A Budget for tomorrow rather than today The chancellor appears to treat his responsibility for short-term growth with nonchalance George Osborne's Budget offered little - too little - to boost growth now. The chancellor's counter to his supporters" worsening pain was to promise that, in a few years" time, they will be rewarded. This was a political Budget that left the economic heavy lifting to others - and to the future. It is not news that the British economy is languishing. But the disappointments keep coming. The Office for Budget Responsibility now forecasts 0.6 per cent growth in 2013, just half what it did a few months ago. The stagnation means deficit reduction is temporarily stalled, and the level of borrowing will be higher in every year than the OBR had expected at the outset. To his critics, this is evidence that Mr Osborne's plan is failing on its own terms. That is facile. While the chancellor is going to miss his self-imposed targets - structural balance will be achieved in four years" time but public debt as a share of gross domestic product will keep rising till 2017-18 - he has successfully stuck to policy actions he had promised. Public spending has been reined in and is headed for a sustainable low-40s per cent of GDP. Corporate taxes and personal allowances have been loosened despite some of the worst public finances in generations. The chancellor's gamble had been that other sources of growth could fill the gap left by curtailed public spending. This has worked in labour markets: the private sector has more than compensated for public sector job losses. But growth in output and incomes has not come back. The disappointment is due not to fiscal consolidation, which was predicted, but to price increases eroding household spending power and to the eurozone crisis, both of which turned out worse than expected. Although deficit reduction was not the culprit, the need for Mr Osborne to use the Budget to address the fall-off in demand was imperative. Many want Mr Osborne to throw his fiscal credibility to the winds and borrow heavily to pump-prime the economy. This newspaper disagrees: unless a steep economic contraction leaves no other choice, the spectacle of a government abandoning its declared raison d"être risks chilling both financial investors and bricks-and-mortar businesses. But this was all the more reason for Mr Osborne to use the demand-boosting tools available inside the Budget envelope. Instead he outsourced the job to the Bank of England. A more aggressive monetary policy is certainly needed. Mr Osborne has opened the door to further action by tweaking the BoE's remit. The question is how the incoming governor Mark Carney will exploit a new mandate. One worry is that reaffirming the "primacy" of the 2 per cent inflation target "at all times" leaves little scope for more powerful monetary action - even with Federal Reserve-style "guidance" that rates will stay low until specified jobs or growth triggers are hit. Mr Osborne is in a hole. The poaching of Mr Carney from Canada cannot be used as an excuse for inaction on the fiscal side. The chancellor appears to treat his own responsibility for short-term growth with nonchalance. The Budget contains many tax tweaks and supply-side measures that in isolation are good ideas. But they are too small - and many take too long to come into effect - to make a difference to demand now. Shifting more funds from current spending - through additional public sector pay restraint and undefined non-departmental savings - towards investment and business-friendly tax cuts was the right direction to go. But Mr Osborne was too timid. If he were serious about growth now, he would have added more to capital spending immediately, not from 2015-16. He would have targeted the national insurance cut towards new hires, and made it more generous. He would have focused his new mortgage guarantee on new builds - as is the case for the shared-equity New Buy scheme. That would stimulate construction, not just drive house prices up. Most importantly, he would have funnelled much more money towards capital and tax cuts with a large demand effect. The ring-fence of health, school and aid spending no longer makes sense. With policies designed to give little short-term pay-off, the chancellor will hope to be judged on the long-term effects. For the economy as a whole, these are at best mixed. National insurance cuts, capital spending and childcare vouchers to help mothers remain in work may well strengthen growth in future. So may supply-side measures in train such as planning reform and implementing the Heseltine review. But those who dreamt up a state guarantee for mortgages that will be unaffordable at normal interest rates had better consider what this policy has led to elsewhere. That leaves the political calculus captured by the cringe-inducing label "aspiration nation." Mr Osborne is right to appeal to the self-made man and woman who would like to own a house and run a small business. He is also right to press for measures such as the drop in corporation tax that should help to make the UK attractive to foreign capital. But without a recovery, Thatcherite spirits will continue to flag. The British economy is still on its knees after the global financial crisis. This was not a Budget to bring recovery forward, but one for after the recovery has arrived. Mr Osborne - and everybody else - had better hope it will arrive at all. The alternative is a lost decade, with declining living standards and a diminishing place in the world.