John Healey’s budget secrecy comes amid leaks on key policies

Former advisers said sealed budgets could trigger backlash over surprise measures

Ahead of Wednesday’s budget, Chancellor John Healey has set up defence-style “compartmentalisation” designed to keep market-sensitive information within the Treasury, even as significant policies have been reported before the fiscal event. The Guardian’s analysis found a mixture of authorised announcements and unauthorised leaks exposing a higher tax on banks, support for the most vulnerable and other major measures. The result is a disclosure process that combines heightened internal controls with advance reporting of several policies.

The military comparisons began in mid-August. The Telegraph said Healey was “on a war footing” to stop leaks he believed had beleaguered Rachel Reeves. The Financial Times described “military-style protocols,” the Spectator cited “classified computer systems,” and the i newspaper reported that officials could sign in only to the parts of the budget document relevant to their work and could not access other sections.

Over the weekend, the Observer reported that Healey was “flabbergasted” by the lack of security around financial information when he became chancellor, adding: “it was so different to how we did things in the MoD.” Healey was known to have been worried that market-sensitive leaks cost Britain billions during the run-up to budgets under the previous government.

The controls did not prevent several major policies from reaching the public before the fiscal event. Reports had identified a higher tax on banks, described as deeply market-sensitive, and an energy-support package for the most vulnerable. The Guardian also reported billions of pounds in extra defence spending, directed toward the British Business Bank and National Wealth Fund.

The Guardian reported a £1bn measure to collect VAT on online sales, under which major retailers including Amazon, eBay and Temu would be responsible for collecting tax due from smaller merchants selling on their platforms. Other reports put the fiscal headroom John Healey was considering in the region of £15bn. Signalling that headroom in advance is known in the political trade as “pitch rolling,” intended to avoid alarming markets or the public.

The Treasury and No 10 also maintained their traditional stream of embargoed press releases in the days before the budget. Recent announcements included a new £1.5bn borrowing facility for local authorities and £1bn for social housing, as the government sought to build a sense of action and momentum about what it was trying to achieve.

Former Treasury advisers said the security routine served more than one purpose. In part, they said, it was meant to deter civil servants and MPs sharing information before a policy was ready. But they also said a hermetically sealed budget was unhelpful because surprise measures could provoke backlash in markets, the media, among the government’s own MPs and from the wider public.

The Guardian analysis said less-trailed policies had tended to go wrong, citing George Osborne’s 2012 “pasty tax” and Philip Hammond’s surprise 2017 national insurance hike for the self-employed. Hammond’s measure had to be abandoned within seven days after a furore among Conservative MPs who said it broke their manifesto promise.

Aides said there was a balance to be struck and that it was not always a good idea to hoard information until budget day.

A former strategist from the Tory years said: “If everything is kept tight, then you end up surprising people. And that’s called a Liz Truss situation.” Liz Truss resigned as prime minister in 2022 after her government’s mini-budget crashed the markets.

According to the Guardian analysis, Healey has begun narrowing speculation about several tax changes, including higher capital gains tax on certain assets and a lower mansion tax on properties worth more than £1.5m. The analysis said this showed Healey had begun to see the virtue of expectation management and limiting surprises on budget day.

The Guardian analysis said there may still be a few fiscal “rabbits out of the hat” on budget day. The analysis said Healey was seeking to combine a “steady-as-she-goes” budget with eye-catching measures designed to show the public that the government was on their side. Taken together, the compartmentalisation, embargoed releases and leaks did not create a sealed process: key policies were public before Wednesday while the possibility of surprises remained.