The short answer is no.
We needed a Budget last month that focused on setting out the ambitions for growth. Where does the Chancellor see the British economy heading by 2015 or beyond?
This need stems from a fundamental question we have been confronted with since the financial crisis. Where is growth in the UK going to come from in the future?
EEF’s response has focused on seeing growth driven by higher business investment and net trade – this is our view of ‘rebalancing’ the economy and our ideas for an economic strategy stem from this.
Clearly it was bad news then to see the Office for Budget Responsibility again downgrade its forecasts for business investment.
In 2011 we were supposed to see nearly 7% growth; in fact business investment is now estimated to have only slightly expanded at 0.2%.
For 2012, the OBR was expecting 7.7% growth in business investment as recently as November. It now expects 0.7% growth.
Exports have grown strongly; 2011 is 23% up on 2009 despite considerable weakness in our major European markets. This is positive.
However, the substantial boost to growth from net trade that in decades gone by these higher exports may have suggested is negated by the fact that some things now are unable to be made in the UK, so that import substitution has not happened as much as we would like. This highlights the need to invest in rebuilding UK supply chains.
We recognised before the Budget that fiscal loosening was not appropriate given the ongoing delicate state of the UK’s public finances. However, the government has again shown its dexterity in applying a ‘fiscally neutral’ budget by finding sufficient tax and spending changes to fund £21 billion in new tax and spending initiatives.
And this really underlines the importance of having a vision for the economy. Even in these difficult times £21 billion has been applied to government priorities. £21 billion could certainly be used to help growth in the UK economy.
So did this £21 billion focus on growth?
The most positive measure was the further reduction in corporation tax (accounting for about £3.8 billion), meaning as the Chancellor noted that a 20% headline rate is now within reach in the not-too-distant future.
We are also supportive of the government’s current consultation on improving the R&D tax credit and the government's commitment that it will commit at least £200 million to this enhancement. The Aerodynamics Centre is also a positive £60 million investment. But there was not much else in that £21 billion pot.
And some policies, such as maintaining the Carbon Price Floor at the level set in Budget 2011, are putting us at a greater disadvantage to even our competitors in Europe, let alone faster-growing economies further afield.
Moving away from the resources decisions, the spending and tax changes, did the Budget have anything to say about government ambition, the ‘vision thing’?
Two announcements are noteworthy: The ambition to double exports to £1 trillion by 2020 and the Heseltine Review, which loosely seems to be looking at industrial policy.
Of course these are in addition to – but unclearly connected to – the ‘Plan for Growth’ launched at the last Budget.
This continues to bubble away with a random number of actions in the hundreds usually thrown out as a sign of progress.
For us, this does not stack up to a strong enough economic strategy for the Britain of 2012.