Instant reactions here. I obviously have not had time to go through the documents in detail.
Darling’s quote: ‘you can’t deflate your way out of a recession’. I’m glad he gets it, unlike the Irish who are openly aiming to deflate their way out of a recession.
The fact that Darling grasps the potential problem of choking off a recovery by tightening policy to quickly.The Tories will scream and shout about it taking four years to halve the deficit but that is a sensible way to proceed.
The extra £1.7bn to tackle unemployment – especially youth unemployment. I’d have preffered more but this is good stuff.
The commitments on child poverty.
Help for pensioners.
What looks like some dent help for small business.
The intention to raise taxes on the highest earners. Obviously it will not be enough to pay back all of the debt, but they must pay their fair share.
Recognition that the UK has a decent export centre in advanced manufacturing, green tech and communications.
A bit too much direct support for the housing market for my liking. Trying to keep down repossetions and help people stay in their homes is all good and well but getting involved in supporting the mortgage market through buying mortgage backed securities (MBS) smells of trying to support house prices. The problem for first time buyers is not having the (rationally) higher required deposit. This doesn’t help that.
The Potentially Ugly
The 2011 growth forecast look pretty bullish – maybe too bullish. Especially the assumption that consumption will grow 2.25% in 2011 – higher than average of 2000-2006.
Overall – I am reassured that Darling ‘gets’ the nature of the problem. I am reassured that he is targeting resources where they will be effective. I am pleased that we are opening up dividing lines on tax. I don’t think we are doing enough over all. But not as bad as I feared.