Towards a balanced economy - patience and resolve

The 114-page budget document does talk about rebalancing, pointing to the government's 'Plan for growth', published last year. That strategy "lays the foundations for a more stable economy, built on enterprise and private sector investment, with UK exporters able to take full advantage of increasing global opportunities and the UK well placed to compete in the knowledge-based world economy". Certainly, according to the OBR forecast for the components of economic growth contained within the budget document, rebalancing there is expected to be. Household consumption, which fell last year by 0.8%, will grow, but at low levels – 0.5, 1.3, 2.3, 3.0 and 3.0% from 2012-2016. Business investment, which was a mere 0.2% last year, does much better – 0.7, 6.4, 8.9, 10.2 and 10.1% over the same period. And investment in dwellings, both public and private, is an area that sees large growth. Last year, it was 1.8%, but it goes from 0.2% this year to 10.5% next, then 11.6, 9.9 and 9.7% from 2014 to 2016. Government spending – -1.1% last year and flat this year – is in negative territory from 2013-2016. And this is in line with Chancellor George Osborne's plans – "Britain is going to earn its way in the world... It [the budget] unashamedly backs business...[with this done through] far reaching tax reform". He pointed out that a disastrous model of economic growth had created huge debts. It was a model "that saw manufacturing almost halve as a share of our national economy, while the national debt doubled". There was no repeat of the 'March of the makers' catch line from last year – perhaps the pace of that march is just too slow to chance it. But rebalancing will surely take years. Judging by the figures above, by the time we enter 2014, the strength of the business, and manufacturing, recovery should be much more visible – although the man in the street probably won't be feeling much richer on a personal level, as we will still be paying down our spendthrift ways. No, it will likely take many years before rebalancing delivers a general financial fillip at large. There will be many more such budgets ahead, as slow progress is made towards a rebalanced Britain. It will demand patience and resolve. First published in Machinery, April 2012