Erikka Askeland: Rabbits out of hats are not on George Osborne's Budget agenda

SO WHAT exactly does a "Budget for growth" look like? Especially when the government's economic larder has rarely been so bare.

Perhaps the Chancellor George Osborne will use his Budget day in the sun to cancel the proposed 1p rise in fuel duty, which would bring at least a small relief as unrest in the Middle East drives oil prices through the roof. But it is not thought that he will go so far as to put off the 1 per cent rise in employees' National Insurance contributions.

PwC, that bastion of optimism, has also suggested that maybe, just maybe, Osborne will pull some "rabbit out of the hat". They reckon he has a little wriggle room due to the fact that overall government borrowing has been a little less than expected - and could come in around 10 billion below the Office for Budget Responsibility's 149bn forecast this year.

Hide Ad
Hide Ad

Much has already been said too of the 100 million resurrection of Enterprise Zones, albeit these will mostly be in the north of England.

But the Work Foundation think tank has already blown a few holes in the rationale of EZs, arguing that the last time the Tories brought these in each new job created cost the taxpayer around 50,000. That and the vast majority of "new" jobs were actually drawn from other areas as firms relocated to take advantage of EZ tax breaks.

Instead, the Work Foundation has suggested that government should focus its enterprise policy on small to medium sized high growth firms - companies likely to be a major source of jobs and growth during the recovery. It calls for measures to provide focused, intensive support for a small number of firms, rather than ineffective support for a large number.

Now if you live in Scotland and have had any dealings with economic development policy, this suggestion will sound familiar. This is exactly what Scottish Enterprise, which published its four-year plan this week, has been doing for years.

And the plan has been finessed since the big 2007 reorganisation of the group. Sure, there were some noses put out of joint as the quango honed its team of economic dynamos, with some firms that didn't quite meet the criteria being politely pushed aside or sent to the Chamber of Commerce for some extra help.

It's not that any of the rejected were defective - or that they can't join the elite group at some point in the future - merely they weren't as fleet of foot as the 2,000.

Neil Lee, one of the authors of the Work Foundation report, says that Scottish Enterprise is "ahead of the game" on this policy. Which should give some pause for thought for that vocal minority of Scottish Enterprise haters. You know who you are.

The Scottish Liberal Democrats, for example, have promised to scrap Scottish Enterprise, if elected, and replace it with some sort of regional development bank.Otherwise, the group's industry support service would be taken over by government. Lord save us. Of the litany of complaints I have heard in my years of writing about the Scottish business community, one of the loudest is the one about the sheer uselessness of employing people to advise businesses who haven't the foggiest idea about how to run businesses themselves.

Hide Ad
Hide Ad

This at least is something Scottish Enterprise has taken on board, and why its beefed up account management programme will work better as it employs sector specialists to work with high growth firms.

But it is also the case that Scotland is ahead of the game because it has kept its economic development agency, while the coalition government abolished those in England. The regional development agencies weren't perfect - and even the biggest fan of Scottish Enterprise wouldn't say it was either - but at least it has an evolved, consistent strategy for business support.

If you hang out enough with economic policy wonks, it is easy to get the feeling you have heard it all before. Companies that grow need employees with sufficient skills, decent communications infrastructure - roads and wires - and access to finance. Throw in some decent advice in the form of people who have been there, "mentors" if you will, and it all sounds pretty plausible.

In England, it's revolutionary. But if you think you've heard it all before it is probably because you heard it here in Scotland first.