Budget 2011 - first reactions
As has been pointed out, the big Budget themes were announced in June and October last year. The problems George Osborne faced making this Budget was that economic growth turned negative at the end of last year, the deficit is forecast to grow larger as a result, and food and fuel prices are higher prompting the Bank of England to consider raising interest rates. In essence, he ignored these issues apart from a reduction in the fuel duty levy.
Plans for growing the economy, despite being contained in a 131 page document, seemed to contain little that was new and the Office for Budget Responsibility was not willing to suggest they would raise the long run trend rate of growth (though that's not really surprising since the plans focus on the conditions for growth rather than direct intervention). What growth proposals that were contained in the Budget statement seemed to have little in the way of a theme connecting them.
The Budget contained little if any mention of the hardship that will be caused by the spending cuts and the continuing level of unemployment.
Labour's initial response has been along the right lines. Shadow Chancellor Ed Balls apologised for Labour's approach to bank regulation. He also focused on the risks Osborne is taking with the economy. We are talking about a leap of faith by the government. Labour still has work to do to offer a clear economic platform but we are getting closer.
Stephen Beer, 24/03/2011
| Labour announces proposals ahead of next week's Budget. |