The Chancellor Needs To Show He Can Be Dynamic As Well As Cautious

Come on, George, don’t be in thrall to those officials and mandarins – it’s time to cast off your cloak of timidity and become more courageous!


The Chancellor of the Exchequer is unlikely to be short of counsel in the course of the next fortnight or so as he puts together his Budget. He can expect to face a surfeit of advice and argument in favour of this tax change or that spending commitment. Some recommendations will derive from vested interests, others from more benevolently-motivated sources. I, like many others, have put forward my own suggestions on this blog which I hope will find favour. The opportunities and requirements in Northampton represent a microcosm of the needs of our national economy.

Mr Osborne’s supporters and detractors have spent the last two and a half years analysing every aspect of his capabilities. And while many have waxed lyrical about failed strategies or missed targets, his greatest weakness – in my view – has been his timidity in dealing with the mandarins who seem to dictate policy in the Treasury. The Chancellor needs to be more courageous, and demonstrate his personal commitment to the boldness so desperately needed to get our economy moving again. Nobody doubts the credentials and qualifications of the academics and officials who surround him, but don’t forget that these same theoreticians failed to predict the economic slump in the first place! There is more to managing the economy than high-minded theories and complex mathematics and the Chancellor would do well to remember that it is in the order books and cash registers across our country that growth will really plant its roots and flourish.

In that regard, the Government has failed in its mission to get households, customers and businesses using their cash to get things moving. The priority for this Budget must be to deliver a message, not only that the Government is in control of borrowing and the deficit, but also that it has a credible strategy for growth and that it is bold enough to make positive things happen for ordinary people across the country. Mr Osborne’s economic caution has thus far been infectious. It’s time for a new approach – he must shift his focus towards establishing a sense of well-being among people. That will inexorably improve confidence, which will in turn lead to a loosening of purse-strings, naturally stimulating growth. After all, the economy is as much about people as it is about facts and figures – something which the economists too often forget.

There are many measures that he can take to put more money in people’s pockets. I’ve argued previously for extending our green energy targets and reducing our commitments to alternative energy sources. That would take the pressure off those who actually have to pay the growing energy bills. But the Chancellor must also do more to promote smaller, more localised projects. Grand designs are all very well but they take time, whereas small businesses can inject growth and jobs into a local area at a much quicker rate. I’d also urge him to investigate the FMB’s recommendations to cut VAT on home extensions and improvements, which would create opportunities for jobs and much-needed apprenticeships.

Those used to running businesses and household budgets do not have the luxury that the mandarins and bureaucrats enjoy. These are people who have to roll up their sleeves every day to get the most from their money as they sell their wares and seek out customers and opportunities. They need to hear a clear, direct and personal message from Mr Osborne – to hear him demonstrate how this Budget will help them in their individual predicaments and commercial pursuits.

Ultimately, this is not a question of fancy theories or neat public policy solutions. It’s a simple matter of responding to the challenges of the economy in a manner which ordinary people can understand, and to which they can reply with confidence. If George Osborne is to achieve that then he needs to shout loud that he has shed the shackles of cautious officialdom which seem to have dominated economic policy creation so far. It’s not the officials and mandarins who are going to deliver us from recession. If nothing else, I hope that Mr Osborne can break free of the constraints of the Treasury machine and motivate the players in the real economy.