Leading article: Between growth and stability lies dangerous terrain for Mr Osborne

In floating the eventual merger of income tax and National Insurance in the Budget, the Chancellor offered one big idea

So much of George Osborne's first spring Budget had been released, leaked or otherwise made public in advance that the only real surprises were the ingeniously-named fair fuel stabiliser, increasing tax on North Sea oil companies, and the one penny reduction in petrol duty, to come in at 6pm yesterday. Even the pleasant novelty of a Budget Day fall, rather than rise, in petrol prices, however, was attenuated by the reality that one penny off – or on – petrol is not at all what it once was.

Which underlined in a way the many constraints on the Chancellor in the run-up to this Budget, many of them far beyond any government's control. The effects of the global financial crisis may be lessening, but in their place we have quite unforeseen turmoil in the oil-producing regions of North Africa and the Middle East, and the natural disaster in Japan, which has cast a shadow over nuclear power and over the prospects for the Japanese economy. Then there has been the sharp rise in UK inflation – a by-product, in part, of the previous government's devaluation of the pound, coupled with soaring food and commodity prices worldwide.

Only then do we come to the constraints that Mr Osborne and his government have imposed on themselves: the measures they are taking to cut the deficit further and faster than many think wise, and the effects of this on the country's economic growth. The downward revision of the GDP growth forecast for 2011 – from 2.1 per cent to 1.7 per cent – was swiftly dispatched by the Chancellor at the start of his speech, never even to be alluded to again.

In all, from the higher reaches of its tone to the small print of its content, this was a Budget that seemed expressly designed not to rock any more boats or frighten any more horses, but to foster an air of stability – in sharp contrast to the rough austerity message that permeated last summer's emergency Budget. It was, Mr Osborne said, fiscally neutral, and from the outset he was careful to make clear that he understood, even if he could not personally feel, ordinary households' pain. The further increase in the personal tax allowance, the freeze on Air Passenger Tax Duty, the postponed inflation rise in fuel duty, the council tax freeze: all had the thread of the "squeezed middle" running through them.

As last June, so yesterday, Mr Osborne offered more than a nod to the Liberal Democrats. The continued rise in the personal tax allowance was not the only measure to bear their fingerprints. The reductions in corporation tax were offset by a balancing rise in the bank levy; the Green Investment Bank was boosted and brought forward; the fuel measures took account of rural drivers. With his enterprise zones, university technology colleges, science parks and regional railways, Mr Osborne offered a hand to localism.

In floating an eventual merger of income tax and National Insurance, the Chancellor offered one big idea to supplement the many small ideas that dotted his Budget. The start of a Parliament is the right time to broach such substantial and potentially inflammatory plans. That the Government will need to apply a great deal of political will to see it through is no reason not to begin.

Had Mr Osborne made stability the theme of this Budget, there would have been little to take issue with. Instead, he styled it a Budget for growth – in response to the chief criticism of his June Budget. And when judged in these, more ambitious, terms, the downward revision for GDP is not all that casts doubt on how much, if any, growth it will generate. The Chancellor's calculations rest on what appear to be highly optimistic forecasts for growth and inflation from 2012 – even if they do carry the imprimatur of the independent Office for Budget Responsibility.

It cannot be taken for granted that the sharp increase announced in the number of enterprise zones, technology colleges, apprenticeships and the like will, of itself, foster economic growth. The worth of enterprise zones is hard to prove; nor are the benefits from quite modest assistance to small business or first-time buyers guaranteed. Each risks having a displacement effect that could leave the economy as a whole pretty much where it was.

Early in his speech, Mr Osborne boasted that the difficult decisions he took last year had brought economic stability, without which there could be neither sustainable growth nor jobs. But, he said, stability was not enough. That is true. Yesterday's Budget, however, may mean that, in the short term, stability is as good as it gets.