Healey’s military-style budget secrecy fails to stop leaks

John Healey’s attempt to bring defence-style compartmentalisation to budget preparations hasn’t stopped a stream of pre-announcement leaks. The chancellor had been concerned about market-sensitive information escaping, fearing it cost Britain billions in the run-up to previous budgets. But despite the new protocols, many of Wednesday’s measures were already public knowledge.

Why Healey imposed the lockdown

Healey was reportedly flabbergasted by the lax security around financial information when he took over at the Treasury. He believed the drip of information had beleaguered his predecessor, Rachel Reeves. So he introduced what the Financial Times called military-style protocols, with the Spectator noting the use of classified computer systems. The i newspaper described a system where officials could only access their own sections of the budget document.

Yet the leaks continued. A deeply market-sensitive policy—a higher tax on banks—emerged in advance. So did a package of energy support for the most vulnerable. Billions in extra defence spending, directed towards the British Business Bank and National Wealth Fund, also came out early. And a £1bn crackdown on online VAT sales, making platforms like Amazon, eBay and Temu responsible for collecting tax from smaller merchants, was widely reported before the big day.

The dangers of too much secrecy

Former Treasury advisers say the security rigmarole was partly designed to deter civil servants and gossiping MPs from unauthorised chatter. But they warn that a hermetically sealed budget can backfire. Less-trailed policies have a history of going wrong. George Osborne’s pasty tax in 2012 and Philip Hammond’s surprise national insurance hike for the self-employed in 2017—abandoned within a week—are cautionary tales.

A former strategist from the Tory years put it bluntly: “If everything is kept tight, then you end up surprising people. And that’s called a Liz Truss situation.” Healey has begun to see the virtue in expectation management and limiting surprises on the big day. Still, there may be a few fiscal rabbits out of the hat, as he seeks to combine a steady-as-she-goes budget with eye-catching measures showing the government is on their side.

What actually leaked

Stories indicating the level of headroom—around £15bn—were seen as pitch rolling to avoid alarming markets or the public. The Treasury and No 10 also undertook the traditional stream of embargoed announcements, including a new £1.5bn borrowing facility for local authorities and £1bn for social housing. Healey has been shutting down speculation about various tax rises, from higher capital gains tax on certain assets to mansion tax on properties worth more than £1.5m. But if the Treasury really aimed for military levels of secrecy around the budget, the Ministry of Defence might have something to worry about.