It’s finally done – and it almost feels like a relief. The emergency Budget delivered by George Osborne on 22 June wasn’t just the culmination of a few weeks of frantic number-crunching by the coalition government. Really it was the Budget we’ve all been waiting for since the financial crisis hit in 2007, and the public sector debt started to rack up while the credit bubble deflated.
So now the new Chancellor has started to administer the medicine to help deal with the UK’s sick finances. And whatever you think about the choices being made, we at least all know these are decisions the country will be living with for some years to come. Compared with the dog days of Labour’s last months in power, including numerous bits of legislation that were never likely to last – witness the quashing of Labour’s four-month-old decision to grant unitary status to Exeter – and it all feels a lot more real and urgent.
For the South West economy, it is, however, much too soon to say with certainty what the new government and its priorities will mean. The Budget offers a few pointers but not much more. If there was plenty in the detail of Osborne’s speech to cheer businesses, it still prompted the usual howls of pain from some quarters (private equity says that the capital gains tax increase will hurt the supply of risk capital to entrepreneurial wealth creators, for example).
But at this stage all we really have are a few more answers – and a lot more questions. What will the government’s White Paper on local enterprise parterships say when it comes out later this summer? How will the economy survive the government’s efforts to shrink the public sector and grow the private sector? And will the South West’s above-average dependence on the public sector spell trouble for the region further down the line? If an economy is, on one level, a balancing act between the public and private sector, it’s not yet clear how the rebalancing that’s planned will play out nationally, even less regionally.
There is one certainty, though: we are in for an interesting few months.
Christian Annesley, editor
Also in: July 2010
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Getting warmer
The deals market in the South West is starting to move again. Kurt Jacobs reports.
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The Alan Parsons project
Bristol Water says it has to invest more in its ageing infrastructure if it’s to keep the water flowing. Ofwat says it can’t. Christian Annesley met Alan Parsons, the company’s managing director, to get to the bottom of a very public disagreement.