MP blasts ‘dead-end’ inquiries as Treasury to probe potential Budget leak

An MP has criticised a “doom-loop of dead-end investigations” after the Treasury launched an inquiry into concerns of a potential Budget leak.

The Treasury Committee – a group of cross-party MPs that scrutinise the work of the Treasury – had raised concerns that details of changes to bank taxes emerged before Chancellor John Healey delivered his fiscal statement last month.

An article in Bloomberg contained accurate details that the bank corporation tax surcharge would not return to the previous 8% level and was therefore less severe than the sector had expected.

Chairwoman and Labour MP Dame Meg Hillier said this may have been a leak of market-sensitive information that led to an increase in the value of bank shares.

Responding to Dame Meg’s concerns, Treasury permanent secretary James Bowler said he been “assured” that no banks, their representatives or trade bodies were briefed on the changes to bank taxes before the Chancellor’s statement.

But he said that, on the day of the Budget, there was a “necessary widening of the circle of knowledge within government to prepare for its delivery”.

These people have strict confidentiality requirements and should not disclose information to the media or participants of the financial markets, he said.

The Treasury has launched an investigation led by the Government security group in the Cabinet Office.

Dame Meg responded with scepticism to the letter and the launch of the investigation.

“I suspect that yet another inquiry into the leak of Budget measures will turn up no evidence of a breach but plenty of reassurance that next time it will be even more secure,” she said.

“We cannot continue to accept this doom-loop of dead-end investigations in which everybody in the Treasury throws their hands up in despair, but nobody is ever found to have done anything wrong.

“The Treasury still has questions to answer on how market-sensitive information which was likely to affect the share price of banks was circulating around newsrooms before it was given to Parliament.”

She said Mr Healey would be pressed on the issue when he appears in front of the committee on Wednesday afternoon in a session due to focus on his Budget.