George Osborne’s second budget was quiet but creditable
SOME people think football is a matter of life and death; on the contrary, Bill Shankly, a legendary coach, once observed, it’s more important than that. Some people billed George Osborne’s budget on March 23rd as a matter of life and death for the government. It wasn’t: the coalition’s big decisions—and big gamble—were taken last year, when the chancellor of the exchequer set out his plan to eliminate Britain’s structural deficit during this parliament. This budget merely restated that commitment. But it also groped towards an answer to an even more important question. As Mr Osborne put it, how can Britain “earn its way in the modern world”? His response, like his plan for the deficit, is broadly right.
Britain’s recovery has proved more fragile than Mr Osborne hoped last June, when he announced the fiercest public-spending squeeze in living memory, plus some tax rises to go with the ones bequeathed by Labour. The economy contracted by 0.6% in the last quarter of 2010 and growth in 2011 is projected to be only 1.7%. Meanwhile inflation has risen (to 4.4% in February), pushing up the welfare bill and putting pressure on household incomes. The Bank of England’s monetary policy committee is split on whether to raise interest rates, but it has got more hawkish. Mr Osborne could have softened the effect of a future interest-rate hike by loosening fiscal policy a jot. Yet by not loosening, he has made it more likely that the bank will delay putting up rates—and he has also maintained his deficit-reduction strategy. On balance he did the right thing.
Politically, that strategy is far from old news. Its real-world impact will begin to be felt only in full next month, when a gamut of tax rises, benefit cuts and public-sector pay freezes take effect. This week Mr Osborne announced some measures designed to make the squeeze look fairer, such as a new crackdown on tax evasion. He pinched North Sea oil companies by introducing a “fair-fuel stabiliser”, which will fund a deferral of rises in fuel duty (currently a big gripe in Britain as elsewhere) through an increased levy on oil production, so long as the oil price stays high. Bashing business is never good, but his swipes at the usual targets were relatively harmless.
And compared with last year’s policies, they were trivial. This budget’s most interesting bits were the ones designed to rebuff those who say the government is better at inflicting pain than at fostering economic gain, and to help win Mr Osborne’s underlying bet: that the private sector will provide the growth and jobs to compensate for the state’s retrenchment.
Growth is a trickier subject than cuts for governments in general and this one in particular. If a chancellor has the gumption—and Mr Osborne seems to—he can bend the public finances to his will. By contrast, he is likelier to hinder growth than cultivate it. Mr Osborne is anxious not to seem the dry neoliberal of caricature: his camp stresses his intellectual debt to Michael Heseltine, an interventionist Tory minister of the 1980s, as well as to Nigel Lawson, a tax-cutting Thatcherite chancellor. But a fully fledged industrial policy does not chime with the government’s world view as fixing the deficit does.
一般来说，经济增长这件事比缩减政府开支要困难一些，而当前的经济增长尤其困难。如果一个财政大臣够英明，奥斯本看起来挺英明，那么他应该想把公共财政怎么样就怎么样。与此相反，比起让经济增长，他倒更加可能妨碍增长。奥斯本对自己不像漫画中的新民主派人士表现得那般机敏感到十分焦虑：在支持团队中，他欠下的一些出谋划策人情债尤其突出，包括80年代的干涉派保守党财政大臣Micheal Heseltine,以及撒切尔执政期间支持减税的财政大臣Nigel Lawson. 但全方位的工业扶持政策并不能像修正财政赤字一样，与政府的世界观保持一致。
Some of what Mr Osborne had to say was depressingly familiar. A plan to create new “enterprise zones” might—or might not—prove more effective than similar, underwhelming efforts in the past. Promises to cut business regulations are good but in the past they have seldom been met. And his sensible bid to loosen up the sclerotic planning regime might be thwarted by nervous local councils.
Mr Osborne’s basic message on growth, however, was that he wants to make Britain a better place to do business. He sees the global economy as a contest to attract increasingly mobile companies; as part of it, he announced that corporation tax would be cut faster than expected, plus some useful incentives for entrepreneurs and investors. (He also floated the idea of merging income tax and national insurance, a complicated ancillary tax: he should have just got on with it.) Like his populist fiddles, these measures were relatively modest, but their thrust was welcome: that Britain can only prosper as an open, trading nation with a thriving private sector.
And a skilled workforce. One of the country’s biggest economic problems is the educational failure of a stubbornly large chunk of its population. Labour’s basic solution was to fix the symptoms of that failure, making exams and access to university easier. This week Mr Osborne found some money for new technical colleges—the hope being that vocational education will one day rival Germany’s, complementing the government’s broader school reforms. That is an even longer-term project than deficit reduction—but even more vital.