Politics

George Osborne can still see off Boris Johnson. Here's how

12 March 2016

9:00 AM

12 March 2016

9:00 AM

When George Osborne last stood up to deliver a budget, he had reached his post-election apotheosis. His economic (and political) strategy had been amply vindicated by the election result. He was, for the first time, regarded as David Cameron’s most likely successor. By the time the Chancellor sat down that status had been confirmed: his announcement of a National Living Wage had shown he was serious about the Tories’ claim to be the new workers’ party.

Yet when Osborne comes to the despatch box on Wednesday to present this year’s budget, he will do so not as the prime minister-presumptive, but rather as a Chancellor in need of a political pick-me-up.

To become the front-runner in a Tory leadership contest, even one several years away, is to put a target on your back, and Osborne has had a tough time lately. He has had to scrap the tax-credit changes he unveiled last July. This time he was keen to create a single rate of pension tax relief — which would have hurt higher-rate taxpayers. But he has been forced into ruling that out after a backbench and media backlash. One senior Conservative MP, who as recently as the start of this year was intending to back Osborne as leader, tells me that the seriousness with which this idea was considered has led to a ‘breakdown of trust between the Chancellor and the parliamentary party’.

Osborne also finds himself on the opposite side to most party activists on the great issue of our time: the EU referendum. He wants to stay while most of them want to go. In the leadership stakes, he now finds himself trailing his ‘frenemy’ Boris Johnson. Even one of the Chancellor’s ministerial allies now admits: ‘The share price has had a profit warning and ticked down a bit.’

There is, though, reason to believe that Westminster is being overly bearish about the Chancellor’s prospects. First of all, he has already killed off the proposed pension changes. This means the heat has been taken out of the issue and the Osborne Cabinet ally who claims that the row ‘will be forgotten in no time as we’re not doing it’ is almost certainly correct. Second, when it comes to the future of the Tory party, the EU referendum dwarfs everything else.

Osborne is caricatured as a Machiavelli — political and calculating. But he is taking a stance on the EU that he knows to be unpopular among those who will pick the next Tory leader. In both public and private, her is arguing for Britain’s EU membership with an intensity that goes far beyond what is required of a loyal lieutenant to the Prime Minister. One Tory who Osborne (unsuccessfully) tried to persuade to back ‘in’ says that he was struck by how much the Chancellor believed even his weakest arguments.


The conventional wisdom is that the EU referendum has reduced Osborne’s chances of becoming leader and, therefore, Prime Minister. But the referendum campaign has also served to thin out the field. Theresa May’s route to the top job could have progressed through her conference speech into a declaration for ‘out’. But the Home Secretary failed to follow the logic of her own address, which warned that it was impossible to build a cohesive society with immigration running in the hundreds of thousands a year. After she backed ‘in’, it became very hard to see how she can become leader.

Sajid Javid, the Business Secretary, is another leadership contender who flirted with Brexit. In the end he concluded that the disruptive effects of leaving the EU would be too great in the current economic climate. Javid knew that he would pay a high political price for his decision. ‘Outers’ are angry that he isn’t with them while ‘inners’, including several of his Cabinet colleagues, are mocking him for getting into such a position in the first place. He had to either confess his fairly weak preference for ‘in’ and be lampooned, or fake enthusiasm for ‘out’ as a careerist gamble. Javid declined to gamble.

Then there’s Boris. His decision to back ‘out’ has made this referendum far more competitive: Vote Leave now has the most charismatic politician in the country on its side. It has also boosted his popularity at the grassroots. The way he is putting his shoulder to the wheel has impressed even those Eurosceptic Tory MPs who were wary of his motives. But Boris’s decision to back ‘out’ has also cost him some support. ‘In terms of the longer game, he’s annoyed a whole lot of MPs who would normally be natural Boris supporters,’ says one ‘in’-voting minister. Despite this, Boris is undoubtedly now the front-runner to succeed Cameron. And that means he has a target on his back.

Boris’s decision to back ‘out’ will pay off if he has a good campaign that comes within striking distance of victory. If Brexit triumphs, Osborne’s leadership prospects will be over. But if ‘in’ wins, he will still have a chance. Those close to the Chancellor believe he can show that he respects the ‘out’ wing of the party. They hope Michael Gove (the conscience and intellectual driving force behind ‘out’) will be to the Chancellor’s leadership campaign what Osborne was to Cameron’s in 2005. Tellingly, Osborne has been far more assiduous in tending to his relationships with ‘outers’ than Cameron.

In this budget, he needs to demonstrate, definitively, that the Tories are the party of working people. This is the best antidote to the charge that he is part of every elite going. But far more needs to be done to further this agenda and follow up on the living wage.

If Cameron has his way, there won’t be a leadership contest for another three years and a lot can happen in that time. In the spring of 2013, few predicted that he would now be governing with an overall majority, that the SNP would hold nearly every seat in Scotland or that Jeremy Corbyn would be Leader of the Opposition.

It would be rash and wrong to write off Osborne’s chances of succeeding Cameron. If his side wins the referendum and the economy continues to outperform the rest of Europe he will be a contender.


 

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Show comments
  • Frank

    Utter piffle, whatever the outcome of the referendum, Cameron and Osborne are toast. Each time the issue of immigration (let alone the competence of this Government) comes up, it is another nail in their chances of survival. The latest cunning EU plan to allow all Turks visa free travel is arguably the last straw.

    • Migru Ghee

      Russians travel visa free to Turkey, Serbs travel visa free to Russia. We travel visa free to Norway.
      As a British passport holder one cannot however travel visa free to India, a former colony. Finnish people do travel to India technically visa free. So my dad says, when are the angry people (he called them mental which I will not repeat here) finally going to ask the right questions?

      • berosos_bubos

        Well 40000 came here last year. Why doesnt Cameron do something about that?

  • davidshort10

    I was hoping the article would mirror the headline, but it doesn’t, not by a long chalk.

  • Hermine Funkington-Rumpelstilz

    Never, never, never!

  • toonpaddymal

    Non-article.

  • Bardirect

    Everyone has now noticed how the second submarine Chancellor has followed closely in Gordon Brown’s footsteps and seems to share many of the personality traits which made him unsuitable for high office. The Tory party will not make the same mistake as Labour did. The next party leader is likely to be a Conservative.

    • Ian Walker

      That’s why Cameron’s trying to destroy the local assocications. The Tory party is in the control of the PPE Brigade

  • Lothlórien

    The ECB Quantitative Easing (QE) programme of creating more money in Europe has been raised to €80billion a month a higher than expected increase from the current €60bn a month. Deposit rates have dropped to -0.4 per cent from -0.3 per cent – meaning banks essentially have to pay to keep their money with the ECB.

    10 of the Europzone countries could soon resemble Greece – in an even closer EU any fool can see that it is folly to remain – plus the UK is in £1.6 trillion of debt.

    Boris has the right idea – protect the City and get out. Osborne is toast in or out.

    • Blindsideflanker

      Meanwhile Cameron was engaging in the economic arm of project fear at the Vauhall plant at Ellesmere port , telling the workers there what economic disasters would befall us if we left the EU.

      • Lothlórien

        Hopefully the good people of Ellesmere Port will not be taken in by the “smell of fear” coming from Cameron and will recognise the smell for what it really is – bullshit!

    • victor67

      That worked well in 2008

    • Alex

      Get out of the Eurozone only. Nobody has ever wanted to be in the euro. The EU is fine though.

  • jeremy Morfey

    If we follow the same pattern that the Labour Party has – smooth, well-meaning but compromised election-winner, followed by machiavellian long-term Chancellor and close political partner of the previous leader, followed by gentlemanly, but preposterous radical backbencher, then one candidate cries out to be the Conservative version of Retro Old Labour renegade Jeremy Corbyn – Jacob Rees-Mogg.

    I’d love to see a clip of these two locking horns and winding one another up in the Commons.

  • victor67

    His economics policies will fail to produce growth then he will blame external global factors and proceed to further blame and punish the poor with more austerity.

    The man is a bandit who came from a tax evading family whose inherited wealth shielded him from any kind of reality.

    • If your views were based on more than simple envy of what a persons ancestors did, you might be able to be taken a bot more seriously. As it is, all you have is that you don’t like Osborn because you think his family are undeserving. In reality, they made a business and got rich selling wallpaper. What did YOUR family ever do that made any money? What did you do that made any money? In the end, I’ll back the people with the ingenuity and drive to set something up and make it work over those who haven’t and didn’t. This is the problem with the left. They are just whiners. That’s all they have. I’m not aware of any left leaning politician who ever did anything to make money or make anything at all in fact.

      • Alex

        No they didn’t, they got rich by being handed seized lands in Northern Ireland during the Ascendancy. Are you seriously trying to paint Osborne as some kind of barrow boy whose dad made it big selling wallpaper?

        • Not at all. I don’t consider it relevant where someone else got their money from hundreds of years ago when my relatives were living in huts. It is not my business. What I am interested in is what I am going to do, and what job I and other people like Osborne can do today. You might like to consider that Osborne’s handling of the economy has been very sure footed and that our job prospects and those of our fellow countrymen is better because of that. Take a trip to Spain – nearly fifty percent youth unemployment (youth being under 25s). Try France about thirty percent unemployment. My brother lives in France and has done since the 1970s. He just had to shut down a business because the social charges were so crippling.

          If you think it is c r @ p here, think on why it is that last year, HMRC gave out over 600,000 national insurance numbers to inward migrants. They seem happy with life here. Why aren’t you?

          • Alex

            I care if they retain the privilege, as Osborne does. Cameron too is descended from monarchy and a whole line of the Royal Family’s private bankers.

            You may weigh privilege differently, but certainly cannot counter-claim that Osborne’s dad was some kind of self-made man, what planet do you people live on?

            I am unhappy because it could be so much better. Refugees and right-wingers might judge us by the standards of some of the poorest, most oppressive, war-torn countries on earth but I think we can do a bit better than that, don’t you?

            I have also lived in France, paying high employee contributions on a low salary. But the rent – and I took an expensive accommodation – was half of what it would be here and half of that again was housing benefit. And the public transport was like something out of the space age compared to the UK.

            If your brother is incapable of running a profitable business while paying social charges, as millions of Frenchmen do their whole lives, I suggest the problem lies in his lack of business acumen. He will, I guess, have to go to a country where they bend over backwards to help incompetent businesses profit off their fellow citizens.

    • Andrew Smith

      Tax avoidance is illegal and highly immoral. Tax evasion is entirely legal. There is no “moral” level of tax to be paid other than that set by the government within the rules also set out by the government. If these rules are are considered to be too lax, they should be changed and tax avoiders (i.e. every single legitimate business) will avoid less and pay more. Do you pay more tax than the government says you should?
      I’m sick and tired of lefty whingers attacking wealth creators for obeying the law.

      • victor67

        Wealthy creators?
        Ironic somewhat.

      • berosos_bubos

        He is burdening business with a mass of new regs. rather than loosening things up. Only on immigration does anarchy rule.

    • Marvin

      He is an economic dope who relies on the luck of the state of the economy, period. Like his spineless boss, he has not got a clue about how to sort out the simplest problems and everything they touch turns to sewage.

  • Yorkman99

    Isn’t our economy based solely on Osborne borrowing more and more money? Someday we will have to pay it back.

    • Alex

      We won’t as they can make more money on coupons. But if we did have to, to whom would it be? Onshore British households and financial institutions to the tune of 70%. These have an aligned interest in the continued solvency of the UK.

    • Pip

      Sometime Osbourne and Cameron will have to pay for their crimes.

      • Marvin

        NAH! These are untouchable unaccountable to no one Toffs who are looked up to by the Cretins of society.

        • Pip

          I disagree, until recently yes but the World is changing and people are waking up at an exponential rate.

          • Marvin

            BUT! what are they waking up to? The far left supporters of Corbyn, the open borders germs in Calais etc and generally the single cell lefties, because of their lack of business and politics are terrified and incapable of knowing what a deal is and how to make one, so would rather be used as a donkey for the European cart.

      • Sandra Barwick

        At least Blair knows he is disliked so much he would damage the In campaign by joining it. That must be a blow to a thin-skinned populist.

  • We can’t be seriously considering a clown like Boris as leader of the party. Who can really see him as Prime Minister and cutting anything but a hilarious bumbling figure on the world stage. Do you remember those execrable scenes of him driving about on a London Bus in China? I was mortified to be honest, about how the world would see us.

  • Pip

    Forsyth the establishment Propagandist strikes again.

  • Marvin

    If we lose the vote to leave the EU, then I think we could be stuck with the possibility of having another spineless idiot as PM. We will forever be enslaved to the fools and idiots in Europe and this moron will preside over a basket case Islamic Britain.

    • Sandra Barwick

      If the vote is Remain then I think a high number of Conservative voters from the last election will move to vote ukip at the next – (Unless there is an Out figure leading the Tories) – I don’t think the Tories will get a majority.
      If the vote is Out then the Tory vote could stay solid. Don’t know whether George realises this – don’t suppose he gets to talk to anyone who disagrees with him.

      • Marvin

        You make a great point Sandra, if we lose then we could end up with a bumbling buffoon who did not know the tube fare between two zones, or another Tory Toff who has learnt very little from the highest education system on the planet. BUT, then as you mention (excuse my I have a dream cliché) maybe, just maybe some of the despondent Tory back benchers would defect to UKIP with the intention of turning it into a strong and credible future government. Some dreams come true.

        • Sandra Barwick

          Events may alter small c conservatives thinking, but I think if the vote is remain there will be a strong desire to punish the present government. George must be thinking that it will all go away and there will be an acceptance of a remain vote. No.
          Undoubtedly there will be further Islamic State atrocities in Europe, and with each one, and with each Euro crisis, Anti EU voices will be summoned to comment on the media. The debate is making the Leave position ‘respectable’ in a way it has never been before. As the USE disintegration internally becomes clearer there will be a party in the Commons which will have as its main focus leaving Europe. I don’t know whether that will be Ukip or the Cons or some blend, it doesn’t matter.
          By then of course the Commons will be even more of a “window dressing” partial pretence of democracy than it is already.

      • Brian Jones

        There seems to be some misconception that because Corbyn and co are frightened to come off the fence and state what they have been saying for years, that we should leave so say they support remain, that all the people who voted labour at the last election will vote to stay and I think that it’s a completely wrong idea.

        • Sandra Barwick

          I agree. On this issue voters will make up their own minds, not follow party leaders.

  • watzat

    If I might have the temerity to reverse one of Tony Benn’s favourite mantras: the next Prime Minister will be as much if not more a question of personalities as policies. It was evident from the way Osborne bested the, by comparison lumbering if not tottering, Ed Balls in the Commons that he lacked absolutely nothing in planning, adroitness, opportunism and calculated disingenuousness – indeed it was a masterclass and marked Osborne out for a bright future. However the future is not about trouncing the opposition but selling unreconcilable things – austerity, an improving economy, a reduced deficit and public willing to accept that their pain is also their gain. Does Osborne have the winning charm to do this? Or will the public take against a sanctimonious Flashman putting the case that roasting is character forming?

  • berosos_bubos

    Osborne has not carried out any of the reforms the country desperately needs. A successful leader has to be much braver. Mass immigration will punch a huge hole in his deficit reduction plans. Interest rates need to go up to puncture the bubble in lending even as median incomes stagnate otherwise it will be more pain later. Only through reform can the country prosper during economic turbulance.

  • disqus_v6CG8Uy6bA

    Osborne is a very calculating politician in the mold of Gordon Brown. To me his policies are no different than those of Gordon Brown as chancellor. All he has done is complicate the tax system while raising effective tax rates on everyone. I don’t see how Tory MPs can back him.

  • Torybushhug

    A man too weak to be able to bring about a trade deal with the EU is too weak to be PM. He argues Brexit is a leap into the dark, new trade deals too difficult to assemble.

  • William Matthews

    I paid the £25 to join the conservative party, just so given the opportunity I could vote against the slick and slimy, disingenuous sounding, Notting Hill clique loving, Cameron as leader of the party. Tragically for me, Osborne makes Cameron look preferential.

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