by Dr Steve McCabe, Birmingham City Business School

For many who listened to yesterday’s budget there may be a feeling that they are living in a parallel universe. George Osborne’s claim that we have never been better off will be disputed by those whose incomes have fallen in the years since the catastrophe caused by economic turmoil caused by the collapse of banks. The fact that we have a trillion pound debt was caused by the hubris of speculative investors and so called “casino banks”.

That the last government had to save the banks is known but largely forgotten in the spiteful narrative that accompanies contemporary politics.

By and large this was a fairly predictable budget. Most people will feel neutral about their immediate prospects for becoming wealthier. For sure we all benefit from not paying tax on savings. But the rates are so abysmal who really cares?

One significant change that did emerge was the fact that the chancellor lopped £23 billion off his plan to shrink public spending in the next parliament which will reduce the potential impact of spending cuts. Though these cuts will still be severe this is all in the future and who can predict what will happen in the next few years. Be warned, recessions occur every seven to 10 years so we are due another one in the next few years.

What we really need to cure our problems in the long-term is investment in the sort of industries that create real things, like manufacturing that suffered so much under previous governments both Labour and Conservative.

Therefore some of the announcements made today concerning investment in future innovation and research are to be applauded. One in particular caught my attention. This was that loans of up to £25,000 will be available for UK students who study PhDs and research-based master’s degrees.

As George Osborne recognises, ensuring that we cultivate the next generation of skilled and talented scientists and engineers is essential to future success.

It is this sort of initiative that may mean we experience a comeback.

The trouble is, welcome though this announcement is, it may be too little, too late.

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Dr Steve McCabe

Dr Steve McCabe

Birmingham City Business School
Dr Steve McCabe

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