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A budget for decline

As is usually the case, this is a very political Budget. It will change the economic future of this country hardly at all. The purpose of this Budget is camouflage to distract attention from the Great Axe that is about to fall within the next two weeks and to give the impression that Britain has now been launched on an escalator of growth. If only.

The truth is the opposite. Growth forecasts have already been repeatedly downgraded even before the country is pounded by continuing heavy hits from unprecedented benefit cuts and spending cuts. The same further marking down of the growth figures is expected to pull down the estimate for 2011 to less than 1.9%, well below the level needed to prevent unemployment rising sharply. Worse, the really big flaw in this Budget is that you cannot generate growth by giving incentives to the private sector if the demand to prompt the investment isn’t there. And it isn’t, because the one thing that’s anathema to the Osborne Tories is the use of the public sector to kick-start the recovery.

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