Budget talk: An end to secrecy?

In November 1996, the evening before the Budget, when I was Press Secretary at the Treasury, I had a phone call from No.10. The Daily Mirror had a leaked copy of the Chancellor’s Budget speech. They were planning to print. No.10 was trying to get an injunction – but we needed to make a decision on whether the Chancellor should go down to the House and deliver a midnight Budget. We looked at the content, concluded there was nothing market moving, and Ken Clarke decided to go out for a curry with his Private Office. The world did not fall apart when he gave the speech as previewed in the papers the next day. In 1947 the Chancellor Hugh Dalton famously had to resign after letting slip some details of the Budget speech to a journalist. George Osborne’s resignation letter is not in the post. There are some good reasons for this change in attitude to Budgets. When HMRC need to close loopholes, those tend to be announced in a special press release before the markets open, when the loophole is identified rather than wait and watch revenue haemorrhage until Budget Day. The Treasury has committed to consult more and publish more draft clauses in the document Making Tax Policy Better and in December 2010 published a set of clauses for Finance Bill.

The secrecy that suits the Treasury

But the Treasury is determined to have its cake and eat it. It wants the secrecy that suits it. Most consultation is on decisions already made – not on decisions to come. To quote the Treasury on its draft clauses: “The aim of this consultation process is to provide more certainty for taxpayers and a greater window for scrutiny in advance of the legislative process. The Government would welcome comments to ensure the legislation works as intended. We are not seeking comments on the policy as part of this consultation”. A few separate areas were identified for real consultation. That may improve some implementation, which matters as many tax changes have suffered from poor design. But there are no indications that the Treasury is genuinely opening out the process of making tax policy at the earlier stages where it still exercises an unhealthy monopoly on tax policy advice. Notably it still excludes other government departments from proper contributions to Budget decision making. And Budget proposals are subject to none of the normal rigour of testing through Cabinet committees that, for instance, DWP, faces to get its proposals on benefit changes approved. Recent reports have called for a more strategic approach to tax policy making. In our forthcoming report on better policy making, we set out a series of policy fundamentals which represent the core of good policy making. They include open idea generation, responsive external engagement, robust policy design and clear provision for evaluation. Tax policy in the UK fails those tests too often. Now the Treasury has blown apart the myth of the need for Budget secrecy, the time has come to apply the normal disciplines of policy making – with potential benefits all round.