Chancellor of the Exchequer : definition of Chancellor of the Exchequer and synonyms of Chancellor of the Exchequer (English) British politics portal The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the Treasury in other nations. The position is considered one of the four Great Offices of State and in recent times has come to be the most powerful office in British politics after the Prime Minister . It is the only office of the four Great Offices not to have been occupied by a woman. The Chancellor of the Exchequer is now always Second Lord of the Treasury as one of the Lords Commissioners for executing the office of Lord High Treasurer . In the 18th and early 19th centuries it was common for the Prime Minister to also serve as Chancellor of the Exchequer if he sat in the Commons; the last Chancellor who was simultaneously Prime Minister & Chancellor of the Exchequer was Stanley Baldwin in 1923.

Formerly, in cases when the Chancellorship was vacant, the Lord Chief Justice of the King's Bench would act as Chancellor pro tempore. [1] The last Lord Chief Justice to serve in this way was Lord Denman in 1834. The Chancellor is the third-oldest major state office in English and British history,[ citation needed ] one which originally carried responsibility for the Exchequer , the medieval English institution for the collection of royal revenues. The Exchequer dates from the time of Henry I . The Chancellor controlled monetary policy as well as fiscal policy until 1997, when the Bank of England was granted independent control of its interest rates. The Chancellor also has oversight of public spending across Government departments. The office should not be confused with those of the Lord Chancellor or the Chancellor of the Duchy of Lancaster , both Cabinet posts, the Chancellor of the High Court , a senior judge, or the Lord Chief Baron of the Exchequer , a defunct judicial office. The current Chancellor of the Exchequer is George Osborne .

Contents 6 External links Roles and responsibilities A previous Chancellor, Robert Lowe , described the office in the following terms in the House of Commons, on 11 April 1870: "The Chancellor of the Exchequer is a man whose duties make him more or less of a taxing machine. He is entrusted with a certain amount of misery which it is his duty to distribute as fairly as he can."The current chancellor right now in 2012 is George Osborne Fiscal policy The Chancellor has considerable control over other departments as it is the Treasury which sets departmental expenditure limits. The amount of power this gives to an individual Chancellor depends on his personal forcefulness, his status with his party and his relationship with the Prime Minister. Gordon Brown , who became Chancellor when Labour came into Government in 1997, had a large personal power base in the party. Perhaps as a result, Tony Blair chose to keep him in his job throughout his ten years as Prime Minister; making Brown an unusually dominant figure and the longest serving Chancellor since the Reform Act of 1832.

[2] This situation has strengthened a pre-existing trend towards the Chancellorship moving into a clear second among government offices, elevated above its traditional peers, the Foreign Secretaryship and Home Secretaryship . One part of the Chancellor's key roles involves the framing of the annual Budget , which is summarised in a speech to the House of Commons . Traditionally the budget speech was delivered on Budget Day , a Tuesday (although not always) in March, as Britain's tax year follows the Julian Calendar . From 1993, the Budget was preceded by an annual ' Autumn Statement ', now called the Pre-Budget Report , which forecasts government spending in the next year and usually takes place in November or December. This preview of the next year's Budget is also referred to as the "mini-Budget". The 1997, 2001, 2002, 2003, 2006, 2007, 2008 and 2012 Budgets were all delivered on a Wednesday. Monetary policy Although the Bank of England is responsible for setting interest rates, the Chancellor also plays an important part in the monetary policy structure.

He sets the inflation target which the Bank must set interest rates to meet. Under the Bank of England Act 1998 the Chancellor has the power of appointment of four out of nine members of the Bank's Monetary Policy Committee - the so-called 'external' members. He also has a high level of influence over the appointment of the Bank's Governor and Deputy Governors, and has the right of consultation over the appointment of the two remaining MPC members from within the Bank. [3] The Act also provides that the Government has the power to give instructions to the Bank on interest rates for a limited period in extreme circumstances. This power has never been used. Ministerial arrangements At HM Treasury the Chancellor is supported by a political team of four junior ministers and by permanent civil servants . The most important junior minister is the Chief Secretary to the Treasury , a member of the Cabinet, to whom the negotiations with other government departments on the details of government spending are delegated, followed by the Paymaster General , the Financial Secretary to the Treasury and the Economic Secretary to the Treasury .

Two other officials are given the title of a Secretary to the Treasury , although neither is a government minister in the Treasury: the Parliamentary Secretary to the Treasury is the Government Chief Whip in the House of Commons ; the Permanent Secretary to the Treasury is not a minister but the senior civil servant in the Treasury. The holder of the office of Chancellor is ex-officio Second Lord of the Treasury . As Second Lord, his official residence is Number 11 Downing Street in London, next door to the residence of the First Lord of the Treasury (a post usually, though not always, held by the Prime Minister ), who resides in 10 Downing Street . While in the past both houses were private residences, today they serve as interlinked offices, with the occupant living in a small apartment made from attic rooms previously resided in by servants. The Chancellor is obliged to be a member of the Privy Council , and thus is styled the Right Honourable (Rt. Hon.). Because the House of Lords is excluded from Finance bills, the office is effectively limited to members of the House of Commons. Perquisites of office Official residence The Chancellor's official residence is No. 11 Downing Street.

In 1997, the then First and Second Lords, Tony Blair and Gordon Brown respectively, swapped apartments, as the Chancellor's apartment in No. 11 was bigger and thus better suited to the needs of Blair (who had children) than Brown who was at that stage unmarried. So although No. 11 was still officially Brown's residence, he actually resided in the apartment in the attic of No. 10, and Blair — although officially residing in No. 10 — actually lived in the attic apartment of No. 11. Dorneywood Main article: Dorneywood Dorneywood is the summer residence that is traditionally made available to the Chancellor, though it is the Prime Minister who ultimately decides who may use it. Gordon Brown , on becoming Chancellor in 1997, refused to use it and the house, which is set in 215 acres (87 ha) [4] of parkland, was allocated to Deputy Prime Minister John Prescott . It reverted to the Chancellor in 2007, then Alistair Darling . [5] Budget box Budget box or Gladstone box, c.

1860 The Chancellor traditionally carries his Budget speech to the House of Commons in a particular red briefcase . The Chancellor's red briefcase is identical to the briefcases used by all other government ministers (known as ministerial boxes or " red boxes ") to transport their official papers but is better known because the Chancellor traditionally displays the briefcase, containing the Budget speech, to the press in the morning before delivering the speech. The original Budget briefcase was first used by William Ewart Gladstone in 1860 and continued in use until 1965 when James Callaghan was the first Chancellor to break with tradition when he used a newer box. Prior to Gladstone, a generic red briefcase of varying design and specification was used. The practice is said to have begun in the late 16th century, when Queen Elizabeth I 's representative Francis Throckmorton presented the Spanish Ambassador, Bernardino de Mendoza , with a specially constructed red briefcase filled with black puddings .[ citation needed ] In July 1997, Gordon Brown became the second Chancellor to use a new box for the Budget.

Made by industrial trainees at Babcock Rosyth Defence Ltd ship and submarine dockyard in Fife, the new box is made of yellow pine, with a brass handle and lock, covered in scarlet leather and embossed with the Royal initials and crest and the Chancellor's title. In his first Budget , in March 2008, Alistair Darling reverted to using the original budget briefcase and his successor, George Osborne, continued this tradition for his first budget, before announcing that it would be retired due to its fragile condition. [6] The key to the original budget box has been lost. [7] Budget tipple By tradition, the Chancellor has been allowed to drink whatever he or she wishes whilst making the annual Budget Speech to parliament. This includes alcohol, which is otherwise banned under parliamentary rules. Previous 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 Gladstone ). [8] The current Chancellor, George Osborne , like his two predecessors, Alistair Darling and Gordon Brown , [9] opts for water.

In fact Darling drank what was named "Standard Water" in reference to, and support of, the London Evening Standard newspaper's campaign to have plain tap water available in restaurants at no charge to customers. [10] List of Chancellors of the Exchequer Colour key BBC News | NEWSNIGHT | Leadership Debate transcript Low Graphics BBC TWO: NEWSNIGHT: CONSERVATIVE LEADERSHIP DEBATE BETWEEN KENNETH CLARKE MP & IAIN DUNCAN SMITH PRESENTED BY JEREMY VINE JEREMY VINE For one night only the Tory hustings, Kenneth Clarke and Iain Duncan Smith head to head on the future of their party. Who can bring the Conservatives back from the brink? Good evening and welcome to Newsnight, welcome also 5 Live listeners who are joining us. This is a one-off in the Tory leadership debate; the first and only time Kenneth Clarke and Iain Duncan Smith will debate the future of their party with each other in public. Listening to them here in the studio are eight Tory members from around the country. Eight that is from the 300,000 strong electorate, which has already started, picking the winner by post.

Three of them are Duncan Smith supporters, chosen incidentally by his team and another three are chosen by the Clarkeites. Also here listening from the other side of the studio are members of a rather bigger electorate, from the six million voters who deserted the Conservatives in 1992 and '97. They will judge whether either of these two men has the magic touch that will bring them back on board. Well we hear from the two candidates in just a moment. But first let's take a quick look if we can at their political CVs. On the screen behind me starting if we can with Kenneth Clarke; Paymaster General, his first cabinet job in 1985. And after that Chancellor of the Duchy of Lancaster in 1987. Health Secretary, '88; Education Secretary from 1990; Home Secretary from 1992 and then the really big job Chancellor Exchequer from 1993 to '97. And now if we can we will have a look at the political CV of Iain Duncan Smith MP - 1997 to 1999, Shadow Social Security Secretary and then 1999, Shadow Defence Secretary.

So looking at the two CVs there Mr Duncan Smith, you'd concede would you that it's no contest? IAIN DUNCAN SMITH Well if it's all about how long you've been in government and whether you're elected a few years back and able to take a ministerial job then that would be the issue, but I don't think it is the issue. The issue here is whether the experiences that you have whether inside parliament or outside parliament are sufficient actually to bring some knowledge to the job that I want to do and Ken wants to do. I have lots of experiences outside of parliament. I've been involved in running a business, I've had to see others and I've also been made redundant myself, I know what it's like to suffer the indignities of policies that have gone wrong. JV On the CV there we put up on the screen you've got a severe vacuum in your political CV. IDS I joined the party here in parliament in 1992 and they were out of power by 1997. But I will say you know Tony Blair has actually not had any ministerial experience either, it didn't stop him leading his party and going on to being Prime Minister.

JV You think Mr Blair is doing a good job do you? IDS I don't' think that anything he does wrong...by the way I think he does a lot wrong has necessary anything to do with his lack of experience as a Minister, it has to do with the fact that he is fundamentally wrong on a number of key political issues. Not least of which is the way I think they're going to hurt the economy quite dramatically. JV Now you've said a number of times when people have talked to you about your lack of experience "oh when I was in the Commons as an MP.." and you were going through phase of rebelling and so on, you said you were offered some government jobs. But today Mr Major, the former Prime Minister on television said that's not true. IDS I have never made a big issue out of it...I tell you exactly... JV You claimed you were offered government jobs... IDS After the Mastrich issue I was offered by the Whips a parliamentary private secretarialship, one was with Jonathan Aitken and the other was with I believe the Lord Chancellors Office...but they were small jobs... JV Mr Major says that's not true.

IDS Well I'm telling you now it happened and you can go and ask Jonathan Aitken if you want and others, I mean the fact is that it happened. But they are not big issues. I don't by any means claim that these are jobs that sit with the Chancellor of Exchequer or anything like that, they were just simply first rungs on the ladder. I felt it would be unfair on the government at that stage if I took something because I thought it would lead to some division and I didn't think that was necessary. JV Mr Clarke do you think the hole in his CV is a problem? KENNETH CLARKE I'll offer him a job, I don't think that really arises. As you say I would hit most of these problems running, I've had experience of running quite a lot of departments of State. The thing I'm looking forward too...I've been shadowed by most of the members of the Labour Party, I've been shadowed by Blair, I've been shadowed by Brown, I've been shadowed by Cooke...I've debated John Prescott a lot... JV I'm asking about his record, whether you think it's a problem.

KC I think Iain is someone I would offer a job in my Shadow Cabinet now. JV He's going for leader Mr Clarke? KC I know he is, I'm going for leader as well, that's why I think I'm going to be offering him a job in my Shadow Cabinet... IDS Ditto Ken, I'll think I'll do the same to you! JV Your CV of course Mr Clarke has a problem as well doesn't it, because when we get to 1997 your CV stops dead, blank; you took a look at the Conservative front bench in Opposition and you thought I don't want a part of that? KC No I wanted actually to have a break from being in a ministerial office for so long. I've actually spent the best part of a quarter of century as a front bench spokesman debating social security, health, industry, and transport at one point... And the idea of just shadowing one department for the whole parliament was something I thought would not revive my enthusiasm for politics. What I did therefore was I debated on the economy, taxation, health service, probably made more speeches on that that any other subject in the last parliament, the reforms of the House of Lords, the attempt to get rid of...

JV But you were out of the game as far as the front bench opposition was concerned weren't you? KC Oh yes, I was offered the Deputy Leadership by William, but I'm giving you the reason why I resigned... At that time William did what Iain says he's going to do now, he had some pro-Europeans in, but then Iain and others said that the policy we all had on which we were agreed on the single currency which was not for the foreseeable future, didn't mean much, a lot of these advantages was changed. IDS No, no Ken... KC That led the pro-Europeans leaving the Shadow Cabinet, but that didn't involve me I'd left already, I was attacking the government, I've spent most of the last four years attacking the government as a back bencher on a broad range of issues on which... IDS Can I just clarify this because I just don't agree about that. The policy that William had by the last election was the one that he wrote up in a number of articles in which he actually stated.

What happened was there was some mess about whether or not it was the foreseeable future or in the lifetime of the next parliament and Norman Fowler and others within the government and Norman I believe is supporting you were absolutely clear William should settle on the position that he'd announced in the leadership election. That's all it was and he went back to that and we were all happy about that. I felt content with that and so did others, pro-European you say and others were sceptical. So I don't think there was any sudden pressure or shift from me, far from it, others like Norman who were absolutely adamant that that was the right position to take... JV Mr Clarke, are you happy with that? KC Well I think its relevance is to what happens now actually...I don't think there's anybody more Euro sceptic in the Conservative Party than Iain. The position was we spent the first three months with a policy, expressing the policy of not for the foreseeable future; we did actually have a party conference where I was as much in accord with the policy as you were I thought. Then you and David ... Henry said we must...it's not for the parliament... IDS Ken with respect that's not the case.

The truth was that what William had stood on, the position on Europe, go back and check this, I promise you there's no point in getting in dispute about this, this is all in the past. But others like Norman Fowler absolutely agreed and felt that it was right for him to re-state that position. It just happens to be that the interpretation of the policy in the first few months was incorrect, that was all. I didn't have a huge drive to do it more than anybody else. It was the fact that until this was clarified it would lead to difficulties...that's the past though Ken... KC I don't want to dispute that, I don't think it's relevant now. I mean going back to what's just been revealed by Liam Fox that before the election the decision was taken not to campaign on health and education and these issues, it was decided to campaign on Europe, 12 Days To Save The Pound and all that kind of thing. Now I had been advising William, I'd been advising colleagues, in my opinion we should fight on the big domestic issues, health and so on. But you were amongst those who made the decision not to campaign on health and education...

IDS With respect Ken there were three days allocated and launched for education during the campaign, three times that Theresa May and others actually stated our education policies. There were other moments when we did both pensions, a whole variety of issues. The problem was as I think you can understand that there was less interest in getting on to what I consider to be the major subjects and I agree with you here, I think we do agree about this, that actually what we need to do as a party is to get on to those public service issues and we weren't able to do that enough during the election which was why it wasn't so good for us. KC You just didn't have the time to get around to it? IDC No, we got around to it, the problem was none of this was reported at that time, I promise you, you can go and see Teresa about it...she was frustrated as I was. I kept saying let's get on to education, let's make sure that we've done it, try it again, try it again... JV We're going to come back to Europe separately obviously, so let's just pause that there for a second if we can. But going back to the CVs.

Is it a problem for you that Mr Clarke's' goes blank, this marvellous resume goes blank after 1997? IDS Oh no come on look I'm the first to say that Ken had just spent a long time in government, always pretty continuous, he came to 1997, it was a disastrous defeat; you know everybody wants to resolve their lives as they must afterwards and as far as I'm concerned Ken is a colleague and a friend and talented and I'm sure he wants to give it his best for the party... KC It only goes blank because you're my listing offices and we worked in government, if you wish to consult the pages of Hansard, you'll find it was not blank... JV You didn't have any Shadow post that was my point about it... KC Mr Gordon Brown would have rather liked it to be blank I think...I think my comments and criticisms on his budgets were rather helpful to Mr Brown because I believe then and I believe now he made quite a lot of serious errors and we're about ...let's look to the future... we're about to discover the consequences...

JV You mentioned what you were doing since 1997, of course embarrassingly some of that's come up today hasn't it, because you've been working with great Ken Clarke vigour for British American Tobacco, BAT, are you uneasy Mr Clarke about today's allegations that the company is actually taking part in the smuggling of cigarettes? KC This has been livened up again today with my picture stuck in the middle of pieces which plainly had nothing to do with me, I think you'll find it's no co-incidence that the dear old Guardian is trying to liven it's up anti old-fashioned tobacco story... JV It's not true? KC It's certainly not true, there's absolutely nothing...it's inconsistent...is what I said the last time these were run. JV Would you know if it was true? KC I'll tell you where I think these stories come from, I think they come from Millbank because I've been trying to work it out, I don't think Iain's people have anything to do with this rubbish I'm sure they haven't...It's no co-incidence that several newspapers, The Times and The Guardian actually have produced this the same day.

I'll tell you who is behind that, Alistair Campbell; Alistair Campbell's produced a left-wing Labour MP who is prepared to hint he'll recall a Select Committee in order to liven this up. Why do you think the Labour Party has produced it today because they want to influence the outcome of this election? And I'm flattered the Labour Party want to stop me winning this election, but I haven't had a Conservative voter in this campaign take any notice of this nonsense at all... JV You don't think this hundred thousand pounds a year job is starting to sully your name? KC I certainly do not, I think it's an extremely reputable company and my role in the company has been made sure that these allegations have been independently investigated by lawyers and they're being looked at by the DTI and frankly attempts to warm it up by journalists trying to exploit the fact I'm current and news is not... It's just the kind of think Millbank knowingly actively try to get their friends in the press at a time like this. JV Alright, okay, Mr Duncan Smith here are some of the people that support you.

Peter Dawson, you're a Ken Clarke supporter, how is it that with Mr Clarke's CV looking so substantial as it does, Mr Duncan Smith seems to be running so strongly in this campaign? PETER DAWSON Interesting point but I think that the Conservative Party is talking about its future, it wants to explore all options and I'm not convinced really by any of these polls because where is the membership? They may talk with activists, people that are prepared to say that, 300,000 people is in fact very difficult to find where they are. I believe and the ground swell of support that Ken is getting throughout the country, that in fact he is well on the way to being able to win. JV Okay, Lesley Finlayson you're a Duncan Smith supporter, you chose to ignore the Ken Clarke CV in all its glory? LESLEY FINLAYSON Yes absolutely. I've got the greatest respect for you Ken but you were an excellent Exchequer under Margaret Thatcher, but Margaret had the privilege of having the old Tory grandees to keep the back benchers and the loose cannons like Frances Maude, Anne Widdecombe and some of Portillo's men under wraps, we don't have that.

I see you as one of the Tory grandees, one of the people to hold these backbenchers in tight behind Iain to make this party united to go forward. Because of your age and no disrespect, at the end of the next election if you were to win it, you would be coming to nearer 70. Iain is a young man to go forward. I see you there, I respect you greatly, you are a grandees and I see your role in bringing this party together and controlling the loose nails of some of our MPs. KC Well I don't quite understand how I'm a unifying influence whilst I'm not leader but I'm not a unifying influence if I am leader. One of the things I think all Conservatives want to get back to is exactly what you described, the fact we were a unified party in the Eighties and the Nineties and that requires all of us to concentrate on the need to do that in order to win an election. My views were the same when I served with Margaret Thatcher as they are no. What did Margaret Thatcher do when knowing my views, I was then in her government she promoted me.

We didn't have ideological battles about it, she surrounded herself with people with pro-European views like myself and we found we were able to accommodate a broad range of views, we certainly concentrated on the domestic agenda, Margaret made sure of that and we were a very powerful reforming government that did a great deal of good for this country. I can see a similar party unless you actually get people who are just determined to make trouble, which after two serious election defeats, I think a leader who is elected by all the membership is actually going to be able to demand of his members... JV Lesley is an Iain Duncan Smith supporter, are you satisfied with that? LF No, not at all, no. I think with the greatest respect Ken's had his day, he really has. Iain is new bloody, he is in touch with people on the streets, he works very hard in his constituency, he works with people, he's been there, he's just a family man, a hard working man, he stands on his principles, he has integrity and he don't change his mind because public opinion expects him to.

He will stand by his beliefs but he won't force other people to go down what he believes, he will listen to other people, he will bring them together. I don't believe he'll be headstrong and just go out there. JV Okay, let's take a view from another Clarke supporter. Jane Ellison, does that sort of thing not concern you when you look at Mr Clarke? JANE ELLISON No, I'm afraid I can't agree with Lesley in the remarks she made, I think she made a very inaccurate statement about Mr Clarke's age for a starter in calculating that. But I think this is about how people appeal to the electorate. I think some of the things that have just been said are real red herrings. Are big task is to bring back the missing Conservatives. IDS I agree. JE The people who have deserted us over the last two elections and they didn't desert us because we weren't right wing enough, I mean I think that's one incontrovertible fact and it is certainly the biggest issue we have to address. How can we re-engage with the mainstream of British politics and offer this country what it's crying out for, effective opposition and then an effective alternative government. IDS I agree with that.

JV Can I just come in on that point if I can because one of the things that it sometimes seems in this contest is that your party's' catastrophic performance in the last election is being glossed over particularly by you Mr Duncan Smith IDS I'm not glossing over... JV Well you call the William Hague leadership a platform on which we can build. IDS There were things that William Hague did and what we did in the last four years, which do give us a platform... JV You won one seat in four years... IDS Hold on I'm not saying that 2001 was anything short of a terrible election defeat, what I am saying however was that in the four years sadly we didn't get anywhere near as close to the things that we needed to do, but there were good things that were done. The party fought an election and came together much better than it's done for a long time. We had some good policies and good positions on things like environment, on education, we weren't able to launch them or sell them as hard as we could. But the reality was there are good platforms to build from there.

What I am saying however and I agree that the point now for us, the issue for us, for Ken or myself whoever becomes the leader is how to reach out across a broader range of subjects than we were able to tackle by the last election. I call these the quality of life issue, public services, the health, the education, the idea about care in the community as well as law and order, and those are the big subjects... JV Can I just stop you for a second, you've used that phrase again, you've called it the good platform, how can winning one seat... IDS I said good subjects actually... JV You said again a good platform that William Hague...the result was a good platform... IDS I didn't say the result was a good platform, I said the work put in, in the last four years gave us a platform on which to build now...to construct these, it wasn't a wasted four years. JV Do you agree with that Mr Clarke? KC I think William Hague had an impossible task, I don't think we should make William a scapegoat because it really was an impossible task being leader of the Opposition after the last election. I was probably very lucky that I didn't get in.

But there's no doubt the then Shadow Cabinet in my opinion made a bad strategic decision in the last two years and we've gone with the wrong agenda, we used the wrong tone and we didn't go about things the right way. Both of us are now saying the same things about the agenda, which actually I've already said I was then debating and then talking about. I think the point about winning back Liberal Democrat and Labour voters is key, if you're going to win an election, what you've got to do is not appeal to yourself, not talk to each other, what you've got to do is talk to people who used to be Conservative who are now voting Liberal Democrat, now voting Labour and they're young very many of them. They want us to take firstly a more enlightened issue on a lot of lifestyle things which Michael Portillo called his modernising agenda, he was actually describing an approach to other people's lives, which I have been taking rather automatically throughout my whole lifetime. You need to go back to talking about economic policy where we allowed Gordon to rather get away with murder in the course of the last election.

And you do need to do the work of having some solid policies, education, health, in order to change the way they're delivered to meet... IDS The lady over there did say something which was very interesting, we can go on saying that we want to get on to these broad agendas and I agree with you, I think we have to because these are the quality of life issues that actually matter to people. But what I think you said earlier on was we don't want to just go off to the right or to the left or whatever it happens to be and I agree about that, because I don't think the majority of the public actually see things in right and left. What they see is that their father who can't get the hip replacement he wants and his quality of life has gone and they talk about that and they talk about failing schools and having children trapped in those... So actually part of the problem is language and part of the other problem is that we didn't actually say here is the failure of a sort of state monopoly and here's how we're going to change that and broaden out.

Now that's what we have to do, we have to give other people quality, quality of life and much greater choice and this is how we have to tackle it through the public services, so it's not right or left, it's just what works, what succeeds is how Conservatives... JV But in the election campaign you probably both concede that you allowed your agenda to be somewhat dominated by Europe, so I want to talk about that issue first if we could. We'll come on to the other issues as well. But I want to put on the screen if I can the Thatcher letter from yesterday, Margaret Thatcher writing in The Daily Telegraph, "I simply do not understand how Ken could lead today's Conservative Party to anything other than disaster", she said. "Time and again the Conservatives would be exposed as either hopelessly split or deeply cynical." And that Mr Clarke is right at the heart of your problem isn't it? That you're going to be leading if you win a party you disagree with? KC Well both of us agree we've had ten years of the Conservative Party of being exactly in the situation that Margaret has described, it's got if anything worse in the recent past sometimes rather than better, we both agree that that now has to be put behind us.

But Margaret's motives behind this were this awful "e" word again she's suddenly intervened and decided she agreed with Iain, we've got to move into a more Euro sceptic position than we were last time. Now actually if Margaret had asked herself the question that the young lady in the audience just asked: In 2001 is it right that we should be dominated by this? Isn't it right that we should ask how are we going to appeal to people who were voting against us, people who vote for pro-European parties like the Liberal Democrats; people who vote for New Labour.... JV It's an important issue isn't it? KC ...I think if Margaret asked herself that question then she'd see why people like me who were actually very privileged to be her Ministers when she was in office, she didn't have my views when we were there then, she'd understand why people like me are in a better place to win back these floating voters, than people who are dominated by Margaret Thatcher or take Margaret Thatcher's advice... JV Alright Mr Duncan Smith is shaking his head, let him come in... KC ... Margaret's intervention in the last election, which promptly lampooned William as somebody who was wearing a Margaret Thatcher wig...

IDS We agree about one thing Ken here on this Europe issue which is somehow we want to deal with it by putting it in its rightful place as an issue, but not every issue, it's not to dominate. So if we agree that then the difference really is how do you do that? My problem is that the only way you can settle this is by leading through the majority of the party who do not want to enter the Euro, in fact the majority don't want to enter the Euro in the country. So my position is you stand with that when the referendum comes the party opposes that, but what you do have is tolerance therefore for the small minority who may wish to take a different view. I think that's the way to handle it, they can be in the Shadow Cabinet, they can be in the front bench, when the moment comes they can step down, they can campaign for it with passion, with honesty, I tolerate that absolutely. My point is if you do it the other way around Ken and I think this is the real issue what do you do if you are at odds with the party when Mr Blair comes back from the next inter-governmental conference.

You know the party wants to go one way and perhaps you might want to go the other, that's the real issue. Or when the referendum comes for the Euro if you were to hold it at the next election when as honest as you always are about this and great credit for that, but however that is going to take a different line to the party. They'll tease this out every single time and we will break up over this for four years. JV Mr Clarke. KC Well Tony Blair's not come back from any conferences with my agreeing with him and I do not anticipate that situation arising. One of the problems in the European Union at the moment seems to me is you've got weak social democratic governments, ... ..., Blair, they're not delivering anything. I could make I think a rather powerful attack on what he has brought back from recent conferences. I don't in order to avoid divisions in the party, I don't because my position is rather different from the rather ferocious Euro sceptic, Euro-phobic attacks...You quote in your leaflet someone who actually praises you, whose an intelligent Europhobe...the attacks that he gets at the moment, I would take a more balanced and moderate view.

But Tony Blair knows perfectly well I attack him frequently on issues of that kind... JV ...Let me use that Thatcher phrase again, Lady Thatcher's letter says that you're party will be... KC ..Not Lady Thatcher again... JV Well leave out the fact it's her for a second if you can, hopelessly split or deeply cynical again isn't that the way it's going to happen with you as leader? KC I think it's deeply cynical to keep harping on about Lady Thatcher myself and I... JV Don't worry that it's her... IDS Let's just put Lady Thatcher's letter to one side and just get on with this... KC A great Prime Minister but not always the greatest source of advice about to win elections in 2005...Let's get back...because we sound as though we're agreeing... I'll tell you what troubles me. Of course I think we should respect each other's opinions, that's what we did when we were in office, that's how we used to win elections. I think on the single currency where it's all going to be decided by a referendum.

The public are now going to regard that as an election deciding issue, we can actually just have freedom of speech and freedom of vote and actually tell the public we're going to leave it to a referendum. My understanding is you're going to still have an official policy, which will bind everybody in the Cabinet until they're let loose for three weeks in a referendum and your policy will be harder than Williams. Your policy will be we will never join the single currency in any circumstances. IDS Ken I'm being honest, you're honest, I think we both are about this. I'm not going to be voting for the single currency, I think for constitutional reasons it isn't going to work for us. I actually don't by the way think it's going to work for the rest of Europe... KC But that's now to be the official policy of the party? IDS No, the policy that come the referendum I will lead the party which does not want...we had a vote on this last time Ken, over 85% of the party said they didn't want it and the majority of the country don't want it. So it's nothing extreme about saying I'm on the side of the majority...

KC Over 85% did not say we should never join; your opinion is not the policy for which 85% voted... IDS Let me just take you to this because it's about how you deal with those who don't want that position. I have never said they will there after have to say they suddenly had adopted this position because they were in the Cabinet. I would say quite happily that they can make it clear that they will be making a decision on that when the moment comes and that the good thing about being in a Shadow Cabinet run by me is that the tolerance is there and the understanding that they do not have to say I absolutely agree with this but I am happy to be in the Shadow Cabinet on that basis. KC We might be doing some more good for the Conservative Party here than some of our predecessors have been doing in the last day or two... IDS Absolutely.. KC Can I ask a question to the right of this, why are you so upset by my saying that they should all be free to give their honest opinion now? One of the things that's key I think to being in Opposition... IDS No-one's going to stop you from giving an honest opinion at any time is there Ken...

KC ...is getting Blair out of government, is to have an approach to politics, which contrasts with Blairs'. Now people know we have a variety of variety of views, all I'm saying is that we should all give our honest opinions because it's politicians again... I don't see why you can't have a Shadow Cabinet where people like you can say never in any circumstances will I vote for it, people like me could say if and when the economic circumstances came right I probably would, you'd have ... between, that would defuse it. You say that will cause divisions, cynicism, difficulties...and we've all just got to keep quiet really until the referendum. IDS I think it will Ken, let me just answer that because it's quite important this. One of the big areas that is going to cause serious problems is look as far as I can see if you were the leader and at some point Mr Blair is going to call a referendum, what happens then? During the course of that time you will want to clearly share a platform with him, you did it before, you sat down with him and Gordon Brown and you said I agree with them.

The problem is that the Labour Party will love that because what that says to them is that here is the leader of the Conservative Party who is completely in tune with us but the rest of the majority of the party is not. They'll feed that split and feed that division and I feel it's manageable from the other side, that's the difference between us. I think it has to be managed from the majority of the party and you think it can be managed from the minority of the party. KC You and I are having a very constructive debate so I'm not going back to the times when you enthusiastically voted for them, which is something I've never done...This dealing with what happens the public don't have this problems with the referendum. The reason 12 Days To Save The Pound and so on did not work was that the public said but that's a referendum issue, that's a separate point... IDS That's my point, you can put it on one side with clarity...

KC If you have an election and referendum the Conservative Party may get excited about it but the public won't, they'll say I can now choose a government, I can decide whether I want a modernised Conservative Party or whether I want this dreadful shallow lightweight Labour government to continue and they can ... JV Gentlemen I want to break in...hang on, hang on... IDS ...the principle of the Euro, have a little debate on it...where Ken goes and the rest of the party goes... JV Just on a point of fact did you say that you would never vote on the Euro just then? IDS Yes, I've said I'll never vote for the Euro, I believe it on constitutional grounds, Ken knows that, I've said it many times. JV Britain should never go into it, yes? IDS Yes.

Question: Holding the position from 1993 to 1997, who was the last Chancellor Of The Exchequer Under Margaret Thatcher ?
Answer: KENNETH CLARKE