Brown rejects call to follow corporate rules on pensions
Following public company accounting standards would halt spending plans, claims chancellor
Government accounting for pensions should mimic standard for the private
sector, according to a Treasury select committee member.
Appearing in front of the committee earlier today to face questions on this
month’s Budget, chancellor Gordon Brown was asked by Tory MP Brooks Newmark
about the transparency of the government’s accounting for pensions. He suggested
it should follow standards set for public companies, where pension liabilities
appear on the balance sheet.
Responding, Brown said that the government followed internationally agreed
accounting standards for the public sector; the same method that had been used
by previous government. He also argued that if pension liabilities were moved
onto the balance sheet, it would affect the government’s deficit figure to such
a degree that all investment projects would have to be halted.
Brown was also accused by David Gauke, conservative MP for south-west
Hertfordshire, of bucking the trend of raising taxes the budget immediately
after a general election – throwing the economic and election cycles out of sync
– paving the way for Brown to call a snap election ‘when you become leader in a
few months time’.
The suggestion was rebuffed by the chancellor, who claimed that taxes had not
risen because they did not need to as the balance between taxing and spending
was right.