Stride criticises FCA for not investigating Treasury
Shadow Chancellor Mel Stride has criticised the Financial Conduct Authority (FCA)’s decision to hold back from launching an investigation into whether the Treasury engaged in market manipulation before the Budget, adding that there was a risk of a “precedent” being set where confidential information is leaked “without consequence”.
Earlier on Thursday, FCA chief executive Nikhil Rathi confirmed the regulator had “not commenced an enforcement investigation” against the Treasury.
His letter to Treasury Select Committee chair Meg Hillier came after SNP parliamentary leader Stephen Flynn and Stride wrote to Rathi to call for an investigation.
Rathi said government communications around the Budget were a “matter for parliament through its accountability mechanisms”.
On Wednesday, Rathi said the body had a “specific remit” for such investigations.
The letter on Thursday also pointed to an announcement by James Murray, the chief secretary to the Treasury, that the government would conduct its own inquiry into Budget leaks.
“We have requested details of this work and that the outcome, including of the inquiry into any leak of market sensitive or inside information relating to the Budget, is shared with us so we can consider as appropriate,” Rathi said.
In response to the letter, Stride said he was “surprised” the FCA did not yet launch an investigation “given the clear evidence that leaks of market sensitive information occurred”.
“We cannot allow a precedent where governments leak or misuse confidential, market-sensitive information without consequence,” Stride said.
“The FCA have said they will await the Treasury’s own investigation, so I will be writing again to the Treasury Permanent Secretary to clarify the nature and scope of the leak inquiry, and following up directly with the FCA with further questions about their approach to these matters.”
Stride ‘surprised’ by FCA
Stride has now written to Treasury permanent secretary James Bowler to ask whether he shared the OBR’s concerns about leaks around Budget forecasts and what action he was taking against officials.
The exchange of words comes after civil servants at the Office for Budget Responsibility (OBR) criticised frenzied Budget briefings from anonymous government sources in a row since dubbed ‘The Leaky War’.
The OBR’s David Miles said briefings quoted in media outlets suggesting forecasts had improved, which came in the context of investors reacting negatively to news of the government reneging on plans to raise income taxes, were “damaging” to the organisation.
Opposition MPs have also taken aim at Chancellor Rachel Reeves’ “scene setter” press conference on 4 November where she appeared to lay the groundwork for a breach of the Labour manifesto, though Miles said her comments in public were not misleading.