I was recently on the BBC Radio 4 program Today in Parliament, on the 21st November, you can listen to the full recording here. Below is a transcript of the episode, between 17:34 – 22:12.
Transcribed by TurboScribe.ai
Now, there are only a few more windows for us to open on our budget advent calendar. But what surprises might be left to unwrap on Wednesday? For weeks, months really, various ideas have been floated about what might be in it. Time was when the Chancellor would be barely seen or heard for weeks beforehand in what was known as budget purdah. Well, times have changed.
Rachel Reeves even gave a speech hinting at income tax rises before more hints emerged that she wouldn’t do anything of the kind. The Speaker, Sir Lindsay Hoyle, expressed his annoyance. At one time, a minister would be resigning for anything that was related. So what I would say is this House should be sacrificed in all decisions that should be heard here first.
Well, that Chancellor who resigned after letting slip some details of his budget to a journalist was Labour’s Hugh Dalton in the autumn of 1947. He’d thought it was too late for the journalist to get it into his paper.
A Conservative, Sir Desmond Swain, made the Speaker chortle when he asked the Treasury Minister, James Murray… Given the blatant breach of pre-budget purdah, will the Chancellor follow the proper example set by Hugh Dalton? Yes. Mr Speaker, I fear my history is not good enough to know exactly… I feel embarrassed to admit that, but I’m not entirely clear. But I suspect I probably don’t agree with him, whatever it is. I’ll leave it at that.
Well, I’ve been speaking to the tax expert, Jeremy Mindell, about budget purdah of 30 years ago. Chancellors just didn’t give interviews, didn’t say anything about the budget from about the beginning of January right until the budget, which would normally be about the middle of March.
And why was that? To stop the sort of speculation that you have now. Every different tax measure looked at potentially affecting the market. So it was much more stable if you kept a silence. And not just the Chancellor, but the whole Treasury team, nobody would talk about the budget until it came out of the red box.
When did it start to fray, that idea that you did keep quiet about it in the run up to the budget? Well, I think Gordon Brown was a major contributor to that. He decided to have basically two statements a year, both October and March. And it was felt by some people that was part of it, was to keep him in the forefront of the nation’s attention and sort of reinforce the idea that he was the CEO to Tony Blair being the chairman of the organisation. So it was about politics and personality. Well, quite a lot of it was, although the arrival of 24 hour media obviously made it somewhat more difficult to keep complete silence.
So after Gordon Brown was Chancellor, there still wasn’t really a return to budget purdah? No. I mean, George Osborne did not deploy budget purdah. There were lots of leaks of things. And of course, it blew up in his omnishambles budget because all the good things came out and were leaked and all the bad things waited until budget day. So what was actually quite a balanced budget suddenly became a really difficult budget for the government because everyone’s attention was on the issues such as caravans and pasties and other elements which had not been leaked or trailed beforehand.
Politicians see or they think they see some political advantage to trailing or leaking bits of the budget, but there are real world effects. Oh, yes. So people are making decisions. They’re very nervous. It adds to an idea of economic uncertainty. The other element is that unlike tax geeks like myself, people aren’t looking at the bottom line. They look at the atmosphere. And if they think the atmosphere is not good for entrepreneurial activity, they’ll either stop it or they’ll go elsewhere. And what you see is that it’s led to economic uncertainty, which has probably reduced economic activity and has probably increased the budget deficit.
Would you go back to budget purdah? Do you think you could? It’s obviously more difficult in a 24-hour news media cycle, but I think a concerted effort should be a self-denying ordinance to not comment for at least 12 weeks before the budget. And ultimately, I think Treasury ministers need to have a lower profile and accept that that’s part of their job until it comes to the budget.
Tax consultant Jeremy Mindell.
Transcribed by TurboScribe.ai
