Budget leak theory confirmed?

March 13, 2008

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Pre-budget predictions in the media this year were remarkably accurate. Was this a triumph of journalistic detective work, or evidence that The Chancellor and Gordon Brown, like the Owl and the Pussy Cat, had gone to sea in a spinning sieve?

Yesterday’s pre-budget post listed predictions of what would be contained in the Budget. These were based on contributions I received from colleagues, and from comments published in the press.

I am now sated with the post-budget fare of reactions. The experience has left me feeling that I’ve been fed from a pretty predictable and unexciting menu.

But there is one leadership angle which has not received much attention, and to which I now return. It arises from the remarkable accuracy of the pre-budget predictions.

Didn’t we do well?

The results of the budget predictions have surprised me. Take the evidence I compiled for the post. This can be split into roughly a dozen items. An assessment of the post reveals these predictions:

(1) He has little wriggle room for major surprises
(2) I think he will dodge the big issues …and go for technocratic adjustments in most popular areas like taxation …
(3) …environment …
(4) …and mortgages
(5) Mr Darling has no option but to downgrade his forecasts for the economy
(6) The surge in oil prices may be just the event for the Chancellor to seize upon.
(7) Chancellor Alistair Darling is expected to introduce measures to encourage the use of cars with low CO2 emissions
(8) The chancellor is likely to accept proposals from a report commissioned by the Treasury from Julia King, the vice-chancellor of Aston University
(9) Plastic bags taxed
(10) Beer up [penny on pint favoured]
(11) Wine up
(12) Spirits up

These seem to be remarkably accurate, although just twenty four hours ago they seemed more plausible than of high probability. I didn’t feel confident enough to place an electronic bet.

The list can be seen to contain very few ‘false positives’, and the only obvious errors were of assessing the level of an item, rather than getting the item wrong. For example, booze taxes were under-estimated, and the ‘plastic bag’ environmental tax was made provisional on self-regulation by the supermakets.

My colleagues in the forecasting game always add cautions about the uncertainties which weaken any confidence to be placed in predictions whether they be political, strategic, or technological.

In that light, the overall accuracy seems impressive. Even the weakest of the predictions erred only on the precise level or timing of a change introduced (booze was taxed more severely than was predicted; plastic bags is held back to assess voluntary actions from the supermarket giants). Some were rather obvious and had been pretty-much signalled.

What’s going on?

I argued yesterday, somewhat tongue in cheek, that the Chancellor and Gordon Brown, like the Owl and the Pussy Cat, had gone to sea in a spinning sieve.

But is there something here to get the conspiracy theorists interested? In a recent post, I suggested that Alistair Darling and his aides were following a strategy in planting information with Robert Peston of the BBC, about Treasury plans for Northern Rock.

But neither the Owl nor the Pussy Cat would to jump to conclusions on such flimsy evidence. That would be imprudent. And the Owl and the Pussy Cat would not approve of that, would they?