Sunday, April 01, 2007

On The Record: Balls Pensions Porkie

I told you we shouldn't have published any figures

The forced FOI release of internal Treasury papers on Gordo's 1997 Pensions Grab demonstrates beyond doubt that he was warned about the catastrophic consequences for private sector pensions (there's a good summary from the ever dependable David Smith here).

Yet, despite this clear evidence, the slippery Ed Balls still reckons he can get us to swallow more giant helpings of porkie pie.

Yesterday on BBC R4 Today he tried to argue that the papers had been deliberately misinterpreted, reminding us that he'd actually been there when the decision was made. Which is true: in fact as Gordo's right-hand man, he was one of the scam's principal architects.

But virtually everything else he said was untrue.

Take this statement:

"All the money was recycled back into Corporation Tax cuts, and therefore back to shareholders and to pensions."

Unfortunately for Balls, we can look up the real facts in the 1997 Financial Statement and Budget Report (table 2.2):

  • Abolish payable tax credits for pension schemes and UK companies from Budget day; changes for everyone else from 6 April 1999- full year effect on tax revenue +£5.4bn

  • Reduce the main rate of corporation tax from 33 per cent to 31 per cent from 1 April 1997- full year effect on tax revenue -£1.95bn

  • Net impact- increases tax revenue by £3.45bn

To spell it out, contrary to what Balls claims, only about one-third of the money grabbed from pension funds was "recycled back into Corporation Tax cuts".

As with so many of these appalling people, they've told so many half-truths and worse, they can no longer tell fact from fiction.

Why anyone thinks we should trust any of them with anything is entirely beyond me.

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