There are leaks and there are leaks, but this feels like the Treasury pulling the plug out with the bath full and ready!
Take a look at the timeline of the Times’ story (12.01am); this is no idle tittle-tattle from the corridors of the political lobby, this is an announcement from the Treasury, embargoed till midnight last night.
This is not the Chancellor speaking, he speaks in 11 days time . This is a carefully placed story that is designed to manage expectations and perhaps public sentiment.
Just what that sentiment will be -relief or disappointment – apathy, anger or joy – we don’t yet know. It is not beyond the bounds of a spin-doctor’s (mal) practice, to be simply taking soundings.
The announcement certainly took pension experts like Tom Mcphail by surprise, here he is speaking with the BBC on Wednesday about Osborne “doing nothing”
Despite being wrong-footed , the press have been quick to react.
You can read here the triumphal Daily Mail, Paul Lewis is more circumspect!
The best discussion I have heard has been between Mick Mcateer and Mark Garnier who sits on the Treasury Select Committee). You can listen to it at min 44 here..
Conviction politics a little bit too risky?
The Chancellor – according to the Times, – cannot risk upsetting back bench MPs. Earlier in the week Cameron was reported to be calling for no radical measures on pensions to keep the Britain In campaign on track.
The story isn’t just about political motivation (putting party and personal reputations before proper Government), it is about the seriousness of Government to get to grips with big ticket items, in the short term the deficit, in the longer term how we fund the welfare of the old.
The story is partly about how these consultations work. Many of us have found the process from the announcement of the intent to deliver radical reform a year ago, through the clear trumpeting of change in the Autumn Statement to the feverish activity of the past few few weeks, waring.
Unless Osborne declares a moratorium on change to the pension tax-relief system, that cycle of disruption, pre-planning, speculation and ultimately anti-climax could be repeated over and over.
Certainly that’s how the news was greeted by FT journalists who have covered this story from start to (seeming) finish.
If not now- when?
Of course pensions is only one of many levers that Osborne can pull to manage the deficit and of course doing nothing has always been one of the three options he has on the table.
But the particular timing of the EU referendum was anticipated some time ago, it is not something that Government has had thrust upon them, it is a referendum of their own making. Which suggests – at best – a lack of joined up thinking – at worst a cynical manipulation of the political agenda to suit a particular school of thought “the in party”.
A Treasury source said now was not the time to make changes to pension tax relief.
A Treasury source is also reported by the BBC as saying
“He’s listened to what people have said and concluded that now isn’t the right time, with uncertainty in the global economy and reforms such as auto-enrolment still bedding in, to turn things on their head.
“It is also clear that employers wouldn’t welcome a wholesale change in the way they administer schemes. So he is not going to tear up the system of pension tax relief. There won’t be any changes to tax relief at all in the budget.”
The BBC’s political correspondent doesn’t buy any of this stuff.
BBC political correspondent Eleanor Garnier says the decision is a recognition of how fragile the EU referendum campaign is – avoiding the changes removes the risk of upsetting voters ahead of the vote in June.
It would appear that pension reform is a whimsy that can occupy the Treasury for a year and then be cast aside.
Is it really result of uncertain times in the Global Economy (when is ever certainty).
Is Osborne petrified of employer opposition (since when do Turkeys vote for Christmas)
And does the In campaign really believe middle England will see pension tax changes as a trigger to vote “no” for Europe.
On that final point, if the European question is so important that getting it right (for Dave and George) means abandoning pension reform, I’m beginning to think that we should get out. At least then we could have some decision making that isn’t quite so Machiavellian!
No way to run policy
My favourite comment on twitter about this, comes from Mike Crowe
- This is clearly an orchestrated leak from the Treasury
- It is not the word of the Chancellor (but taken as good as)
- It does not stop him from saying what he likes in the Budget
- But it makes it hard for hm to pull pension rabbits from the hat
And there are going to be a lot of very relieved bunnies in the pension hutch; a lot of very confused economists trying to work out just how George Osborne will ever balance the books. There will be many asking Claer Barrett’s question- “if not now – when?”