- 2 December 2025
The Chancellor framed her Autumn Budget as one that would deliver stability. The reaction, however, has been anything but calm.
Past Budget storms
Post-Budget difficulties are not unusual for Chancellors of any political stripe. Cast your mind back to:
- 2012: George Osborne’s ‘Pasty Tax’, VAT on hot takeaway food, reversed within weeks after public uproar.
- 2017: Philip Hammond’s NIC rise for the self-employed – scrapped days later amid accusations of breaking manifesto pledges.
- 2022: Kwasi Kwarteng’s mini-budget – sweeping tax cuts triggered a sterling crash, market panic, and an IMF rebuke, all reversed within weeks by Jeremy Hunt, ending Liz Truss’s short premiership.
The current row
The common denominators? Media outrage, market instability, and broken pledges, leading to loss of fiscal credibility, higher borrowing costs, and reputational damage.
Chancellors often ‘roll the pitch’ before Budget Day, floating ideas to gauge reaction. This time, the row is different: it centres on whether the Chancellor exaggerated the need for tax rises to plug a £30bn black hole, and in doing so misled the Cabinet and the public.
The opposition claims the Office for Budget Responsibility’s (OBR) timeline shows there was no black hole, only a small surplus. The OBR broke protocol by publishing its forecast chronology, fuelling the controversy. The media has also reported cabinet level leaks that the Chancellor was not straight with them over the scale of the problem.
The government insists Reeves sought a bigger buffer to avoid future tax hikes while funding the removal of the two-child benefit cap, a manifesto commitment. As for Cabinet briefings, the official line is that most ministers only see the final brief. Yet leaks suggest unease, signalling potential fractures in trust and authority at the top.
Governance insight
A Budget that should have showcased the Chancellor’s ‘choices’ has instead been overshadowed by negative coverage and reputational risk for the government. The value of sterling rose modestly; gild yields fell and overall the markets gave the budget a cautious thumbs up. However, the i reported that only 22% feel positive after the budget and 51% negative. A YouGov poll in the Independent stated only 10% now trust Labour with the economy.
For governance professionals, this episode underlines a critical truth: major announcements are not just about policy, they are about trust and reputation. When messaging is unclear or contradictory, confidence erodes quickly. Boards and executive teams face similar risks:
- Leaks and mixed signals can destabilise investor confidence.
- Failure to control the narrative can overshadow strategic decisions.
The lesson? Plan communications as rigorously as the decision itself. Anticipate scrutiny, align messaging internally, and ensure transparency without creating unnecessary alarm. In governance, as in government, reputation is an asset that can be lost overnight.