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Entrepreneurs Panel

Julie Meyer
Laura Tenison
Richard O'Sullivan
Debbie Pierce
Brian Hay
David Pollock
Tony Caldeira
Charlie Mullins
Michael Oliver
Steve Purdham
Jennie Johnson
Jeremy Roberts

Zero sums

The Romans organised circuses to keep the vulgar populi distracted from affairs of state. The Coalition Government gives us a royal wedding.

Even if you have had time amidst the rush to get a commemorative Will and Kate plate to consider the Budget, George Osborne still wanted your attention to be diverted from present woes to a brighter future.

The spin beforehand was that it was going to be a budget for growth, a clever strategy considering the fact that we have not yet felt the impact of his major austerity budget last year.

“Ignore the black night and look to the horizon for streaks of dawn”, is the mindset that Coalition politicians want us to follow.

The front-loading of the public service cuts is designed to provide George Osborne with tax cutting options by 2014. In the meantime he doesn’t want us dwelling on present pain and taking it out on Tory candidates in the local council and national assembly elections.

But what does the future look like? The downward revision in growth forecasts doesn’t suggest that by 2015 Osborne can face the voters with a “you’ve never had it so good” message. More likely it will be “the best is yet to come”.

In fact it wasn’t a bad budget in the dire circumstances. The markets were pleased there was no sign of a U-turn on the economic strategy. Although Ed Miliband made the best speech of his undistinguished start as Opposition Leader, in truth it is too soon for Labour to portray itself as credible alternative.

In Ed Balls it has a Shadow Chancellor who has been closely associated with his party’s economic strategy making for nearly 20 years.

Complaints about the VAT increase and the speed of the cuts are unlikely to be enough to build an unassailable lead for the next General Election.

That is not to say Labour will do badly in the local elections. Indeed, if it can’t sweep nearly a thousand Tory and Lib Dem councillors from our Town Halls, the question marks over Ed Miliband’s leadership will grow.

Turning to some of the Budget’s specific measures, I’ve not seen much difference in petrol pump prices, have you? The oil companies have now replaced the bankers as the Government’s Public Enemy No 1. One has a feeling that somehow the poor old motorist will end up paying some of the £2bn North Sea oil levy.

The staged five per cent cut in corporation tax was welcomed by business but the jury is out on the 21 enterprise zones. Those of us who are long enough in the tooth have been here before.

In the 1980s the Tory Government spent £300 million on similar zones. They ended up employing 63,000 people but 50,000 of those were with firms who moved into the zones to benefit from their perks.

The Government is taking few risks this time if the location of the sites in the North West is anything to go by. Manchester Airport and the banks of the Mersey where Peel Holdings already plans its massive Wirral and Liverpool Waters developments are the zones chosen to get planning and tax advantages.

They are arguably economic hotspots already and the zones should have been created in more challenging areas in the region. However they would not have delivered the “quick wins” that ministers crave.

This year and next were always going to be the most testing for the Coalition. I don’t think the main threat will come from the voters.

Bad results in the local and national assembly elections and even a “no” vote in the AV referendum are unlikely to lead to it breaking up.

However, it needs to prove that the pain of the public spending cuts is going to be worth it and, on that front, those famous “events” are not in the Government’s favour.

Unrest in the Arab world and hikes in commodity prices are the most obvious.

But if the Chancellor has been too optimistic on consumer spending, exports and, crucially, the private sector’s ability to mop up unemployment, then the outlook will be dark indeed.

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