Calm seas and a fair wind – a blog by Philip King
20 March 2014
I don’t normally use my blog to address budgets and the like because there are so many commentators out there who are better qualified than me to do so. I thought this time I’d make an exception and wait until George sat down before putting pen to paper, or at least fingers to iPad screen. I haven’t been disappointed by the deluge of summaries and views into my inbox this afternoon though I have to single out the BBC and Moore Stephens for their video summaries that arrived pretty quickly, and the Telegraph for its real time speech extracts combined with commentary. A few things stand out for me.
The improvement in the forecasts of the Office for Budget Responsibility that now predicts growth in 2014 of 2.7%, a return in the output of the economy to the level seen before the financial crisis later this year, and the creation of 1.5m jobs in the next five years are all encouraging. The extended grants to support a further 100,000 apprentices, the increase to 14.5% of the R&D tax credit, and the extension of the small business rate relief for a further twelve months are all similarly welcome announcements for small businesses on which the recovery is so vital. And the changes to savings and pensions seem, on the face of it, to be generally good news.
Perhaps one of the most striking announcements was that UK Export Finance is doubling its lending to £3bn, and cutting interest rates on this funding by a third. There is no doubt that measures to increase the number of businesses exporting and the amount exported are needed. I hope these will encourage more businesses to move beyond the domestic market and widen their horizons.
I heard John Cridland of the CBI say the budget will put ‘a wind in the sails of the recovery’ and I hope he’s right. I believe we’re now in a period of optimism which is edging towards confidence but we’re not there yet, as articulated in the OBR’s warning of possible risks that could threaten its forecasts. I don’t know whether this is genuinely a budget for makers, doers and savers as the Chancellor suggested, and I’m not clever enough to predict the impact of its content. I do though want us to get to that feeling of confidence sooner rather than later. Only then will the economy be where it needs to be.