Cicero Policy Briefer

Issue 7, December 2006

Pre-Budget Report: Cicero analysis

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Overview

By Iain Anderson

Gordon Brown's final Pre-Budget Report was dominated by the mantra which opened New Labour's term in office—Education, Education, Education.

In a speech utterly dominated by planned spending on education, the Chancellor has set out his philosophical and personal political agenda for the forthcoming Labour leadership election—if indeed he is challenged by anyone in his party after such a towering performance at the despatch box.

And the package of measures reads like a typical Brownite shopping list —£60m a year towards research, an 'earn to learn' programme, summer schools, support for NEETS (those who are not in education or employment), bursaries and volunteering to reduce university fees. And there was more, a lot more. It seems the Leitch Report which has called for the number of unskilled workers to be reduced from 6m in today to 0.5, by 2020—has hit home.

And the politics of this set of priorities could not be more interesting. The Education Secretary Alan Johnson—and deputy Labour leadership contender—has some very good news to deliver and implement in coming months. Perhaps the Chancellor is working towards a joint ticket!

Beyond education—infrastructure was the theme and the Chancellor also used his speech to display his green credentials—especially by doubling air passenger duty—for Brown knows that this is an agenda which Cameron's Conservatives will continue to present themselves as the more environmental option

However, anyone waiting to hear about extra funding for welfare or for the NHS would have waited in vain—there as barely a mention. But we did see the much expected announcement that the ISA regime will be extended indefinitely—but we did not see an increase in ISA limits at this stage. Again—as expected—the Chancellor did announce that the Treasury will adjust some of the rules around pensions tax simplification and especially Alternatively Secured Pensions.

So anyone waiting for any surprises today will have been sorely disappointed but the Chancellor could not have made a better fist—clunking or not—of his final PBR to set out his agenda!

Iain Anderson can be contacted on +44 (0)20 7665 9532 or click here to email.

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