Tuesday, October 09, 2007

Is This Proof that the Pre Budget Was Brought Forward for Electoral Reasons?

Chancellor of the Exchequer Alistair Darling will present his first Pre-Budget Report this afternoon. However, there's an oddity. This was sent to me anonymously...
The Chancellor and the Work & Pensions Secretary are obliged to make an
autumn statement to Parliament setting next year's benefit and contribution
rates. State pensions are statutorily indexed each year to the RPI figure
for the September before the start of the tax year. The Chancellor and
the Work & Pensions Secretary therefore need the September RPI figures for
their statement. The RPI figures are produced by National Statistics; the
ONS website tells us that September RPI figures will not be available until 16
October 2007. There seem to be two alternatives. Either the ONS
will have to rush the figures out, only to be greeted with the inevitable
scepticism derived from past ONS errors, or the Chancellor will take two bites
at the cherry with a further statement regarding pensions and benefits on 17
October. That, of course, is why it was thought that the PBR could not
take place before 17 October.

On the face of it, this is proof that the CSR and PBR were brought forward without the Treasury thinking of the consequences. Unless, of course, you know different...

7 comments:

Anonymous said...

I don't think it would stand up in a court of law unless the opposing barrister was unbelievably hopeless and/or the judge was asleep and/or a Tory. So it probably would then...

Alex said...

Is proof needed? We know that the possibility of an election was being considered, and the evidence from last year's air passenger duty and fuel duty is that these decisions are made by the politicians before the consequences are thought through by the Treasury.

Anonymous said...

A damning report from the Health Select Committee on hospital management was supposed to be released yesterday - where is the news about it?

ITV's Tonight Programme last night was altered without comment or reason given - it was about the closures of A&Es.

What's going on?

Liam Murray said...

I don't have anything like your sources and contacts Iain but I'm led to believe that Brown has always had an issue with IHT (Kirk-background, thrift etc.) and despite his otherwise left-wing views he'd consider scrapping it.

If it's on the cards I doubt darling would get the announcement today and they'd wait till we had a campaign but I do hope Osbourne & Co. have an unflustered, welcoming statement ready should Labour decide to shoot this particular fox..?

Anonymous said...

Superb stuff. I hope you will ensure this gets the widest circulation possible and Osbourne has it for his reply this afternoon.

antifrank said...

Sounds cast-iron to me. I can certainly confirm that state (and many private scheme) pensions are indexed by reference to the September RPI figure, and that it is not usually due out until the middle of the following month.

Unless the Chancellor is proposing that indexation should switch to the Consumer Prices Index or using a different month in future? But both sound implausible.

Anonymous said...

What are the chances of inflation mysteriously dropping for the month that pension increases are calculated, like they peaked conveniently in the month used for student loan interest earlier this year?