Gordon forgets to say sorry
13.12.05It has not been a great fortnight for our Chancellor and would-be Prime Minister Gordon Brown.
First it was Adair Turner's Pensions Commission confirming what almost everyone in pensions has been saying for years - "Brown's pensions strategy stinks".
Gordon Brown plans to have more than 75% of us crawling to him for means tested benefits in retirement. While he may not have an issue with swallowing his pride to get more money (you could not whilst cooking up the MP's pension he is going to bask in one day), most Britons do not like creeping to the State for handouts.
Turner also pointed out how Brown's obsession with means testing scuppers any sense in the vast majority of us saving towards our own retirement, despite the Government endlessly telling us we should. Why would anybody but the wealthy save towards their retirement when all they are doing is eating away at the amount the state will pay them?
Absurd assumptions
Turner also exposed the absurd assumptions behind Brown's future forecasts for spending on pensions.
The Chancellor plans to continue to spend the current amount - just over 5% of GDP - on state pensions for donkey's years to come, despite the fact that there will be twice the number of pensioners to divide it amongst. Unless Mr Brown is a direct descendent of a chap born on December 25th a long time back who had a neat trick with fish and mass catering, future private sector retirees are doomed.
Galling exposure
Turner's report must have been particularly galling for Brown. Setting up the Pensions Commission did enable him and Tony to get away with having no idea how to solve the pensions' crisis before the last election ("we will just appoint a commission that will not report until after the election"). But they really should have found a more pliable puppet than Adair Turner.
Turner fighting back
He has already fought back admirably against Brown's attempts to trash his conclusions by proving that they are affordable and Mr Brown's are not, unless we like to watch pensioners starve - or of course Gordon CAN walk on water after all.
Looking forward, the Government has promised to tell us what they will do on pensions by next spring. If Brown has his way no doubt Turner's report will be used as nothing more than fire lighters over Christmas. But if Tony Blair fancies saving his legacy with some astute pensions' reform, then Turner's name could still become household. Watch that space...
Pre-budget confessions
Brown may well have been more concerned about his pre-budget confessions than being exposed as a failure on pensions by Turner. After all, he was under more pressure than ever before to utter those as yet unspoken words, "Sorry, I got it wrong".
An economic growth rate of just 1.75% when 9 months ago he said it would be 3.5%. And a budget deficit of £11 billion when he said it would be just £6 billion. Surely this time we will get an admission of getting it wrong, if not an apology?
No apology
We must not forget of course that this is the man who plays with the definition of 'economic cycle' any time his Golden Rule is heading for the rocks. But even so, being wrong by 50% on two of the most fundamental measures of your work does not leave much hiding space or room for spin.
Wrong!
Despite the almost deafening roar of chickens coming home to roost in the numbers, Gordon Brown did not say sorry. He did not even say he was wrong.
Disguised miscalculations
Instead, treating us all like we are gullible, stupid or worse, he wrapped up his two huge miscalculations in the smoke and mirrors of context and spin stretched to barely short of breaking point.
But it was a highly unconvincing delivery. Short, fast and babbled - even a Radio One DJ would have blushed.
North Sea
So what is he going to do? Getting your sums this wrong when you have been a Chancellor spending like a Chav on acid and laden with plastic, needs a tax hike far more obvious than the stealthy stuff of the last 8 years. And the public ran out of orifices some time ago. He had to look elsewhere.
At least this time he did have the sense to clobber a group that would not vote for him however close Hell gets to freezing over. The oil industry.
Well, why not? The North Sea has kept the British economy afloat for at least 30 years; we might as well squeeze the last few drops from it before stoking up those old reactors around our coasts.
Buried bombshells
No doubt well aware he was on perilously thin ice with what he did say in Parliament, other bombshells were buried in the small print of the written statement.
Most dramatic was an 11th hour u-turn on his pre-election vote winning wheeze - a promise to let the middle class put residential property in revamped self-invested personal pensions (SIPPs).
Election won. Middle England taken in like the mugs he thought they would be. Even the financial industry shelled out tens of millions of pounds preparing to cope with the new SIPP rush.
Disappearing SIPPs
And then bingo, property SIPPs disappear faster than common sense in a Cabinet meeting. Not in an open admission in Parliament, but in paragraph 5.63 on page 107 of the written report. Open Government? Pah!
Once they had read that far, the industry was incredulous. They were less than four months from launch. In the financial services world, that is like canning the whole Space Shuttle program 10 seconds before lift off.
Worse still, thousands of people have already bought pre-A Day SIPPs from some of the faster moving pension providers and put deposits on investment property. They must be spitting blood.
As we can now see, the property SIPP was nothing but a vote winner that could be axed before follow-through.
What a needless waste of millions of pounds of shareholders' and policyholders' money - and yet more pensions damage from Gordon Brown. Get mad, be frustrated, even vote Tory. Just do not expect an apology.