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Pre-Budget Report
TREASURY 7
25 November 1997
Chancellor Gordon Brown today met with the Chairmen of the Pay Review Bodies to outline the material he would be presenting to Parliament in his Pre-Budget Report. He has now formally submitted to the Review Bodies the Pre-Budget Report document and a copy of his statement to the House, to supplement the economic evidence published in September. The supplementary material has also been made available to the Remit Groups.
The new procedures established by the Pre-Budget Report prompted the Chancellor to invite the Chairmen to see him. He stressed that he had no wish to impinge on the independence of their position in making recommendations to the Government. But he was mindful of the tight timetable to which they were working and he wanted to alert them at the earliest opportunity to the supplementary evidence they would be receiving later in the day.
The Chancellor emphasised the British economy's traditional proneness to inflationary pressures. But the decision in May to grant independence to the Bank of England in setting the level of interest rates now ensured that the Government's inflation target would be met.
This meant there was a choice for the country: paying ourselves more now and risking higher interest rates later on, or exercising pay responsibility now with the benefit of securing more jobs in the future. A responsible approach by all those involved in pay bargaining, combined with success of the Government's labour market reforms, would allow the economy to grow faster than would otherwise be possible.
The Review Body Chairmen said they were grateful to the Chancellor for alerting them to the new evidence and for the acknowledgement of their independence. They would, as their terms of reference set out, seek to arrive at just and fair recommendations in the light of all the material available to them, which included the evidence of the Remit Groups themselves and their representative organisations.
The earlier evidence to the Pay Review Bodies, published on 16 September, presented the Government's policy and expectations on public sector pay and the economic background to the work of the pay review bodies in framing their recommendations for the coming year.
There is no public spending round this year. Pay costs will need to be contained within existing spending plans. There will be no access to the Reserve to fund spending on pay in excess of those plans.
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Pre Budget 1997 Press Notices index page
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