Budget: How Office Workers Have Fared Best

Had things worked out differently, George Osborne might have been running the family business these days, selling Osborne & Little wallpaper to fit the homes of the well-to-do around the country.

Instead, he is mid-way through another renovation job, attempting to turn the UK economy from a financial crisis damage case into a world beater.

How well is he doing? By some standards, surprisingly successfully.

Before coming into office Osborne confided in friends that he was likely to become the most unpopular Chancellor in history, given the scale of austerity necessary to bring Britain back into balance.

As things stand, he is one of the most popular UK finance ministers in recent times, comfortably more trusted than Ed Balls, according to polling by IPSOS Mori.

The underlying explanation for this, however, is that the austerity doled out by the Government has been far less tough than many expected.

In 2010 the Chancellor was promising the structural budget deficit would be eliminated in this Parliament – but this year it is still getting towards 4% of GDP.

In fact, the austerity imposed in Britain since the crisis (or, to put it in economic terms, the reduction in structural borrowing) has only been the seventh harshest among major economies.

While some conclude that this is because the Chancellor has changed his plans and cut by less than expected, in fact what happened is slightly different: the economy suffered another dip in 2012, the upshot of which was to increase the scale of necessary austerity to eliminate the structural deficit.

Rather than increase the cuts, Osborne stuck with original plans, even if it meant missing his initial aspiration.

And since then, the economy really has started to recover.

UK GDP is now comfortably above its pre crisis peak, and around 8% higher than in 2010.

The unemployment rate has fallen very sharply, down from a peak around 8% to below 6%; the employment rate has equalled the highest level on record – though some quibble that this is partly down to self-employed and part-time workers.

However, this strong employment picture has not been accompanied by an improvement in living standards.

Real wages have suffered their biggest slide in many years (the biggest fall since Victorian times, by one measure).

Those earnings levels have started to improve latterly, though the median real wage (eg adjusted for inflation) is still barely higher than in 2010.

That helps explain why the feelgood factor is still nowhere to be seen – though that might change when wages increase in the coming years, as they are expected to do.

Finally, the very composition of the economy has changed.

The manufacturing, production and mining sectors are now more than 1.5 percentage points smaller, as a share of total GDP, than in 2010; the share of the government, health and financial sectors have also shrunk by 1 percentage point each.

What sectors have expanded in the meantime?

Well, although real estate and transport have grown in importance, the fastest growing of all the economic sectors has been administration and IT.

Under George Osborne, it is not those who wear hard hats who have fared best, but the office workers who rarely get an official visit from the Chancellor.