays especially after a worldwide recession but when it does the money is used to pay off previous debts, to save and to invest further in the nation. Every year the UK government must publish its own budget estimating where it will spend, where it will earn and where it will borrow. The chancellor of the exchequer Alastair Darling did this the other day in his budget announcement as has every chancellor usually annually since the chancellor's role in politics was defined. I hope this helps, thank you.