Budget2011: Papers divided on Osborne's growth gamble

THERE IS NO doubt that this was a Budget for businesses – but the papers were divided as to whether it was a Budget for growth.

The Telegraph is unequivocal in its support for the measures. “This was not a Budget for consumption but for investment and exports, from a Chancellor who has listened hard to the appeals of the business community. As a consequence, it was unashamedly pro-business – given our current plight, that is as it should be.,” its leader states.

The Financial Times understood the strategy, saying that the “audacious gamble” to rein in the state’s finances to bring the confidence needed for businesses to invest and expand “remains justified”. Although the recovery remains “uncertain”, the private sector “may become a bit more willing to pull its weight”.

According to The Times, “Osborne showed imagination and intellectual initiative in using the limited tools that are available to government to produce growth”.

The strategy is a good one, it says – “The question is not so much the rationale for that framework for growth as its effectiveness.”

The Guardian, however, warns that this Budget was part of a strategy “that is already failing”. It adds: “Despite his talk of a growth strategy, Mr Osborne’s real hope for an economic renaissance is just that – a hope.”

Although picked up the other nationals, the Guardian was most stark in its assertion that the talk of growth “was undermined by his admission that GDP growth was weaker last year than his officials forecast – and will fall short again this year and next”.

According to the Independent, the chancellor’s calculations “rest on what appear to be highly optimistic forecasts for growth and inflation from 2012”. This Budget signals that “in the short term, stability is as good as it gets”.

All the papers agree that Osborne was limited in his ability to offer tax breaks. “The need to cut the deficit means that Mr Osborne has little scope to cut taxes,” says the FT. “He used what room he has to help businesses a little, cutting corporation tax faster than he had previously promised.”

The FT, Guardian and the Telegraph pointed out that any tax giveaways, such as the cut in corporation tax and the raising of the personal allowance, were offset by changing the indexation of the tax thresholds. “A modest rise in personal allowances will, within a few years, be largely swallowed up by the decision to raise income-tax thresholds in line with the CPI measure, rather than the higher RPI.,” says the Guardian. Osborne will not be happy to see this referred to as a “Brownite sleight-of-hand”, by his principal supporter, the Telegraph.

Osborne as Brown – a similarity bizarrely pointed out by the shadow chancellor and former heir to Brown, Ed Balls – was highlighted by the Guardian. “Mr Brown was another chancellor who set out his macro-economic stall firmly and early, before focusing on a lot of tricksy, clever-clever micro-measures,” it says.

There was a lot of politics involved in this Budget, including PR, the papers agree. While Mary Ann Sieghart writes in the Independent “no wonder Nick Clegg looked miserable”, its leader writer insists that Osborne offered “more than a nod” to the Liberal Democrats. “The continued rise in the personal tax allowance was not the only measure to bear their fingerprints. The reductions in corporation tax were offset by a balancing rise in the bank levy; the Green Investment Bank was boosted and brought forward; the fuel measures took account of rural drivers.”

Perhaps the real winners in all this is the Sun, however. Whereas the front page of the Mirror decides that Osborne “has taken the p” in his “bodget Budget”, the Sun revels in Osborne’s declaration that he “could not let Sun readers down” by offering motorists no tax breaks, relegating Elizabeth Taylor to a sidebar in the process. The rest of the nation will hope that the Budget will not lead to growth going for a Burton.