One might describe the Chancellor's "Budget for business" as progressive: the richest companies will have to meet the cost of trying to stimulate those sectors of the economy that are less well-off. An additional levy on the banking sector of £630m next year will, for example, more than pay for the £425m cost of cutting corporation tax by 2 percentage points. There will also be money left over from the additional taxes now faced by North Sea oil producers, even after the cost of lower fuel duties has been met. It will pay for initiatives such as a freeze in business rates for small companies for another year, as well as the comeback of enterprise zones.
Having asked the Chancellor for an action-packed programme, organisations such as the Confederation of Business Industry can have few complaints about the measures Mr Osborne has unveiled. Here, though, is the risk: the tax rises on the City, the oilindustry and one or two others are real measures that take effect almost immediately. For the most part, the business-friendly stuff they will pay for is aspirational and requires a leap of faith.
Take, for example, those enterprise zones. Do not assume that we are about to see 21st-century versions of Canary Wharf spring up around the country. For while the 1980s' incarnation of this scheme did seed the transformation of London's Docklands, many other enterprise zones were much less successful – indeed, eight of the 10 sites announced yesterday are in areas that were also targeted 25 years ago.
And what about planning? Well, every Chancellor in living memory has talked about easing the restrictions that blight economic development, particularly in the first flush of their early days in office. Mr Osborne may yet find – and this applies to much of the red tape he has promised to scrap – that delivering is not so easy. People get terribly cross when you build major infrastructure projects in their back gardens without talking to them about it at some length first.
While the delivery is being worked on, the bills will be arriving at those companies that are funding the Chancellor's initiatives. A year ago, Mr Osborne was making encouraging noises about helping the oil industry to exploit previously uneconomicresources in the North Sea. Now he has done the opposite. This is not to be churlish. Mr Osborne has got it right this time on the banks, for instance, exempting them from the corporation tax savings others will receive. His desire to begin the necessary rebalancing of the economy appears to have taken precedent over his previous nervousness about the threats of the banks to relocate.
There is also a welcome effort to find some of the money for wealth creation from those who already have wealth but have been unwilling to share it. If Mr Osborne really does manage to find the £750m he predicts from closing down schemes that enable the richest few to disguise their pay, the interests of social justice will have been served.
But we need to be wary. These are only the initial building blocks of the strategy for growth that Mr Osborne and his Cabinetcolleague Vince Cable have been promising us since taking office. Much more is necessary to bring about the transformation the duo so often promise and it will take many years.
Above all, there is the backdrop of the economic outlook to fear. The reason Mr Osborne had to turn to more successful industries for cash yesterday was his desire to deliver a "revenue neutral" budget in these straitened times for the public finances.
The danger remains that the Chancellor's determination to deal with that problem so quickly will mean many of his other plans come to naught. Mr Osborne continues to insist that it is Plan A or nothing, despite the growing evidence – not least his own lower-growth forecast – that deficit reduction will stymie the recovery. But without top-level growth, all the enterprise zones in the world and all the bonfires of regulation will be to no avail.Reuse content