James Ashton: A change of mindset (and another miracle) would really help the economy

An extra £3bn a year from 2015 to kickstart infrastructure is a drop in the ocean

Outlook It is the one economic miracle conjured by a Chancellor who has begun to look desperately short of tricks. No matter that Britain has lost its triple-A credit rating, the Budget deficit refuses to be tamed and growth is elusive – there are still many more people in work than when the Coalition was formed three years ago.

So it was to be expected that George Osborne paid tribute to the "energy and enterprise" of British companies, boasting with glee about the six private sector jobs created for every one eliminated by the public sector. And in a Budget bare of good news, it is no coincidence that the biggest announcement is focused on keeping that miracle running.

We had more of the same, with employment forecasts revised up and growth forecasts going in the opposite direction. The two can't keep diverging indefinitely. Osborne is gambling that by pouring oil on an already warmish jobs market, he can really heat up our chances of prosperity and growth before the general election.

Slashing tax on jobs in the form of an employment allowance of £2,000 a year towards National Insurance contributions is designed to inspire, in particular, small businesses to get recruiting. If every other small firm in Britain took on one more member of staff, the dole queue would be eliminated.

I'm not sure the appetite is there at the moment, though. The failure to match improved productivity with this surprise march of the workers raises concern that the benefits of an enlarged workforce are illusory.

It suggests too many part-time, low-paid retail and coffee shops jobs and not enough highly-skilled factory workers or financiers – a kind of short-term gain with the long-term pain of our declining skills base stored up for the future. In addition, instead of being laid off, staff are being kept on but on lower pay with little to do while demand has slackened.

Those export markets that Osborne blamed again for Britain's weak growth figures aren't getting any better soon, especially after that little local difficulty in Cyprus cast another pall over the eurozone, home to 40 per cent of what Britain sells abroad. It is one thing tooling up to provide more goods to sell when the pound is weak, but another in finding buyers when their economy is also on the floor.

A lot is asked of our small businesses. The entrepreneurs that set them up must have bold ideas and not be afraid to risk everything to put them into practice.

Then they must have the confidence to recruit, carve out new export markets, invest in innovation and take on the big boys. It is a big ask to do more, especially when access to finance remains elusive.

There is also an underbelly of small businesses that don't want to expand. They are the lifestyle businesses that tick quite nicely thank you, where recruiting new hands would only keep the boss off the golf course.

Many bosses of bigger firms look away and wince on Budget day, cowed by the awfulness of the numbers. Expectations were low before Osborne took to the dispatch box.

Chief executives want consistency from the Chancellor – nothing that will destabilise their long term plans. The gradual glide south of corporation tax to 20 per cent is a good sign that we are open for business and has been welcomed, but I wait to see evidence of more headquarters being set up here.

More positive was the move on pensions, which will require the Pensions Regulator to factor in growth prospects before demanding that companies spend all their free cash plugging deficits.

Wooing home buyers with another raft of measures to help them afford a mortgage perked up the share prices of the housebuilders. It will take more for them to hugely ramp up plans for the number of properties they are planning to finish.

But that was a high point for the hard hat brigade. An extra £3bn a year from 2015, or £15bn over the next decade, to kickstart infrastructure is a drop in the ocean. We need fewer flagship plans to pour money in here and there that never live up to the gloss of the launch presentation. What is needed is a change of mindset to unclog the roadblocks to construction.

The truth is many private investors don't want to build something from scratch. That is a far too risky home for their capital. They want to back something long-term and reliable – exactly how the Chancellor would like to be regarded as he woos business.

If he pulls that off, it really would be a miracle.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn