Paul Sellers
One of the more welcome corners of today’s budget was the announcement that £250 million has been earmarked to help first-time buyers – although they will have to pay the money back.
The Government will offer five year interest-free loans to up to 10,000 buyers in order to help them raise the necessary deposit. This equates to an average of £25,000 per head.
Tim Page
Today’s Budget was trailed as a ‘Budget for Growth’. Indeed, today’s revised forecast from the Office of Budget Responsibility, downgrading its growth prediction for the UK from 2.1 per cent to 1.7 per cent this year, shows just how necessary a Budget for Growth was. And alongside the Red Book, the Government published a Plan for Growth. So how does this measure up?
In the foreword to the Plan for Growth, the Government sets out some of the challenges. In education, we have fallen back in excellence in maths. 50 per cent of all manufacturing jobs have been lost in the last 10 years. Our share of world exports have fallen from 4.4 per cent in 2000 to 2.8 per cent in 2009, whereas Germany’s share has increased from 8.5 per cent in 2000 to 9.0 per cent in 2009. These are important developments and we needed a Budget to confront them.
Philip Pearson
The Chancellor claimed today to have boosted the initial capital for the GIB to £3 billion. But his Budget Book tells another story, with table 2.6 apparently committing £1.8 billion to the bank by 2015, not £3 billion. The bank, we are told, will begin operations in 2012/13. Levering in private finance, “should mean that there is in the region of an additional £18 billion of investment in green infrastructure by 2014-15”. That’s a 5:1 leverage ratio. Based on the Budget Book figures, the bank will have £9bn to spend on green infrastructure by April 2014. This is half the £18 billion the Chancellor referred to in his speech.
Nicola Smith
The OBR have concluded that “looking over the whole five-year forecast horizon, we expect this recovery to be weaker than the recoveries of the 1980s or the 1990s”. Their revised forecast reveals that they expect ILO unemployment to remain at 2.6 million until the second quarter of 2012 (it is currently just over 2.5 million) and that by 2016 they believe 2 million people will still be out of work. Inflation is forecast to remain above target until 2013, with RPI set to stick at above 5 per cent until the end of this year. And earnings growth has been revised down – wages are now forecast to remain below inflation throughout 2012.
If you’re following the budget today, come and join us and others at Left Foot Forward’s live budget chat from noon. Then this afternoon, we’ll be posting up more detailed reactions to George Osborne’s announcements from our policy specialists. Check back throughout the afternoon, or follow us on Twitter (@touchstoneblog) for more.
Brendan Barber
I’ve been at the EEF in London today, to give this year’s Warwick-ACAS Lowry lecture. I wanted to use the opportunity to talk about some of the myths underpinning the government’s programme of fast, deep spending cuts. Here’s some of what I said.
The TUC is no deficit denier. We know that borrowing one pound in every four we spend is unsustainable, and we agree that spending more on servicing debt interest than on educating our children is just plain wrong. What we need is a Plan B.
My concern is that the government’s answer – to slash public spending with reckless speed – is based not on a sound reading of the evidence, but on an ideological zeal to shrink the size of the state. The so-called reforms in the NHS and education threaten the fundamental character of our public realm.
This brutal austerity is being implemented on the back of a series of myths – half truths and distortions that have poisoned our public debate:
Richard Exell
Today’s inflation figures were even worse than expected. Using the Retail Price Index measure of inflation (which unions prefer, because it reflects how workers actually spend their money) prices in February 2011 were 5.5 per cent higher than they were in February 2010; this was worse than the situation in January, when the annual inflation rate was 5.1 per cent and it is the worst since July 1991.
The government would prefer everyone to use the Consumer Price Index measure of inflation, which tends to produce a lower figure, but the CPI results were disappointing too. Using this measure, the annual inflation rate was 4.4 per cent, up from 4.0 per cent last month. Although many forecasters had predicted that inflation would rise, the consensus had been for around 4.2 per cent, and the actual results took many people by surprise.
This is bad news for working people, but there is even worse in the detail of the inflation figures.
Owen Tudor
German Finance Minister Wolfgang Schauble and Luxemburg’s Prime Minister Jean-Claude Juncker have ramped up the pressure over the weekend for a Robin Hood Tax. This follows the decision of Eurozone Heads of Government the week before to back a Eurozone Financial Transactions Tax (FTT).
Tim Page
The TUC launched its Budget Submission today. Our submission, which we produce and send to the Chancellor before every Budget, sets out the policies that we believe the Treasury could introduce to strengthen the economy and to support working people.
This year we call for a Budget for growth and social cohesion. The case for action on growth seems to get stronger by the day. Growth went into reverse at the end of last year. That was before January’s VAT increase came into effect and before the bulk of the spending cuts started to bite. As if those developments don’t make things difficult enough, we now have conflict in the Middle East, which could affect the price of oil, and the devastation caused to Japan’s economy, caused by the earthquake and tsunami, to contend with. The case for urgent action to promote growth is now overwhelming.