As I predicted, the 2011 Budget has stuck rigidly to the public spending plans set out in the Spending Review 2010, including spending on services and capital spending.
There are a few minor differences to Departmental Expenditure Plans between SR2010 (Table A5) and Budget 2011 (Table 2.4) but some of these are probably due to simple accounting differences.
What was interesting about Chancellor George Osborne’s speech was he hardly mentioned public spending plans at all. Budgets are normally about “getting and spending” but this Budget speech was all about the taxation side of the equation and only very little about spending. The Budget ‘Red Book’ also seems to contain much less information than usual about the spending plans.
This is probably because the government wants to shift the debate away from ‘cuts’ and onto the ‘growth’ agenda.
Given the latest economic forecast have downgraded immediate growth prospects, they may find that shift less politically helpful than it might have been. Whilst both the Chancellor and the OBR have revised slightly upwards medium-term growth prospects, it is entirely unclear why less growth now should somehow automatically lead to higher growth later?