Are we all directing our outrage the wrong way this morning as we contemplate the shambles of Michael Gove's schools building programme and the tattered independence and competence of George Osborne's much-vaunted Office of Budget Responsibility?
I think we may be. Today's real coalition sleight of hand, one which will affect the income of millions for decades to come, is calculated, not a cock-up. It is tucked away on the financial pages – or not reported at all – and the minister in the frame is not a macho man like Gove or Osborne, but mild-mannered Lib Dem leftie Steve Webb, the pensions minister.
We're talking proper money here, a one-off gift to pension funds – at the expense of their customers – worth an estimated £50 - £100bn. I'll come back to it in a moment.
What we did learn on the front pages this morning, that the OBR has been further compromised by some unemployment predictions that were helpfully tweaked to make them 175,000 fewer than originally calculated after the impending spending cuts have kicked in.
Does it help a government struggling to establish, let alone sustain, some credibility with voters, assorted elites and the markets? No, it doesn't. Does it matter much over the long haul? No, probably not, provided they don't repeat this Keystone Cops routine every week.
Why not ? Because all governments screw up. You screw up, I screw up. So do the people next door on both sides. Even the tabloids get things wrong occasionally. What keeps you awake at night, someone asked that most unflappable PM, Harold Macmillan? " Events, dear boy, events," he is supposed to have replied.
It's unsurprising now for two reasons.
No 1: The coalition is in a hurry, it knows it has only a finite stock of goodwill from a public which is nervous and impatient about what the future holds. It should act quickly both to get unpopular decisions out of the way and to make a positive impact with assorted constituencies.
So Teresa May abandons Labour's random stop-and-search policy – section 44 - which will be popular until something goes wrong. Gove announces his expanded academies programme – which is meant to be popular with parents – and then his building cuts – which won't be popular with anyone.
Not least among the irritated will be hard-pressed construction companies which rely on the public sector during private sector downturns. Myself, I don't see classrooms as public relief for Costains or McAlpines and their employees. Gove may be right to say trimming the programme won't affect standards much, the bit that matters most.
Unfortunately, as everyone now knows, they got the lists wrong, not once but twice. The schools secretary is still apologising.
That leads to point No 2: It's not surprising that they did because the same civil servants who made mistakes for which Labour ministers had to apologise are now making them on behalf of the coalition. They are the permanent government and they never get the sack.
At least Gove was gracefully comprehensive in taking the blame – the thing elected ministers are supposed to do - it's not something Gordon Brown was much inclined to do. The ex-PM is an instinctive blamer.
It is a vice which opposition accentuates in politicians who forget their goal is to be in government one day, where similar things can happen to them. I can already hear Ed Balls complaining that Gove "didn't fix the roof while the sun was shining" – or not shining, as is likely to be the economic case for a while.
The failure to get the OBR up and running properly also reflects political haste and a lack of civil service foresight – and may do more lasting damage.
They should surely have realised that locating it inside the Treasury – close to the chancellor's own office – would be asking for trouble. Getting Sir Alan Budd, the temp chairman, to release his jobless calculations 24 hours early – to neutralise Larry Eliott's gloomier Guardian leak – wasn't smart either. Budd (72) is now re-retiring back to Devon, possibly hurt, leaving no replacement. Egg on faces.
On top of which the media seems to have established that the stats were tweaked anyway, from a potential 775,000 lost as a result of the coming cuts in the public sector by 2015-16, not the 600,000 published.
In fairness, these calculations are as much an art as a science – depending on such elusive concepts as the output gap (how much spare capacity is there in the economy?) and the sustainable long-term growth trend ( has it been permanently damaged?), etc.
It's not a crime or even an error, more a matter of judgement and fine tuning, albeit politically convenient for the chap down the corridor. That's why on any given day, the European Central Bank can be upbeat about recovery (today), the OECD can be gloomy (yesterday) and the IMF can warn Osborne (today again) that his 2010 cuts risk renewed recession.
As the PM showed in his own speech to civil servants yesterday, David Cameron and his ministers are putting a great deal of faith – wholesome but probably naïve – in liberating the energies of the "big society" by getting officialdom off its back. When they talk like this they sound like Tory Trots working from a blueprint and a hunch.
Never mind, it is early days and, as ministers like to point out, Labour would have done a lot of cutting too, though not as much or as fast as even Vince Cable was persuaded to do after talking to officials – including the bank of England's Mervyn King – after the Greek debt crisis.
The real statistical sleight of hand performed wasn't about schools or jobless projections. It was the coalition's decision – announced by Webb – to allow private sector occupational pension funds to upgrade defined pensions by the Consumer Price Index (CPI) each year rather than the traditional Retail Price Index (RPI).
Why does it matter? Because the CPI does not include mortgage costs which reflect house prices and therefore tends to be 0.7% lower every year, though currently it's 3.4% against over 5%. Such modest differences add up – very quickly it's 20% off the value of your pension.
Today's Daily Mail – usually more alarmist than the FT – says a £27,000 RPI pension in 2030 will become a £19,500 CPI pension. As usual, the Mail exaggerates the salaries and likely pensions of its readers. And, as Webb points out, they did the same job on state pensions and benefits in the budget, moving upgrades from RPI to CPI, thereby saving £13 bn over five years. It is a "more appropriate" measure, he said. Most pensioners have paid off the house.
It's the latest tweak in many as we grapple with the implications of longevity and rash promises made to employees that could never be honoured. State pension rises were capped at 5% in 1997, at 2.5% in 2005. The state pension age is being raised. State occupational pensions are being trimmed.
Don't think it affects only Old Fartonians like me. It will affect young readers far more. When I last asked John Ralfe, the very independent pensions analyst what he made of it all he said that occupational pensions in the private sector were always a bit of a racket – underfunded and chiefly there to benefit higher management which likes to award itself better deals.
It started to go wrong when the stock market, where so much pension money is invested, went wobbly in 2000 and the new transparency requirements for accountancy – FRS17 – shone unwelcome light on pension liabilities. Firms started closing down schemes to new entrants or shifting from defined benefits based on final salary to cash purchase schemes where the risk is borne by the pensioner. Gordon Brown's famous pension raid didn't help but was small spuds.
Someone said to me the other day: "It is almost certain that the first human being to live to be 150 is already alive," so I suspect Steve Webb – a clever, thoughtful man – is probably right. But I'd still like to see coalition ministers spell it out more clearly.
You have characters left
Please read our community standards.
Closing this window without pressing "Post your comment" will result in your words being lost.
Are you sure?
Thank you for your comment. This has been submitted for moderation.
Your comment has been successfully posted.
Sorry, something has gone wrong and this action cannot be completed. Please try again later.