The one headline the chancellor did not want was anything which smacked of a U-turn or the adoption of a ‘Plan B’. George Osborne therefore made clear there would be no revising of the cuts or tax rises which he set out last year, and which are still yet to bite.

In terms of scale these are what matter. While this year’s measures moved tens of millions or, for the biggest measures, some hundreds of millions one way or another, last year’s budget was an ‘adjustment’ of some 6.9 per cent of GDP over the parliament in taxes and spending cuts. A VAT rise, rises in capital gains tax, switching benefit uprating to CPI, freezing child benefit – these measures will raise huge amounts for the chancellor, and they are only just coming into force.

So against that background this was always going to be a budget about smaller measures. Osborne accepted Labour’s challenge that cutting the deficit was not enough. The party said there had to be a plan for growth and that was how he styled his plans.

Yet the first thing he had to announce was that growth forecasts had been downgraded, last year, this year and the next. The GDP figures from the turn of the year threw into sharp relief the government’s claim that their strategy was already paying off. Even the chancellor probably doesn’t really believe that was about snow. Instead, it was about confidence and a realisation among families that the next two years are going to be very tough indeed. At each economic statement since the election the OBR has revised downwards its projections for growth.

Politicians of all parties say they want to rebalance the economy. The central test for this budget was: does the government really understand what rebalancing the economy means? Does it have a vision for an economy that makes things as well as provides services?

Manufacturing has been doing well in recent months but that has little to do with the government. It is more about recovery from the battering that manufacturing took during the recession, the exchange rate advantage our exporters now enjoy compared to a couple of years ago and healthy demand in export markets.

As the chancellor announced a whole range of measures about rates holidays, science centres, R&D tax credits it was tempting to close ones eyes ( as Ken Clarke did), imagine a change of accent and be reminded of budgets past. No lobby group who has been hauled in to see Treasury or business department officials asking what was needed to spur growth would be left saying nothing had been done. But what is the sum of all these parts?

Labour should be level-headed about judging the individual measures announced. Some will work, some may not, and some were Labour policy anyway.

For example, the Technology and Innovation Centres announced were first suggested by Labour. These are modelled on the Fraunhofer Institutes in Germany which have been successful in turning ideas and concepts into products. It has long been held that Britain is good at conception and design but less successful at translating that into manufactured products. The TICs are supposed to help bridge that gap. On this the coalition has kept our policy and we should welcome it.

Last year the chancellor hit manufacturing with a £2.8 billion cut in support for investment to pay for his corporation tax cuts. In other words he hit the part of the economy that invests and makes things to benefit the rest of the economy. In this budget he gave back some of this by extending the short life asset regime from four to eight years. It is welcome as far as it goes but the main £2.8 billion hit on manufacturing remains. No one should therefore be fooled by claims that the chancellor has shifted the tax system in favour of manufacturing. He hasn’t. He has put a bandage on the wound he created last year.

Enterprise Zones in the 1980s gave business certainty by relaxing planning constraints and giving business rate holidays. In some cases they resulted in welcome new development and regeneration. If they can create jobs in areas of high unemployment such as the Black Country which I represent, we should support them.

But the real issue is: do these measures add up the plan for growth that Labour has been calling for and the chancellor claimed he was delivering? It doesn’t look like it. There was still no overall vision for how the UK can take advantage of the transition to a lower carbon economy, still no real drive to take advantage of our world-leading position in design and creative industries and still not enough of a sense of how the UK will make its living in the years to come. In other words, it looks more like a series of measures to stop people saying they had no plan for growth rather than a real vision for the future of our economy.

As ever, Osborne tried to be canny with the politics on fuel duty. He allowed the Treasury to set expectations of a freeze but it wasn’t hard to see what was coming. Before the Budget I said on TV that he would cut duty and he did. Not many people will be fooled given that the imposition of the VAT rise on fuel (and much else besides) will cost families far more than his 1p cut has given. The chancellor giveth and the chancellor taketh away, except that here he taketh more than he giveth.

And Osborne is gearing up for a fight with Labour on the 50p rate. He will look back to his success on the fight over NICs and see the prospect of a repeat over 50p. Knowing that Labour is committed to keeping the rate, he signalled he is setting up for a pre-election move to get rid of it. He is already planning ahead for his pre-election strategy in a few years hence. He will have raised by then some £50 billion from his VAT rise. Borrowing will be falling and he will be hoping to be in a position where he can gives some back in tax cuts and draw a sharp contrast with commitments made by Labour in the meantime.

For Labour this should mean being wary of acceding to calls to set out plans in detail. Osborne will be keen for us to do that to give him something to work on. We are under no obligation to give him what he wants. The issue for Labour is instead how to win the argument that all the cuts are not an inevitable consequence of the situation we left. We still have more work to do with the electorate in explaining why the deficit is there. This is an argument and a battle still to be won. And it is vital that we win so that a legitimate argument about the speed and scale of cuts can be heard and in so we can show that the Tory response is not the only game in town.  

Photo: HM Treasury