Over the past few weeks, millions of people across the UK have been anxiously - or eagerly - anticipating what the Chancellor of the Exchequer, Rachel Reeves, would announce in the UK Budget. The big question on everyone’s mind: would we be better or worse off? And by how much?
For those who aren't familiar, the Budget is the Government’s annual financial plan, detailing how much money it expects to raise and how it will allocate that money to fund public services and priorities.
Leading up to the announcement, the Chancellor and the Government dropped several hints and signals about what potential changes might be included in the budget. For many, these signals pointed to bad news. However, bad news for some could be good news for others.
In other words, the Chancellor and the Government were sharing bad news early, a well-known strategy used by governments and negotiators alike. By introducing the worst-case scenario early, they can gauge the response to it, adjust as needed, and frame expectations to their advantage. The tactic also allows them to soften the blow by announcing that the final outcome won’t be as dire as originally feared, providing a sense of relief to many.
In negotiation terms, this is a classic example of starting with your best-case (or worst-case for the other side) scenario and then countering with something more palatable – likely between the ideal and limit outcome.
There are two things we can learn from this.
First, never accept a first proposal.
Proposals are often pitched at the other side’s best-case outcome (which could be your worst-case scenario). Therefore, never take the first offer at face value. Instead, probe the rationale behind it and explore areas for flexibility. The first offer is just a starting point – it’s usually negotiable.
Second, share bad news early and be specific.
I recently worked with a client on a negotiation involving a price increase for a customer contract. The client was obligated to raise the price mid-term by at least 12.5%, ideally 18.75%. In their initial meeting, the client hesitated to specify the new price, instead telling the other party, “We’ll let you know later.”
This tactic was meant to buy time, hoping the other side would feel pressured to agree later on. However, it was a flawed strategy. By withholding the price, they weren’t creating pressure - they were simply leaving the other side to guess.
Moreover, there was no explanation of the consequences if the price increase wasn’t agreed to. The customer had no clear sense of what was at stake, and therefore, they felt no urgency to accept the new terms. Instead, all the pressure was on the client proposing the price increase - after all, it was their circumstances that had changed.
When we debriefed, my client admitted, “We realised we can’t win if we don’t clearly state what we want, even if it’s bad news.” And I agreed, but with one caveat - it’s not about “winning” the negotiation but about finding an agreement that works for everyone involved.
Like the UK Government, you’ll inevitably find yourself in a position where you need to deliver bad news - whether it’s a price increase, a policy change, or a difficult decision. The key to success is sharing the bad news early and clearly. Doing so allows everyone involved to adjust their expectations and engage in a more constructive conversation. You’ll also have more time to negotiate a better outcome rather than backing the other side into a corner.
And never accept a first proposal - it’s the beginning of the conversation, not the end.
