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Conjuring some hope
10:08am Wednesday 20th March 2013 in Comment
BUDGET day coincides with our grim front page news that hundreds of jobs are at risk due to the planned closure of a high-profile factory in County Durham.
The decision to shut down the the RF Micro Devices (RFMD) plant at Newton Aycliffe and move production to the US is another reminder of the urgent need to stimulate growth and create jobs.
RFMD has announced that it is actively seeking a buyer for the County Durham site – formerly the Fujitsu microchip factory – but the fragility of the economy suggests it will be no easy task.
Chancellor George Osborne is today expected to attempt to kick-start the flat-lining economy by investing £2.5bn of further public sector cuts in infrastructure projects.
Most Government departments, with the notable exceptions of the ring-fenced health, schools, and overseas aid, will have to find a further two per cent in cuts.
We have been crying out for investment in infrastructure projects to stimulate growth for the past three years so today’s announcement is a case of better late than never.
But there is a price to pay in yet another round of austerity to bridge the deficit, and that is sure to add to pressure on David Cameron to abandon his pledge to protect overseas aid at the next election.
There is little room for manoeuvre for George Osborne so this Budget is about politics and perception as much as it is about economics.
We hope he somehow finds a way to conjure up some optimism – unlike last year when his Budget was most memorable for the ill-fated “pasty tax” and an income tax cut for the highest earners.