CONTRACT WITH BRITAIN?: Treasury kids who toy with the future

The Treasury document was produced by three officials and a secretary, and circulated as a draft in early March, department officials said yesterday.

The paper, covering a range of scenarios, looks at the implications for the Treasury should a government adopt them. Treasury sources insisted the document's purpose bore no comparison to the Central Policy Review Staff's 1982 report which gave options for cuts in the welfare state.

Kenneth Clarke's "kids" on the Treasury document were headed by Helen Goodman, a grade seven - the equivalent of the post that used to be known as a principal, a middle-ranking post, which is senior enough for her to be a section head in many departments.

Ms Goodman, in her late thirties, has worked for the Treasury for about 15 years, since graduating from Oxford. She lives with Charles Seaford, an economist who worked with Bryan Gould, the former Labour trade spokesman, and helped write A Future for Socialism, the book setting out Mr Gould's modernising agenda for Labour in 1989. Mr Seaford publishes Prospect magazine and once tried to buy the New Statesman.

According to Treasury officials, the document was produced by the strategy unit which operates beneath the Permanent Secretary, Sir Terence Burns. The unit runs the Treasury's internal budget and seminars and looks at longer-term demands on the Treasury's resources. Treasury officials said the document's aim was to look at the staffing and skills it would require under differing scenarios, including not just the welfare restructurings, but a "no-change" scenario.

"None of the things in this document are proposals," the Treasury said yesterday. Equally, the document's calculations that Britain will fall out of the first division of world eco-nomies, being overtaken by India, Brazil, Thailand and Brazil, with China the largest economic nation by 2015, was not a judgment but a scenario based on extrapolating from trends, an official said.

The document was widely circulated within the Treasury for comment, leading to sections on Europe and the Treasury's internal values being leaked, early on, to the Daily Mail and the Financial Times, ahead of yesterday's more comprehensive outing. It is thought, therefore, that the source of the leak is unlikely to be traced.

The other team members who worked on the document were Fabia Jones, also a grade seven civil servant, George Kyriacou, a higher executive officer (a more junior grade) and Anna Molloy, a secretary.