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The Budget: growth or bust

Patrick Burns | 11:54 UK time, Tuesday, 15 March 2011

George Osborne outside 11 Downing Street

George Osborne - what will be in his 2011 Budget plans?

"The Chancellor is putting the finishing touches to his Budget."

It's one of those stock expressions beloved of journalists who need to find 'a new top line' when there's really very little new to say until the day itself. We're about to hear it trotted out again and again during the days leading up to George Osborne's second Budget on Wednesday 23 March.

The truth is that apart from one or two 'white rabbits' produced, as if from nowhere, for dramatic effect, the main themes are almost invariably heavily trailed in advance.

We know, for example, that to revive the ailing economies in areas like ours, he will unveil 11 Regional Enterprise Zones where companies will benefit from business tax relief, extended National Insurance holidays and incentives for R&D, start-ups and job creation. Surely several of these zones will be in the Midlands given the scale of the economic challenges we face.

Unemployment is nudging up towards 10% in parts of Birmingham and the Black Country according to the latest figures from the Office for National Statistics.

A recent survey commissioned by the BBC and conducted by Experian identified Stoke-on-Trent and Sandwell in the West Midlands among the areas least resilient to the effects of the downturn and the Government's spending cuts.

It named Wolverhampton as the Midlands city with the lowest skills base: the Business Department reports skills shortages across the West Midlands are costing the UK economy £141m every year. All is not yet lost of course: the department also reported that West Midlands manufacturing contributes £15bn to the UK economy every year.

That's more than any other region.

But if we are to preserve what remains of our manufacturing base then we cannot afford the worrying evidence of a slow-down at the turn of the year to put our fragile recovery into reverse.

That's exactly what Labour say is made more likely by the Government's economic policies, "cutting too far and too fast". Ed Miliband told me during a recent visit to Wolverhampton that Mr Osborne was taking more money out of the economy than was good for private, as well as public sector employers. And he was scathing about ministers' decision to scrap the Future Jobs Fund which he said would leave too many young people unemployed and claiming benefit instead in work and paying taxes.

The only way George Osborne can prove his critics wrong is by delivering Growth. The 'G-word' will be all over his Budget statement like a rash. Just count the number of times he uses it. And it's a political imperative for him as well. He wants that 'G-word' to redefine the political agenda, to get away from the 'C-word' which has dominated it for so long.

Growth, Growth, Growth not Cuts, Cuts Cuts.

Economists who understand these things far better than I do will be scanning his speech for signs that he genuinely believes there are better times ahead during the second half of this Parliament. It's tempting to say we've been here before. Those of us with long memories recall another Conservative Chancellor, Sir Geoffrey Howe, proclaiming his 'Budget for Jobs' back in 1982.

But the reality is we have never seen the like of this. The Coalition Government was brought into being with the over-riding purpose of bringing Britain, as Mr Osborne put it himself  "back from the brink".

For the Government itself, as much as for regions like ours, it's Growth or Bust: if the economy doesn't deliver the goods, more and more sceptics inside Parliament as well as outside it will be left wondering what's been the point of this Coalition.

In the meantime, this is what the Conservative MP for Gloucester, Richard Graham wants to see in the Budget.

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These are the themes I'll be taking up with our guests on this Sunday's Politics Show from 12 noon on BBC One on Sunday 20 March. Among them will be the Chair of the junior Coalition party in Parliament, the Liberal Democrat MP for Solihull, Lorely Burt; and the Labour MP for Walsall South, Valerie Vaz.

I hope that you'll email us with your views on this at politicsshowwestmids@bbc.co.uk
and of course that you will join us for the programme itself on Sunday.

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