With every Budget leak, certainty – and credibility – drains away.
Budget purdah was a practice where the Chancellor of the Exchequer and their Treasury team remained out of the public eye, refrained from giving media interviews for at least a couple of months before the Budget, and the Budget was prepared under complete secrecy.
Notably, when Hugh Dalton, Chancellor in the 1940s, accidentally spoke to a journalist about half an hour before the Budget, he was dismissed for revealing Budget secrets. No one is suggesting returning to Hugh Dalton’s situation, but it might be worth reconsidering whether there should be so much public discussion about proposed Budget measures.
Budget purdah was maintained until Gordon Brown largely abandoned it when he was Chancellor from 1997 to 2007. During that time, he made two statements a year, and there was significant communication with the press and others about upcoming Budget measures. Some wondered if this was mainly to keep Gordon Brown in the spotlight, given his clear ambition to replace Tony Blair as Prime Minister, which he achieved in 2007.
The situation has, however, deteriorated significantly. This is not a position only adopted by the Labour Party. When they came to power in coalition with the Liberal Democrats, George Osborne’s Budget proposals were also widely publicised before the Budget, leaving few secrets. This was especially true with the ‘omnishambles’ 2012 Budget, where all the positive points were leaked. This backfired on George Osborne, as the only areas that remained secret were the controversial tax-raising measures.
Fast forward to the last two years; the Government was discussing sweeping tax rises for four months after being elected, between July 2024 and the Budget in October 2024. They of course did not discuss this before the election. The speculation undoubtedly contributed to a decline in business and consumer confidence, reducing the economy’s GDP and leading to a larger public finance deficit.
Almost unbelievably, the Government seems to be repeating this tactic this year, with a very late Budget and ongoing speculation about its contents. Almost all commentators agree that the Budget will raise taxes, leading to frenzied speculation about which taxes will increase. Some see this as a deliberate government strategy, so that the final outcome will not seem so bad when it is revealed in the Budget. However, the sad fact is that there is no underlying tax reform strategy or coherent roadmap, which would make the policy easier to understand and plan for. It just seems to be a tactic of finding short term solutions to public finance problems. This causes huge difficulties for businesses, taxpayers and their advisers.
How can the Government, the market, and the public respond to the threat that the tax proposals will simply push industry and people offshore?
There must be a more sensible way to consult and agree on policy because currently, as one accountant described it to me last week, there is chaos with clients worried about attacks on their wealth, pensions, earnings, homes and businesses.
This is not helped by the Treasury team now including someone with a history at the Resolution Foundation of proposing very radical tax ideas, which has led to even more speculation about the Budget. This has undoubtedly affected consumer confidence and economic activity in 2025, causing near paralysis in the housing market and employers deferring investment and recruitment. This has reduced economic activity and led to higher unemployment. Both factors will result in a larger deficit than necessary.
Some proposals may appear in the Budget, others may not, but it is unsatisfactory to play ‘Russian Roulette’ with people’s finances built up over decades by threatening drastic measures, such as abolishing or restricting the tax-free lump sum for the pension, with very little notice to allow financial adjustment.
My advice, because everything is so unpredictable, is to keep calm and carry on. Do not be panicked into hasty measures based on rumours of proposals that may not happen. Indeed, advisers should remind their clients that no government lasts forever and neither do their tax measures.
So, it brings us back to whether reinstating Budget purdah. Wouldn’t it be a good idea to have ten weeks where there are no comments, leaks or interviews from the Treasury team in order to reduce the instability and anxiety caused by the run up to the Budget each year?
Home >Articles > Time to bring back Budget purdah?
Time to bring back Budget purdah?
With every Budget leak, certainty – and credibility – drains away.
Budget purdah was a practice where the Chancellor of the Exchequer and their Treasury team remained out of the public eye, refrained from giving media interviews for at least a couple of months before the Budget, and the Budget was prepared under complete secrecy.
Notably, when Hugh Dalton, Chancellor in the 1940s, accidentally spoke to a journalist about half an hour before the Budget, he was dismissed for revealing Budget secrets. No one is suggesting returning to Hugh Dalton’s situation, but it might be worth reconsidering whether there should be so much public discussion about proposed Budget measures.
Budget purdah was maintained until Gordon Brown largely abandoned it when he was Chancellor from 1997 to 2007. During that time, he made two statements a year, and there was significant communication with the press and others about upcoming Budget measures. Some wondered if this was mainly to keep Gordon Brown in the spotlight, given his clear ambition to replace Tony Blair as Prime Minister, which he achieved in 2007.
The situation has, however, deteriorated significantly. This is not a position only adopted by the Labour Party. When they came to power in coalition with the Liberal Democrats, George Osborne’s Budget proposals were also widely publicised before the Budget, leaving few secrets. This was especially true with the ‘omnishambles’ 2012 Budget, where all the positive points were leaked. This backfired on George Osborne, as the only areas that remained secret were the controversial tax-raising measures.
Fast forward to the last two years; the Government was discussing sweeping tax rises for four months after being elected, between July 2024 and the Budget in October 2024. They of course did not discuss this before the election. The speculation undoubtedly contributed to a decline in business and consumer confidence, reducing the economy’s GDP and leading to a larger public finance deficit.
Almost unbelievably, the Government seems to be repeating this tactic this year, with a very late Budget and ongoing speculation about its contents. Almost all commentators agree that the Budget will raise taxes, leading to frenzied speculation about which taxes will increase. Some see this as a deliberate government strategy, so that the final outcome will not seem so bad when it is revealed in the Budget. However, the sad fact is that there is no underlying tax reform strategy or coherent roadmap, which would make the policy easier to understand and plan for. It just seems to be a tactic of finding short term solutions to public finance problems. This causes huge difficulties for businesses, taxpayers and their advisers.
How can the Government, the market, and the public respond to the threat that the tax proposals will simply push industry and people offshore?
There must be a more sensible way to consult and agree on policy because currently, as one accountant described it to me last week, there is chaos with clients worried about attacks on their wealth, pensions, earnings, homes and businesses.
This is not helped by the Treasury team now including someone with a history at the Resolution Foundation of proposing very radical tax ideas, which has led to even more speculation about the Budget. This has undoubtedly affected consumer confidence and economic activity in 2025, causing near paralysis in the housing market and employers deferring investment and recruitment. This has reduced economic activity and led to higher unemployment. Both factors will result in a larger deficit than necessary.
Some proposals may appear in the Budget, others may not, but it is unsatisfactory to play ‘Russian Roulette’ with people’s finances built up over decades by threatening drastic measures, such as abolishing or restricting the tax-free lump sum for the pension, with very little notice to allow financial adjustment.
My advice, because everything is so unpredictable, is to keep calm and carry on. Do not be panicked into hasty measures based on rumours of proposals that may not happen. Indeed, advisers should remind their clients that no government lasts forever and neither do their tax measures.
So, it brings us back to whether reinstating Budget purdah. Wouldn’t it be a good idea to have ten weeks where there are no comments, leaks or interviews from the Treasury team in order to reduce the instability and anxiety caused by the run up to the Budget each year?
