Investigation into pre-budget leaks underway, MPs said

Chancellor Rachel Reeves is backing an inquiry into pre-Budget Treasury leaks that hit business and consumer confidence and moved markets.

The Treasury chief secretary told the Commons on Wednesday that an investigation into pre-Budget leaks, led by senior Treasury official James Bowler, was underway and had “the full support of the chancellor”.

Policies such as freezing income tax thresholds, a pay-per-mile tax on electric vehicles and a tourist tax were reported in the run-up to the budget on November 26.

The media was also told about a downgrade of UK productivity by the Office for Budget Responsibility and a plan to increase income tax rates, which was later abandoned.

Speaker Sir Lindsay Hoyle criticized the leaks, calling them a “Dumb Budget” and reminded the government that the policy should be announced to the Commons first.

James Murray, Chief Secretary to the Treasury, told the Commons: “The Government places the utmost importance on budget security, including preventing information leaks.

“A leak investigation is underway with the full support of the Chancellor and the entire Treasury team.”

Bowler would investigate “security processes for reporting future tax events,” Murray said.

Treasury Select Committee chairwoman Dame Meg Hillier said: “Leaking investigations have a habit of finding no one responsible. But if someone is found responsible, will they follow the example set by Richard Hughes? [and resign]?”

Murray responded by saying he “would not speculate on the outcome of the investigation into the leak.”

Hughes was chairman of the Office for Budget Responsibility (OBR) before resigning on Monday following a budget day error in which a key document was published before the chancellor gave her speech.

The OBR’s early publication effectively confirmed a raft of new budget measures before the chancellor announced them.

The constant stream of headlines about taxes and forecasts for the economy also influenced bond markets, which dictate the interest rates the UK pays on its debt.

A pre-budget survey by Barclays noted that more than half of business leaders said they had delayed investment decisions until after the two months before the budget.

“Hundreds of thousands” of people prematurely withdrew some of their pension savings ahead of this and the previous budget because they were worried about what it might contain, the boss of one of the UK’s biggest pension providers told Radio 4’s Today programme.

Mark FitzPatrick, chief executive of FTSE wealth manager 100 St James’s Place, said: “This time around in the run-up to the budget… there was a lot of speculation… and people are acting on speculation.

“Kite flying doesn’t help when it affects people’s lives.”