The budget is the annual finance act of parliament. The government needs to raise money by tax and the budget gives the government parliamentary approval for this. Without a budget being passed the government cannot function.

Normally a government party either has a majority in the House of Commons, or is in a coalition with another party which gives it a majority. These parties then instruct their MPs to vote for the Budget, which allows the government to operate.

However, the current government does not have a majority. It depends on an agreement with the DUP. Previously the DUP has agreed to vote with the government on "Finance and Confidence" motions. Thus the government is able to proceed with its business. The DUP are threatening to break this agreement if the "deal" with the EU breaks their "red lines". Roughly these are that exactly the same customs arrangements that apply to Great Britain (England, Scotland, and Wales) should also apply to Northern Ireland.

There are currently 316 Conservative MPs, and 315 MPs in opposition parties that are likely to vote against the government in a budget vote (excluding Sinn Fein, who do not vote in the UK parliament). Given the partisan nature of the Commons, it is unlikely for opposition MPs to vote with the Government on a finance bill. Thus the position of the DUP’s 10 MPs is critical. If the DUP vote for the bill it will pass, and if they vote against it will fail.

If the budget is not passed, then the government cannot function, and a confidence vote is almost certain to follow. (The fixed term parliments act means that an election not automatically called) If the budget is not passed but government nevertheless passes a confidence vote, we are in uncharted territory. The EU may decide to change the agreement, or it may result in UK leaving with no agreed deal on the future relationship.

If the government doesn't pass a confidence vote then the likelihood is new elections. The result of those elections would determine what would happen next.

This may all be sabre rattling. Robert Peston thinks that the deal that officials have negotiated is likely to be acceptable to the DUP, but they just want to remind the PM that they can't be taken for granted.