Doubtless the UK Treasury hoped this technical change in the discount rate used to value public sector pension schemes, which has no impact on their real cost, would go unnoticed (“ Pensions shift to cost £4bn in cuts”, September 8). The timing and manner of the proposal are particularly dubious. After a major review of the discount rate in 2011, the government committed to review its level every five years. In the 2016 Budget a change in the rate (to the consumer price index +2.8 per cent), to apply from April 2019, was announced.
Now, just before a major fiscal event where the chancellor will have trouble balancing spending commitments and his fiscal rules, and before the outcome of the last review is even implemented, the Treasury quietly changes the rate.
The suspicion is that this was driven by the need to hide the extent of cuts to public services that would otherwise have to be announced.
Pensions Office, Prospect, London SE1, UK
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