Osborne's budget 'big on rhetoric, short on action', says NEF

Osborne's budget 'big on rhetoric, short on action', says NEF

By staff writers
23 Mar 2011

The New Economics Foundation says that the 2011 Budget set out by the chancellor today is "long on growth rhetoric, but short on concrete action to deliver decent jobs and a sustainable economy.”

James Meadway, senior economist at NEF, said: “A clear government strategy is needed to promote those sectors that will drive the new, green economy, including targeted credit creation for low-carbon industries and a Green Investment Bank worthy of the name. Instead we have tinkering and hot air. Osborne promised much but once again fails to follow through.”

On finance and banking the New Economics Foundation is similarly critical - but in a positive way.

“Rebalancing the economy is impossible without a rebalanced banking system. Any plan for regional growth, however bold, will founder without ensuring that local enterprises are properly supported by the financial system,” explained Tony Greenham, NEF's head of Finance and Business

He continued: “We need genuine competition and choice, and we need local and regional banks that both understand and are deeply committed to their local areas. Politely asking the big national banks to support SMEs has as much chance of success as politely asking them to cut their bonuses.”

On young people and joblessness - a growing problem - the economics NGO declared: “It’s good that the government is trying to tackle youth unemployment. But 140,000 apprenticeships and two month work placements will barely begin to help the almost one million young people out of work.”

Dr Faiza Shaheen, NEF's lead researcher on economic inequality explained: “The best bet is to get the economy going again, especially in the most deprived areas where youth unemployment is highest, but the cuts along with rising inflation are likely to dampen the recovery further.”

On climate change and energy, “the Chancellor has demonstrated that the self-professed ‘greenest government ever’ is more of an anaemic beige,” said Dr Victoria Johnson, head of NEF's Climate Change and Energy Programme.

She added: “Done properly, the much called for Green Investment Bank could set us on an ambitious pathway to a low carbon economy. But, what we now have is neither a bank nor does it have sufficient capital to instigate a transformation anywhere near what is necessary. The banking crisis has raided the public purse, now it is stripping us of any chance of meeting our climate change targets or closing the imminent energy gap.”

On planning, Nicola Steuer, the New Economic Foundation Programme Director, commented: "Cutting planning red tape is a welcome step but introducing a model where 'default answer is yes' to any development decision is heading for disaster as far as sustainable development is concerned.

"Until we recognise that local government has a crucial place stewardship role to play, and should not simply 'let through' any proposed development, planning decisions will continue to be shaped by short-term financial interests alone," she concluded.

The New Economics Foundation (http://www.neweconomics.org/) is an independent think-and-do tank that seeks to inspire and demonstrate "real economic well-being." It aims to improve quality of life by promoting innovative solutions that challenge mainstream thinking on economic, environment and social issues.

NEF works in partnership with others who put people and planet first in their economic and social thinking.

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Ekklesia's budget 2011 reporting and comment can be found here: http://www.ekklesia.co.uk/Budget2011

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Keywords: budget | budget 2011 | nef
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