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Home -> News List -> Budget 2011 - Chamber Response
Budget 2011 - Chamber Response
Evidence has shown us that a recovery from a financial/banking crisis is fundamentally different from that of a cyclical recession, the like of which was last witnessed in the UK the early 1990’s. Growth is sluggish, business investment severely impaired and the transition from recession to recovery fragile at best; all the while, the Government is required to provide significantly more fiscal stimulus than would be considered ‘normal’. The result – large budget deficits and debt growing as a percentage of GDP.
This set of economic circumstances is precisely what we have witnessed during 2010. In this context, this budget, the Chancellor’s second in office, had to lay down a path which must entrench recovery, deliver growth and then, and only then, begin to address the desperately needed reforms to our public services to ensure that such a crisis cannot be repeated.
Commenting on the measures in Budget 2011, Ian Mason, Economic Advisor, Doncaster Chamber of Commerce, said:
"This budget has been billed as the ‘Budget for Growth’, yet the economic forecasts from the Independent Office for Budget Responsibility have downgraded levels of GDP growth expected for the fiscal year 2011/2012 from 2.6% a year ago, to only 1.7% now. Year-on-year growth forecasts have also been revised down for the remainder of this Parliament.
To blame any of this on the ‘inclement weather’ experienced at the end of 2010, is to misrepresent the economic uncertainty prevalent at this time. Weak growth, low interest rates, high inflation and no room for fiscal or further monetary stimulus suggests that growth and recession are finely balanced on a knife edge. Unemployment is at a 17 year high and will continue to worsen this year and families across the UK will continue to witness a decline in their living standards.
This budget presented an opportunity to restore confidence in the business community, reduce barriers to growth and fuel the faltering recovery. Yet the inhibiting factor of the success of any of these measures, as in the instance of the VAT increase, is not the detail of the policy in question, but the timing of its implementation."
