21/03/2016 08:05 GMT | Updated 19/03/2017 05:12 GMT

Budget Gloss Still Means Pain Ahead

Ignore the rhetoric and just look at the facts: The UK economy is slowing down, however much glossy paint Chancellor George Osborne covered it in with his Budget.

The reason might be just unease around our position within the EU ahead of the referendum on continued membership, a sentiment that could pass, or it might get much worse as the global economic outlook worsens.

There is certainly no doubting the drag 'Brexit' is having on business. We have yet to see a compelling economic argument for leaving the EU, but firms are voting with their wallets by not opening them more than they need.

Uncertainty is always bad news for economies. Hopes and expectations of unilateral treaties and some special status are not cutting it commercially, at least for most enterprises.

In the meantime, the hard reality is that productivity remains stubbornly low and the Chancellor has missed his debt targets.

He talked about a Budget for the next generation, but he needs to worry more about this one because we may be teetering on the edge of a recession, all with a ballooning deficit.

There was no sense of that from his upbeat language and focus on giving welcome benefits to small businesses, largely at the expense of bigger ones.

The reduction in Corporation Tax from 20 per cent to 17 per cent by 2020 will be a big boost, as will reductions to Business Rates and zero Commercial Stamp Duty on purchases of up to £150,000.

But all of this will only go so far if we are entering another punishing slowdown in the global economy, which seems horribly possible.

Mr Osborne is only partially master of all our destinies, and a political desire to have your cake and eat it must be tempting, especially to a Chancellor reportedly ambitious to be Prime Minister.

But the hard truths are not being confronted, no matter how much tax raising is deferred, no matter how great the giveaways in terms of personal allowance increases and fuel duty freezes.

When the head of the independent and respected Institute for Fiscal Studies comes out publicly wondering how the Chancellor sleeps at night, we know there's a problem.

George Osborne is not going to be able to duck further spending cuts or tax rises for much longer, we have been told by economists. The fact that he did so with his eighth Budget reflected the reality that his plans 'for the next generation' are really for the next three months, just enough to see him past the June referendum.

But let us take him at his word, at least in part, regarding the next generation. He has undoubtedly ushered in radical changes to state schools, with all of them due to be freed from local authority control. A cynic might wonder, as schools struggle with rising wage and pension bills, whether this might be a way to outsource political responsibilities.

But this was still a significant reform. The arrival of a 'fat tax' sugar levy on soft drinks was another one and sent an important signal. Unfortunately, obesity is rather more complex than reducing the extraordinary amounts of sugar added to soft drinks.

If he is serious there will be changes to eating habits in the home and much more emphasis on exercise. Why stop at sugary drinks? But perhaps he won't.

The unfortunate truth about the Budget is that it was a bit like a sugary drink: fizzy and largely sweet. But it will not be the last word on how well we do this year; and the omens are not looking good for Budget 2017.