Home truths for Chancellor

Now the bad news. It will take even longer than envisaged for the country to recover from the longest slump in history. Growth forecasts have been halved for the coming year and borrowing will be higher than expected. With the UK at least set to avoid the humiliation of a triple-dip recession, it is a time to be grateful for small mercies.

These are the central conclusions from a financial statement that exposed the Chancellor’s limited room for manoeuvre as he desperately sought to regain the political and economic initiative following his disastrous “omnishambles” Budget of 12 months ago.

In this respect he outmanoeuvred Ed Miliband, the Labour leader, who could not even bring himself to praise measures to boost the construction sector and raise the tax allowance of individuals to £10,000. It was notable that his House of Commons response was underpinned by snide personal attacks rather than a coherent and costed alternative.

Yet the test of this Budget is not Mr Osborne’s more confident performance during raucous Commons exchanges in which he sought to explain the scale of the economic crisis in terms that floating voters can grasp ahead of the next election. Instead it comes down to whether it actually delivers – in the coming weeks, months and years – the policies that the Chancellor’s critics derided as “too little and too late”.

There are no guarantees. The public’s patience with Mr Osborne is now wearing extremely thin, in spite of his latest measures to help lift living standards such as the freeze on fuel duty, and the reminder in the form of the financial meltdown in Cyprus that Britain’s future fortunes are still intrinsically linked to those of the Eurozone.

While the Cyprus crisis may vindicate the Treasury’s decision not to increase borrowing but instead challenge Whitehall to deliver another round of efficiency savings, Mr Osborne needs to prove that his measures amount to far more than token gestures at a time when unemployment has nudged up again, despite 1.25m private sector jobs being created under this Government.

Take the announcement that Drax power station is one of just two sites left in the running to pioneer Britain’s carbon capture revolution. It is vital to industry’s future prospects in Yorkshire that this region does not miss out to a Scottish-led bid.

Likewise the dramatic expansion of the “right to buy” revolution that transformed Margaret Thatcher’s fortunes in the early 1980s. This is the building block of the aspirational agenda set out by the coalition to contrast with Mr Miliband’s “one nation” vision, but countless previous schemes – whether it be measures to boost construction or accelerate bank lending – have failed to deliver the intended benefits. The challenge now is ensuring that the Government’s imaginative equity loan scheme succeeds in reaching out to those young families who can afford to honour the repayments.

And while Mr Osborne’s plan to cut beer duty by a penny was greeted by three cheers from backbenchers who have been busy campaigning against pub closures, it is not going to make a signficant difference to the coalition’s reputation for competence.

For, while the Government is right to champion aspiration, a notion that was neglected for too long, the simple fact remains that George Osborne is drinking in the last chance saloon. This was his fourth Budget and his task has been made even more difficult, and painful, by the failure of previous speeches to lift Britain’s flagging fortunes. If this latest attempt falls just as flat then the consequences for the country, never mind the Chancellor, do not even bear contemplating.