7 Leaks and advance briefing
139. Last year in our Budget Report we deprecated
both leaks and advance briefing of Budget announcements:
It has been noticeable over many years under
successive Governments that measures appear to have been trailed,
sometimes accurately, sometimes in a way designed to place them
in the most favourable light. Whether particular press reports
are leaks or briefings or merely press speculation, we have no
view, but we deprecate both leaks, and any advance briefing. Such
activities are corrosive of good government. We will return to
this issue at future autumn statements and budgets.[242]
Regrettably, the Treasury chose not to address this
conclusion in its response to our Report.
140. This year a considerable number of the announcements
in the Budget speech appeared in the press in advance of the Budget
on 21 March. For example, on 14 March press reports appeared that
the Government would in the Budget announce that the Debt Management
Office (DMO) would be consulting on issuing 100 year and perpetual
government bonds.[243]
On 17 March the Herald reported that the Government would in the
Budget announce a guarantee on the future of tax relief on North
Sea decommissioning costs.[244]
Both these stories were attributed to a Treasury source. On 19
March the cut in the additional rate of income tax from 50p to
45p was reported.[245]
On the morning of the Budget itself, the Financial Times reported
that the rate of stamp duty on homes over £2 million would
increase from 5 per cent to 7 per cent.[246]
141. We asked the Chancellor whether any of the measures
in the Budget were briefed to the press. He responded:
In terms of the contents of the Budget, clearly
some parts of the Budget were in the newspapers before I delivered
the Budget. I think every single Budget that I've seen in the
20 or so years that I've been involved in politics has involved
a lot of speculation beforehand. Sometimes entire Budgets have
leaked and sometimes that speculation has been very well informed.
What I can confirm to the Committee is that no Treasury official,
no Treasury Minister and no Treasury special adviser briefed before
the Budget any specific information on tax rates or tax allowances.[247]
The Chancellor also confirmed, however, that the
Treasury "did engage with the press" on the North Sea
decommissioning relief and that he had authorised the Treasury
press office to brief the press about the DMO consultation on
100-year and perpetual bonds.[248]
142. With particular reference to the DMO consultation,
the Chancellor said that:
I draw a distinction. You have a perfectly legitimate
concern, and I have a concern, about things like rates of income
tax and personal tax allowances, some of which did appear in the
press beforehand, but the fact that the Debt Management Office
is going to consult in the future on gilt maturities is the sort
of thing that, frankly, the Treasury and every other Government
Department engages with the press on every day—I would not
regard that as Budget purdah, it is not on the score card. I am
talking about, and I suspect your Committee is concerned about,
what pertains to things in the classic definition of a Budget
and what is on the score card.[249]
143. Paragraph 9.1 of the Ministerial Code, under
the heading 'Ministers and Parliament', reads:
9.1 When Parliament is in session, the most important
announcements of Government policy should be made in the first
instance, in Parliament.
We asked the Chancellor whether briefing the press
on the DMO consultation on gilts conflicted with the Ministerial
Code. He replied that:
I certainly agree that important announcements
of Government policy should be made to Parliament but, in the
case you are citing, this is talking about the fact that the Government
might, at a future date, bring forward a consultation on their
gilt policy. That is not—I would hazard to argue in front
of you, Chair—something that has to be done in an oral statement
to Parliament; it could easily be in the kind of material in a
speech that I would give, whether at the Mansion House or anywhere
else.[250]
144. As we have seen above, the Chancellor assured
us that no Treasury minister, official or special adviser briefed
before the Budget any specific information on tax rates or allowances.
He noted that there had been leaks of Budget measures in previous
years. He assured us that "I completely agree that it would
be much better if the announcements that I referred to—on
stamp duty, personal allowances and the like—had been made
on Budget day".[251]
He claimed, however, that the Budget process he had to deal with
was materially different from that experienced by his predecessors
for two reasons:
Two things have changed [...]. First, I must
agree my major Budget measures well over a week in advance. On
the Monday before the Budget—not the Monday of the Budget
week, but 10 days in advance—I must give the Office for
Budget Responsibility the major Budget measures, and by Friday
I have to have confirmed absolutely everything. No Chancellor
has had to do that before. [...] Because of the OBR process, which
I think is a good process, the Budget exists 10 days before it
is given.
The second thing is that I must negotiate in
a coalition. Inevitably, a process whereby the Chancellor came
up with a Budget in secret with the Treasury, occasionally consulted
the Prime Minister, and perhaps intensely engaged the Prime Minister
in the last couple of days before the Budget was given was very
different from a process in which I must engage two political
parties to make sure that I have their consent to proceed [...].
This is genuinely not pointing the finger at any individual, but
many more people know in a coalition what will be in a Budget
because I need to get the consent of both political parties.[252]
145. The Permanent Secretary, Sir Nicholas Macpherson,
told us that the culture of Budget secrecy had changed in the
time since he had first been involved in Budgets in the 1980s:
I think it fair to say that that culture has
changed over time. [...] The Budget process of the 1980s was different
from how it has evolved over the past 15 years. The convention
in those days was that there was extraordinary secrecy about nearly
every aspect of the Budget. [...] The culture of politics has
changed. If I were stuck in 1980s-think, I would probably be utterly
appalled by what goes on now, but the reality is that through
the 1990s and 2000s, the way in which the Government of the day
engaged with the media changed. I do not think that is a bad thing.
Exposing policy, ventilating ideas and encouraging debate is all
to the good.[253]
146. Sir Nicholas told us that he had not initiated
a leak inquiry within the Treasury as he did not have the prima
facie evidence to warrant one.[254]
He told us that:
There are usually tell-tale signs about where
things come from. Having looked at the stories and the relevant
facts around them, I am confident that they didn't come from Treasury
sources.[255]
When asked, the Chancellor endorsed the decision
of his Permanent Secretary.[256]
Conclusions
147. In his discussion of leaks and advance briefing
the Chancellor attempted to draw a distinction between announcements
upon which he thought it was normal for the Treasury to brief
the press in advance, but not formally announce for consultation,
and Budget announcements, involving tax rates or allowances, which
he maintained should not be revealed in advance. He and the Permanent
Secretary pointed to the occurrence of leaks in the past and to
the change in recent years in the culture of Budget secrecy. Although
the Chancellor expressed regret at the leak of information on
Budget tax changes, he appeared to be resigned to a greater risk
of such information leaking because the Budget is completed earlier
than in the past and because there is coalition government. We
find all these arguments unconvincing.
148. We reject the suggestion that it is acceptable
for Budget measures to be briefed to the press in advance. Public
trust in politics is low, and is further eroded if people have
grounds to think that announcements about important things affecting
them are simply part of a Government media operation. Such an
approach would appear to breach the long standing convention,
supported by the Ministerial Code, that major announcements should
first be made to Parliament. The Government might also incorrectly
assess the market sensitivity of information it decides to release.
149. Appropriate pre-Budget consultation on specific
measures, especially in the tax field, is to be welcomed. It is
possible that there may also be cases where the Treasury judges
it necessary to canvass views about a measure intended for the
Budget which has not been out put out for consultation. Information
about such measures should be publicly released by the Treasury
in the normal way and, as appropriate, accompanied by a written
or oral parliamentary Statement.
150. While there was no golden age when Budget measures
never leaked, that is not an reason for accepting their occurrence.
Budget leaks in the past have, rightly, provoked measures to prevent
them happening. The Chancellor claims to be operating under circumstances
that make leaks more of a risk: the need to complete his Budget
some days in advance so that the OBR can study it, and the existence
of coalition government. The first of these is no reason on its
own for leaks to be more likely, and there is no suggestion that
the OBR has been the cause of any leak of information. As for
the coalition being a factor, that is also a weak argument. While
more people may be aware of the contents of the Budget, this is
a risk that can be managed. The Treasury has Ministers of both
parties within the coalition and is clearly capable of discussing
Budget measures internally without leaking them, since the Chancellor
and Permanent Secretary are both confident that no leak occurred
from any Treasury minister, special adviser or official. The Government
as a whole should similarly be capable of devising ways of discussing
what may be in the Budget without leaking it. The Committee repeats
the condemnation of leaks of Budget measures stated in our Report
last year; such leaks are corrosive of good government.
151. Coalition government is not a justification
for Budget leaks. We recommend that the Government review its
practices, based on the experience of this Budget, for preserving
Budget confidentiality in a coalition context.
242 Tenth Report of Session 2010-12, Budget 2011,
HC 897, paragraph 4 Back
243
See: Osborne budget plan could mean never having to pay his
debts, The Guardian, 14 March 2012 (http://www.guardian.co.uk/uk/2012/mar/13/budget-government-bonds-debt-osborne);
Government mulls issuing perpetual gilts, Reuters, 14 March
2012 (http://uk.reuters.com/article/2012/03/14/uk-britain-bonds-idUKLNE82D00920120314) Back
244
Osborne will throw lifeline to North Sea oil industry,
The Herald, 17 March 2012 (http://www.heraldscotland.com/mobile/politics/political-news/osborne-will-throw-lifeline-to-north-sea-oil-industry.17044925?_=e72a32b81af08da32dc6250f14ff025ff99ee615) Back
245
George Osborne to reduce top rate of tax to 45p, The Daily
Telegraph, 19 March 2012 (http://www.telegraph.co.uk/finance/budget/9152102/Budget-2012-George-Osborne-to-reduce-top-rate-of-tax-to-45p.html) Back
246
Tax grab on London's top homes, Financial Times, 21 March
2012 (http://www.ft.com/cms/s/0/8846f682-72c1-11e1-ae73-00144feab49a.html#axzz1qPHcCmxs) Back
247
Q 241 Back
248
Qq 242-4; Qq 246-53 Back
249
Q 247 Back
250
Q 250 Back
251
Q 264 Back
252
Q 258 Back
253
Qq 272-4 Back
254
Q 281 Back
255
Q 280 Back
256
Q283 Back
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