Most pundits assume the UK general election will be fought against a strong economic backdrop. The Conservatives certainly hope that buoyant consumer sentiment, including continued rock-bottom interest rates and stable financial markets, will help them secure victory, and even an overall majority, in May 2015.
After David Cameron’s conference speech in Birmingham earlier this month, complete with a promised £7bn income tax cut, some 39pc of voters said it was the Tories “they most trust to manage the economy”, compared to just 19pc backing Labour. It was in the afterglow of that Prime Ministerial speech that the Tories chalked up an overall poll lead for the first time in more than two years. A strong economy, then, will clearly be front-and-centre in any successful Conservatives general election campaign.
What we saw last Wednesday was, by a considerable margin, George Osborne’s most impressive budget. The Chancellor’s Commons set piece, in terms of both content and delivery, was substantive, sure-footed and – here’s the clincher – actually stood for something.
The package of measures in Osborne’s fifth annual red-box wielding ritual were clearly designed to promote business investment, boost foreign trade and unlock pension savings. For once, no post-budget spin was required. The Chancellor has expressed some strong opinions and developed some policies you can hang your hat on. Good – and it’s certainly been a long time coming.
While the microeconomics of Budget 2014 (the individual measures) contain much that is laudable, the bigger macroeconomic picture remains dire. I’m glad Osborne has put his thinking cap on and finally decided to do something. But I remain extremely concerned about the UK’s broader budgetary stance, our massive (and still fast-expanding) national debt and the lack of determination when it comes to rescuing Britain’s public finances from their current parlous state.