Reckless Gamble isn't paying off.

Just yesterday this blog speculated on what the need for a budget of growth for Medway – specifically for those areas deepest in urban Medway that have been identified as being the hardest hit from public spending cuts.

The headline is that the Office of Budget Responsibility (OBR) downgraded its growth forecasts from 2.1% to 1.7% this year and coupled with inflationary pressures, people across Medway are suffering.

Government policy today is clearly hedged on private sector employment picking up the unemployment figures from public sector job cuts.

In areas such as Medway – with the three largest employers being the NHS, the university sector and the council – this is crucial to families right across the towns, and indeed carries similar implications for the whole region. Whilst we wait to see if this Governments bet is correct we should be fighting for these areas to get the most efficient resource and support for private sector growth – such as campaigning for Medway to become one of the today announced Enterprise Zones – sadly, we will not get a look in!

Tackling unemployment is particularly important to young people in Medway, with the area facing youth unemployment rates (for 16-24 year olds) that are at their highest for decades. Medway must counteract the so called 'Brain Drain' and retain young graduates, as well as supporting non-graduates, to ease transition into employment. Whilst the budget today announced increased apprenticeships and work experience places, Nick Pearce in the FT rightly commented that neither of these programmes is as generously funded as Labour's Future Jobs Fund, which was scrapped by the current Government.

However, there were some positive announcements for people in the Medway today, the reduction in Fuel Duty is good news for many – both in urban and rural areas, such as the Peninsula, with limited public transport and long travel distances – but the 1p decrease should be viewed in the context of the 3p VAT rise (which isn't being altered) and the possibility of significant fluctuations in global oil prices, which the 1p decrease won't prevent.

But what does this mean to people living their daily lives in Rochester, or Strood or Chatham?

One has to remember that people are being bombarded from every angle, with the IFS accusing the treasury of giving a little with one hand and taking a lot with the other.

Personal taxation will play a crucial element, with reports concluding average households suffering a £600 decrease in available income each year.

George Osborne's budget priorities are also somewhat concerning. It seems that the focus is on private sector growth – which isn't a bad thing in itself – but at the behest of ordinary people and the public sector.

It will take a number of days to unpick the detail of today’s budget, and the months and years ahead to verify its impact. Budgets are an example of political theatre but they do matter.

The take-home message today is the continuation of the Government’s dangerous gamble that the private sector can pick up the pieces of billions in public sector cuts, imposed too deep and too fast, by this Conservative-led Government.

Budget blues spell danger for Tories

Do you really trust this man?

Tomorrow will see George Osborne unveil his second budget since coming to office almost a year ago and its clear that the wheels are falling off this reckless strategy of cutting too far and too fast.

On deficit reduction the chancellor has shown leadership of sorts, but on growth, he has been absent from the debate.

The biggest test of the budget is whether it is good for growth, and the biggest risk to recovery is complacency about the ability of free markets alone to deliver recovery.

We have seen too much complacency from Tories on growth. The recent budget meeting on Medway Council saw Tories salivating at the prospect of slashing local services for people. Now they appear in abject denial about a cumulative £30m cut to local services which is somehow a positive development.

A bit of honesty though is too much to expect from Tories worried about an electoral slap in the face.

Anyway, if Gideon is listening, the data should have been his wake-up call. GDP figures for the last quarter of 2010 were alarming, showing the economy contracted by 0.6%. The government blamed snow, but it snowed in Germany and the US too, and they still grew.

The second wake up call should have been last week’s unemployment numbers, the highest in 17 years. Combined with falling house prices, and today’s figures showing inflation rising to 4.4 per cent, it is hardly surprising the government’s independent Office of Budget Responsibility have consistently downgraded their 2011 growth forecast at every chance, from an initial estimate of 2.6%, to 2.1% now, likely to be downgraded to 1.8% tomorrow.

Plan A is not going according to plan. These facts should be the wake up call the government needs to rethink.

Mr Osborne’s fall-back – his implicit Plan B – was looser monetary policy. But with the MPC currently split over whether to increase rates, and a consensus emerging on a rate rise in the late spring or early summer, Plan B is looking as forlorn as Plan A.

Jonathan Portes, writing in the Financial Times recently, said this

“…relies on an odd view of market psychology, one that says markets have more confidence in governments that never adjust policy, even when it is sensible…History suggests the opposite: that the real hit to credibility comes from sticking to unsustainable policies.”

Now is the time for a credible and substantial growth strategy.

First and foremost, we need to begin building the Britain of the future. In particular, what we do need is action to help hard-pressed families with the rising cost of living and removing barriers to growth.

This should include Ed Miliband and Ed Balls’s proposals for a £2 billion bank bonus tax to create 110,000 new jobs:

• The provision of a £1.2bn to fund the construction of more than 25,000 homes;

• A £600 million fund for youth jobs; and

• A £200m boost for the oversubscribed Regional Growth Fund.

But we also need to see the government publish the still outstanding green paper on growth and we need it quickly.

The public recognise the need for austerity, but they also want to know the government have learnt the lessons from the crisis, and that they are determined to build a fairer and more sustainable economic future for Britain.

Britain could be a world leader in the jobs and technologies of the future, but only if the government supports growth There is no better place or time to start on that path than tomorrow’s Budget;. let’s hope the chancellor seizes that opportunity.

I doubt he will