Minister denies Budget leaks have damaged economy

Chancellor Rachel Reeves is widely expected to increase taxes in her Budget on Wednesday to help fill a multibillion-pound gap in her spending plans.

Ministers had given strong indications the government was planning to increase income tax rates.

Anonymous briefings to the media from government sources had also suggested Reeves was considering the move - which would have been a clear breach of Labour's election promise not to raise "the basic, higher or additional rates of income tax".

However, last week government sources said Reeves had decided against this after better-than-expected economic forecasts.

Governments sometimes choose to leak aspects of their Budget plans to the media, either to test public reaction or prepare the ground for measures so they do not come as a shock to financial markets or voters.

Haldane branded the months of speculation about potential Budget measures a "fiscal fandango".

"That's been costly for the economy," he told the programme.

"It's caused paralysis among businesses and consumers."

He said the Budget process was "too lengthy, too leaky, with real costs".

Haldane acknowledged this "pantomime" had also happened under previous governments, adding that the "budgetary process has been degraded over many years".

Challenged over whether the leaks had damaged the economy, Alexander told the programme: "People always speculate in advance of a Budget and we have always said 'wait until the Budget'."

Defending the government's approach, she said the Budget process had taken place "on shifting sands", with a downgrade to productivity forecasts and "a very challenging global economic environment".

The Conservatives have called for an investigation into pre-Budget leaks, saying they have "real world consequences including for financial markets".

In a letter to the Treasury's most senior civil servant, shadow chancellor Mel Stride said: "Either ministers have approved the widespread briefing of confidential information surrounding the Budget, or serious unauthorised leaks have occurred within your department."

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