Gordon Brown is the current Prime Minister. He is charge of selecting a team of ministers from Labour MPs and peers to make up his government. The most senior ministers are members of the Cabinet. They meet in private to make decisions about government policy.

The government is divided up into departments. Each department is responsible for a different area of life - employment, agriculture, education, arts, sports, the environment, defence etc.

What is democracy?

Other political parties

The central government looks after national affairs, such as health, defence, foreign policy and the environment. The government is responsible for the general welfare of citizens and gives protection to the most vulnerable in society.

What does local government do?

Look around you. What do you see? A computer in front of you? A desk? A classroom? A playground, a park perhaps? Trees, traffic lights? A teacher? These things - or people - don't just appear out of nowhere.

They are all administered by government - local and national.

And they are not free. Computers and desks need to be bought, roads need to be mended, playgrounds and parks need to be looked after, traffic lights need to work so there aren't big pileups, teachers need to be paid - whether you want them or not!

These things are called public services. They are things that everyone benefits from. Other public services include the health system, the armed forces, the environment and benefits if you are unemployed, homeless or need to stay at home to look after a relative.

Not everyone in the country will need to go to the doctor or have to claim housing benefit, but the whole society benefits by a healthy population and one that has somewhere to live, so we all take on the responsibility to pay for these things.

Public services are mostly paid through taxes.

Different types of personal taxes that go to the central government are:

• Income Tax - a percentage of your pay, depending on how much you earn.
• Corporation Tax - a business tax
• Customs and Excise - you pay tax if you import something and we pay VAT on most goods, except really essential ones like food and children's clothing.
• Capital Gains Tax - if you own something valuable and sell it, you pay tax on any increase in value gained from when you bought it.
• Inheritance Tax - if you get a house, for example, from someone who has died, you pay tax on it.
• National Insurance - a special tax which is paid by all workers and employees.

Because the government is taking our money, they have to be accountable to us. Each year, they have to show that they are spending the money wisely and not spending it all on themselves.

Every year the Chancellor of the Exchequer announces its review of taxation and spending plans in the budget.

Traditionally, the Chancellor takes these plans to parliament in a red leather case. The original case was made in 1860 for William Gladstone, but Gordon Brown had a new one made in 1997.

The government spends money from taxes on providing services for the public - such as health, education, the armed forces as well as pensions and housing and unemployment benefits.