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On the parliament.uk site's information about the annual budget, it describes the tradition of "Despatch box drinks", where the Chancellor is afforded the privilege to drink alcohol at the despatch box while delivering his budget speech.
What is the reasoning behind this? Is it formally codified in parliamentary rules, or is this just a case of tradition? Is there any record of how long this tradition has been taking place?
The Chancellor is allowed to do this as a matter of tradition, as the OP's link says. There's also a practical reason: the Budget speech is often long and complex, and a boost to their morale during the process is reasonable.
Many of the details of operation of the UK parliament are traditions, rather than written rules. The tradition goes back to at least 1882, that being the last year in which Gladstone presented a budget, and is probably older.
It should be noted that there are several bars in the Houses of Parliament that are always open while Parliament is sitting. Drinking alcohol, without getting drunk, is considered quite acceptable. The UK temperance movement never had remotely the power of the American one, and is now fairly insignificant.
