THE question of whether George Osborne could have done more to stimulate the economy framed a lively debate at the Herald/Sunday Herald post-Budget briefing in Glasgow last week.
Jeremy Peat, a director of the David Hume Institute think tank, said there was a "trap that the Chancellor is utterly and totally caught in", where slow growth is making the public finances worse with each quarter.
Just three months after its last forecast, the Government's Office for Budget Responsibility halved its outlook for GDP growth in 2013 to 0.6%, citing weak consumption, business investment and trade.
"I find it depressing," said Peat. "I don't think the Budget will do any real harm this year - but I don't think it will have any potential significant impact on growth of consumption or growth of business investment."
Fraser Campbell, a partner at accountancy firm Campbell Dallas, thought the Budget had been relatively pro-business, with measures that included a £2000 cut to employers' National Insurance contributions and a pledge to get corporation tax to 20% by 2015.
However, he called for tax measures to improve the stimulus, including research and development tax credits, increased capital investment allowances and cancelling tax on reinvesting profits.
Of the latter, he said: "Particularly for businesses that are growing, it would give them a boost in that growth phase to be able to reinvest all of their profits. You could also turn it on its head and give a tax credit for effectively balance sheet strength and encourage that retention of value."
Of the new loans and guarantees for homebuyers, Robin Shannan, executive chairman of McClure Naismith, said: "They are not even going to get it done in time for the election, so I'm not even sure it's good politics."
He also agreed with concerns raised by Professor Colin Mason, of Glasgow University, that the plans to broaden the Bank of England's remit to focus on growth and employment targets, and to experiment with more "unconventional" ways of stimulating the economy, could have adverse consequences.
Mason said: "I am worried about inflation. That's a real problem that we are potentially stacking up."
Peat concluded: "The only way to have a short-term impact is to cut taxes facing consumers to stimulate demand, which may encourage investment.
"But to do that at a time when public sector debt is to peak at 85.6% and the deficit is way above acceptable levels... without some compensating measures either in increasing tax or cutting public expenditure quite savagely, that to me would mean our Triple A rating was certainly a distant memory.
"We would be damaging our structural position."
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