If Rachel Reeves was CEO of a company, she’d have been fired by now

Amid the continuing furore over Rachel Reeves’s brutal Budget, shadow chancellor Mel Stride has pulled no punches. He has called for the Financial Conduct Authority (FCA) to launch a probe into “possible market abuse” by people working in the Treasury and Downing Street in the colander-like run-up to the fiscal event. Presumably up to, and including, the chancellor.

His boss Kemi Badenoch put it more bluntly at a press conference held in the City on Monday. “If a chief executive had done this, they’d have been sacked,” she said.

I’ve lost count of the number of times I’ve sat opposite a CEO or finance director at this time of year and watched them gnash their teeth in frustration as a chancellor gets away with behaviour they could never. They know full well that if they were to indulge in the same sort of conduct, they’d be hauled over the coals.

“I know I’d be in prison if I did what they did,” growled a frustrated finance director one year, after a particularly leaky Budget. The “confidential” pre-Budget information in the public domain was having a direct and negative impact on their business, and they were spending half their time handling the fallout.

But what if Reeves were the CEO of a company? Well, Badenoch is quite right: she would have been fired.

CEOs don’t typically leak directly, any more than chancellors do. But they know what’s going on when leaks happen, and they are ultimately responsible. If CEO Reeves quietly told her PR agency to leak a big deal today, for whatever reason, the FCA would be on the phone as soon as it flashed up as breaking news online. The conversation would be short and terse.

An almighty fuss would follow, and if it got out that she was the source – unlikely but not inconceivable – she would have the book thrown at her. Investigation. Censure. A fine, even. If she were at a bank, she might be banned from the City. At the very least, the chair would take her out to lunch and suggest she consider her position. Which, in CEO land, is how you get fired.

Rightly so. Confidence in the markets depends on their being as fair as possible (I’m not naive, leaks will always happen). It depends on the people in charge of sensitive information treating it with due care and respect, and making it available to all at the same time. Reeves wants more people to invest in British companies. They’re not going to do that if they think the game is rigged.

The rules surrounding the handling of market-sensitive information have progressively tightened. When I started out, it was almost standard practice for public relations people to be dispatched to leak details of deals and other corporate shenanigans over drinks to favoured journalists. The infamous “Friday night drop” kept the business sections of Sunday newspapers in business.

Regulatory crackdowns in response to this have seen financial PRs, journalists, and numerous City types dragged through the regulatory mud, censured, banned, fined, and even (on occasion) jailed.

Yet highly market-sensitive information still gushes out of Westminster faster than drinking water from a tap. So it isn’t just top executives who would like to see the immediate imposition of a hosepipe ban. Of course, the FCA won’t lift a finger. It is only nominally independent. Its CEO and board members are appointed by the Treasury through a “fair, open, and transparent process regulated by the commissioner for public appointments”. But Nikhil Rathi won’t rock the boat like his predecessor Martin Wheatley did when he bashed the banks.

It should be said that even Wheatley once got into hot water by playing the briefing game. He infamously granted an interview to The Telegraph, in which he gave details of a major policy announcement that led to insurance companies’ shares falling faster than a paratrooper being pushed out of a plane.

The message the Treasury under Reeves is currently sending to the business community, to the City, to anyone in any regulated function, is “Do as I say, not as I do.” This is unconscionable. The hypocrisy is rancid. The chancellor is the nation’s financial leader. She needs to shape up. Right now, she is setting the worst possible example.