It used to be a strong requirement that no-one in the know leaked anything about the budget. When I was Margaret Thatcher’s adviser I read draft budget papers in controlled conditions in No 10 to protect me and the budget from any leaks. I usually gave my advice to the PM one to one in person. Like the few others who did see the budget papers we never spoke to the press about any of these matters.
This latest budget farago shows why secrecy is a good way to deal with highly market sensitive matters covered by a budget. It is an offence to disclose inside information that can move share prices. When papers picked up the idea that the budget might introduce a higher gambling tax, gambling shares reacted. When someone proposed a bank tax, bank shares fell. When the later leak or comment confirmed no bank tax they rose.
Of course in the run up to any budget many people not seeing the budget papers or helping with the decisions make public comments on likely tax changes and other matters. Share prices may gyrate around these speculations, depending on who said them. This however needs investigation because many people who deal in shares woke up morning after morning to what looked like authentic steers or briefings from inside the advisory and ministerial tent handling the budget data and decisions. When several leading papers and the media all have the same story about likely tax changes there needs to be an enquiry to see if the rumours came from those in the know. It would be unusual if all backed the same hunch of someone on the outside at the same time.
Part of the process was on the record. The Chancellor herself gave a strong steer in her emergency statement from Downing Street about the need for higher taxes, with the implication being she was looking at Income tax.
I do hope the Chancellor reviews the disaster brought about by misleading statements over debts and deficits and over the need for tax rises. Far from pinning the blame for tax rises on past governments she has succeeded in highlighting how the extra tax was needed to meet her extra spending plans, particularly on the ballooning welfare bill.