A Budget leak by the London Evening Standard – listing on Twitter the key changes to be made by the Chancellor of the Exchequer George Osborne – has lifted the lid on the lengths to which successive governments have gone in manipulating the presentation of financial announcements.
By mistakenly tweeting its own front page splash on the Budget twenty minutes before the Chancellor had even started his speech, the Evening Standard inadvertently confirmed the extent of the collusion between the Treasury and selected political correspondents.
Why, might one ask, would a Chancellor want his officials to give exclusive details of his Budget in advance to an evening newspaper in London?
The answer is simple: the Evening Standard presents the City of London’s financial markets – and the rest of the news media – with the first considered impression of the announcements in the Chancellor’s red Budget box.
No spin doctor would dare to under estimate the potential impact of the Evening Standard’s front page; after all this is the first serious assessment of the Chancellor’s announcements.
By mid afternoon on Budget days, within an hour or so of the speech, copies of the Evening Standard are landing on the London news desks of national newspapers and radio and televisions newsrooms. An image of the front page might well be reproduced in the early evening news bulletins – and if all the Treasury briefings have gone to plan – the thumbs up from the Evening Standard will, so the government hopes, have a positive influence on other journalists.
When giving his Budget speech (20.3.2012) Osborne was taunted at the despatch box by Labour MPs waving copies of the front page which had appeared shortly after midday on Twitter, and the Chancellor was clearly annoyed at having been upstaged. But he had little to complain about: the spin had worked.
The Evening Standard’s headline “Things can only get bitter” was a play on words which could have been taken two ways but the strap line “Cheers Penny Off of a Pint of Beer” gave an upbeat feel against a background of grim economic statistics.
The headline was a reminder of the way Labour had used D Ream’s dance-pop song Things Can Only Get Better as its theme tune in Tony Blair’s landslide victory in the 1997 general election.
A profuse apology for breaking the Budget embargo was issued by the Evening Standard’s editor Sarah Sands but in trying to explain away how “a very young and inexperienced journalist” had tweeted the front page by mistake in advance of the speech, she drew back the curtain on the hidden world of secret Treasury briefings.
She said the circumstances under which the Evening Standard was supplied with an advance copy of the content of George Osborne’s Budget – in order to meet the paper’s lunchtime deadline – was “an arrangement we have had through successive governments and has always worked”; it enabled the Evening Standard to publish a comprehensive assessment of the Budget within an hour or so of the speech being delivered.
Osborne’s embarrassment was compounded because, as the Labour leader Ed Miliband pointed out, the front-page which was reproduced on Twitter included details of “market-sensitive fiscal forecasts” such as the revelation that the economy would grow by just 0.6 per cent this year, half the rate which Osborne had predicted in the autumn.
Although other Fleet Street journalists have been aware of the special deal for the Evening Standard – and broadcasters providing live coverage get similar preferential treatment – MPs will be none too pleased to discover that even market-sensitive data is being trailed in advance, the kind of inside information which could be exploited for financial gain by traders operating in the London financial markets.
Osborne has asked the Treasury’s Permanent Secretary Sir Nicholas Macpherson to conduct a review into the “practice of the proactive pre-releasing of Budget information under embargo on Budget day which has operated in recent years”; Sir Nicholas will have to report on the “appropriateness of these arrangements”
Kenneth Clarke, Conservative Chancellor of the Exchequer in John Major’s government, has always insisted he was the last Chancellor to honour pre-Budget purdah – the tradition of keeping Budget details secret until the speech.
In 1947, the Labour Chancellor Hugh Dalton was forced to resign after giving a Evening Standard journalist the key details of his Budget – a fate Clarke was always determined to avoid.
But after Labour’s 1997 general election victory the newly-installed Chancellor Gordon Brown re-wrote the Treasury rule book and sanctioned the systematic pre-briefing of his proposals; he aides used the argument that the City of London needed to be forewarned of the likely direction of the Budget, such was the fear that unexpected surprises might upset the markets.
Such was his anger at the way Brown trailed his announcements in order to prepare the ground in the City and the news media, Clarke eventually retaliated. At the 1999 Budget he accused his Labour successor of having engaged in the “institutionalised leaking” of Treasury announcements. Clarke contended there were good reasons why “commercially confidential decisions” should not be trailed in advance.
By 2001 political correspondents were able to argue that the principle of keeping everything secret until the day itself had become “one of the casualties of Gordon Brown’s Chancellorship” – and as they were usually the recipients of these exclusive briefings, journalists were only too happy to be indulged by Brown and his Treasury lieutenants.
In an odd twist to the Evening Standard’s latest apologies – including one from the paper’s political editor Joe Murphy – it was Murphy who benefited from Brown’s mastery of the art of trailing ahead of the 2006 Budget.
Brown had become so brazen in his disregard of parliamentary protocol that he gave Murphy the kind of exclusive briefing which had cost Hugh Dalton his job.
Murphy’s Budget day story in 2006 had many similarities with the ill-fated Evening Standard story of 1947: “Speaking exclusively to the Evening Standard before delivering his annual pre-Budget report today, Gordon Brown said one of his priorities would be ‘making affordable housing available to young people and increasing support for hard working families’.” Brown’s scheme would enable couples to buy a house even if they could only afford 75 per cent of the asking price; the remaining 25 per cent would be bought by their mortgage lender and the government.
In his nine years as Chancellor Brown had demonstrated how judicious trailing of Budget details could influence the news agenda – no wonder George Osborne allowed, in the Treasury’s own words, the continued “proactive pre-releasing of Budget information under embargo on Budget day.”
Since Brown’s day instant forms of communication such as Twitter have transformed the dissemination of hot political news – George Osborne was busily tweeting himself about his 2013 Budget – and the consequence might well be that there will have to be a level playing field for all news outlets; perhaps the special treatment for newspapers such as the Evening Standard will be a casualty of this latest leak.
Illustrations: London Evening Standard 20.3.2013; Independent 21.3.2013.