A bad week for chancellor Osborne

George Osborne

When the Conservatives won the General Election back in May, I predicted that the most likely successor to David Cameron was George Osborne. The Chancellor had masterminded the Tory campaign, won the argument on the economy, and come up with the big idea that is the Northern Powerhouse.

The Labour Party’s decision to the elect Jeremy Corbyn as its new leader then meant that Osborne could look forward to a good run in the top job, as the official opposition seems determined to become a protest group, rather than a credible alternative government, for the foreseeable future.

However, I also warned that as the Conservatives settled into majority government, with the prospect of a decade in office, they faced the danger of becoming careless, complacent and, a charge already often levelled against a number of ministers, arrogant.

Little did I anticipate that this would happen so quickly though; and I would never have imagined the normally sure footed Chancellor as being the first major culprit.

His unexpected announcement of the introduction of a living wage in his first budget statement back in May did have the intended consequence of wrong footing the Labour Party. But the unintended consequence was to totally alienate SME’s who are already facing the challenge of paying for auto enrolment in two years’ time.

Nonetheless, not least through his efforts on the devolution agenda, Osborne appeared to be back on track by the time of his Tory Party conference speech in Manchester last month, following which he was installed as the firm favourite by the bookies to be the next man who would be presented with the keys to number ten.

But, as Harold Wilson famously said, “a week is a long time in politics.”

And the past seven days have been an unmitigated, and wholly unnecessary disaster, for George.

By digging his heels in over a measly £4 billion saving with his plans to reform the tax credits regime, the MP for Tatton not only brought the inevitable avalanche of criticism from the left, but had to sit through excellently presented arguments against his plans from a number of his Tory colleagues, including his nemesis Boris Johnson.

Hitting hard working, low paid families, does not appear to fit in with the Prime Ministers mantra of ‘the workers party’ and so it should have come as little surprise to the government that criticism would be fierce.

What the Chancellor failed to anticipate was the killing of his tax credits plan by the Lords. Emboldened by increasing Tory backbench unrest, public sympathy for tax credits claimants and, crucially, a lack of mention of this unkindest of cut in the Conservative manifesto, the unelected chamber were happy to give ‘the other place’ a bloody nose.

This embarrassing defeat does not mean the Tories will lose the next election. A failure to deliver the planned £4 billion saving does not throw the governments financial objectives off course.

No, what this defeat means is that Osborne goes from looking like a shoo- in for the top job to a man who might yet be beaten.

In polls last week Cameron and Johnson scored healthy leads over Jeremy Corbyn in terms of who people thought would make the best Prime Minister. Interestingly the Chancellor is neck and neck with the leader of the opposition.

This is not where George wanted to be at this early stage of a new parliament. Falling out with the Lords is a bit of a nuisance, but hardly fatal. Disagreeing with a dozen or so of your own backbenchers can be dressed up as you being able to front people up and make tough choices. Losing popularity among the electorate and being seen as level pegging with the most unpopular Labour leader in modern history – now that is a problem, and one Osborne must fix quickly if he is to realise his ambition of becoming PM.

Is the Chancellor Manchester’s not so secret weapon?


Sir Richard Leese and Sir Howard Bernstein are, quite rightly, given a significant amount of the credit for their city’s 25 year run of growth and success that has culminated in the much publicised ‘Devo Manc’ deal that has been progressed over the past eighteen months or so.

However, news this week of disquiet in Birmingham, and a bit of an internal rift within the higher echelons of the government, would seem to confirm that Manchester has another talented and influential politician driving forward their cause in the name of Chancellor George Osborne.

His latest intervention on behalf of the city that has inevitably emerged as the capital of Osborne’s Northern Powerhouse initiative has reportedly put the nose of his business minister Sajid Javid out of joint, along with the leading movers and shakers of the ‘West Midlands engine’.

The Chinese are in the UK this week and Birmingham’s leaders, headed by Javid alongside senior councillors and officials and the chair of the Greater Birmingham Local Enterprise Partnership and John Lewis boss Andy Street, had been confident that their lobbying had secured a visit from the Chinese President today.

However, the Chancellor is said to have intervened, and instead the Chinese entourage will rock up in Manchester today, visiting Manchester Town Hall and the University, before heading off to the Etihad Stadium. Both Osborne and the Prime Minister will be in attendance.

Given that Birmingham has secured investment that will see Chinese manufacturer Changan Automobile create hundreds of jobs in the region by relocating its UK operations to Birmingham Business Park; and the fact that China will build the HS2 high speed rail line, which will initially run between London and Birmingham, it is easy to see while West Midlands leaders feel aggrieved.

However, this latest episode is a further demonstration that the Northern Powerhouse agenda means more than devolution and rebalancing the UK economy to George. It’s about helping him in his ambition to be the next resident in Number ten Downing Street. And that’s good news for Manchester!

And they’re off….Tory leadership contest starts Monday

tory party

The party conference season comes to an end next week as the Tories visit Manchester, and they will be struggling to contain their joy following the gathering of a much depleted Liberal Democrat event; and a Labour conference that looked as if the party had somehow been transported back to the 1970s, not only in terms of what was being said, but also in how it looked.

Given that the Tories will now have to implode in spectacular fashion if they are to lose the next election, which is five years away, then they can get on with their own agenda in a relatively carefree fashion in the safe knowledge that Tim and Jerry (Farron and Corbyn) may be able to huff and puff – but they will fall a long way short of blowing the Conservative house down.

With this in mind, next week should see the phony war for the Conservative leadership begin in earnest, and the contenders will be looking to strike a smart balance between speaking to the country they govern, and to the party they want to lead.

For the chancellor, this will mean a further advancement of his devolution plans, described by Oldham council leader Jim McMahon at Labour’s bash this week as ‘a devolution of cuts’ – but still seen by most in local government as the best chance they have of maintaining at least some relevance in the twenty first century.

It remains to be seen if George, the favourite to succeed the alleged pig admirer David Cameron, will make firm announcements on the further city region deals that he will be supporting. More likely he will wait for his November budget to do that. However, it is no coincidence that the abandoned electrification of the Transpennine railway line has been reinstated before his party has landed in the heart of his much trumpeted ‘Northern Powerhouse.’

Expect to hear that phrase, and indeed the ‘West Midlands engine’ peppered throughout the Osborne speech. Cynicism from Labour leaders like McMahon aside, the chancellor has a genuine appetite to re-balance the UK economy; devolution is just one part of his strategy.

Of course, George being George, there is a political aspect to all of this Devo stuff too. He has long recognised the futility of the Conservatives, particularly when they control the levers of power on Westminster, attempting to win back control of Town Halls in our big northern cities and many other provincial cities this side of the Watford gap.

He hopes that the introduction of big powerful ‘metro mayors’ will see strong independents emerge as contenders in these Labour strongholds and eventually lead the electorate to conclude that councillors are a thing of the past.

Managing and re-balancing the economy is his day job, the bread and butter of our chancellor’s role. Shrinking the state, now that is his passion, and what gets him out of bed in the morning.

Osborne prepares to kill Labour – and become PM


It is a long time since a northern constituency could boast a Prime Minister. The late Harold Wilson, who represented the Merseyside constituency of Huyton, was the last northerner to hold the highest office, and he vacated number 10 back in 1976.

However, the regions wait for another PM is coming to an end, certainly if chancellor George Osborne MP for Tatton, Cheshire, has anything to do with it.

His Northern Powerhouse agenda has dominated the debate and discussion of local government and many in the media for over a year now. The powers he has ceded to Manchester, and is prepared to offer other local authorities who are able to provide proof positive that they can deliver – with a metro mayor – has won him the reputation as an innovator who wants to genuinely try new things to re-balance the UK economy.

That he has done this in partnership with (mostly) Labour council leaders is testament to his impressive negotiation skills, matched only by his ability to spin.

A whole list of announcements on spending in the north, most particularly on infrastructure projects, looks like ‘new’ money. Often it is cash that local councils’ themselves have had to find from ‘efficiencies’.

His incredible persuasiveness in convincing his former treasury colleague and coalition mate, Lib Dem Daniel Alexander, to do the tour of television and radio studios every time there was bad news to sell, whilst Osborne himself saved his brief appearances for the ‘feel good’ pronouncements should be noted too. I’m sure it is something the now former MP Alexander has reflected upon since being permitted by his constituents to spend more time with his family.

But, it is the chancellor’s activity since the election that is most impressive. Surprised though he and his next door neighbour Dave were in securing a victory, he has had the air of a man who has hit the ground running, and has a plan to get on and deliver.

His spring budget included a host of policies that will see a greater acceleration of the shrinking of the state and public sector services. He has cut taxes, and will continue to do so during the lifetime of this parliament. And he unashamedly stole Labour’s ‘Living Wage’ policy whilst he was at it.

Now he is preparing a blitzkrieg on the official opposition’s next leader. If, as is predicted, it is Jeremy Corbyn, he knows that his only problem will be weighing the votes that his party will get in the marginal constituencies across the country.

However, he is not one for complacency, George. So expect legislation around Trades Union laws; immigration; the economy and welfare throughout an autumn that will be set full of Westminster traps for the Parliamentary Labour Party.

Osborne wants to cement in voters’ minds the notion that Labour has turned into a ‘loony left’ protest group that is as out of touch with reality as Lord Sutches old ‘Raving Loony’ party.

Once this mission is accomplished, he will be quickly on to his next project. Succeeding Dave in an orderly manner and, in the nicest possible way, ‘doing in’ his closest rivals for the number one job, Teresa May and Boris.

Prime Minister Osborne? At this stage, you wouldn’t bet against him.

Lessons from across the pond

Across the Pond

The rise in unemployment for two consecutive months and the Bank of England announcement that interest rates will be increasing sooner rather than later are a couple of bits of headline news that would suggest that George Osborne’s ‘austerity drive’ may not be securing the economic miracle that the chancellor and some of his supporters claim.

Indeed, the notion that the only way out of recession was George’s way is not all together true.

Critics of the alternative economic plan, which is to spend more on public services, infrastructure and subsidised job creation, will point to some of the less impressive performances of EU nations such as France to prove their point.

They do, however, ignore the impressive economic results and growth that has been delivered with a far more expansive spending programme by the fastest growing G8 economy, the USA.

President Obama has never bought into the austerity obsession that has been the rallying call of Angela Merkel, George Osborne and Europe’s mainstream centre right.

Last year was the strongest year for jobs growth in the US since the 1990s. Businesses have created over 11 million jobs in the last five years. Since 2010 the States has put more people back to work than Europe, Japan and every other advanced economy combined. These jobs are not all in the service sector either. Indeed, manufacturing is the fastest growing sector in modern day America.

The advantage Democrats have in the USA over opponents of austerity in the UK is that firstly Labour were in charge of the national administration when the ‘crash’ hit the economy back in 2007; secondly, Labour failed to articulate a coherent or consistent argument as to why it wasn’t to blame for that crash; and third, perhaps most importantly, the centre left in the UK has never had a charismatic leadership figure to present an alternative view anyway.

As Labour prepares to elect Jeremy Corbyn as its next leader, George Osborne can sleep very comfortably at night, secure in the knowledge that he will continue to have no serious political opposition for the foreseeable future. The economy may hit a few bumps in the road, and austerity will take many more victims before his plan is done. But, politically, there is nobody the chancellor or the government need to worry about in terms of calling them on it.

Meanwhile, across the pond, centre left politics look set to continue to dominate as the Democrats, advocating the New Democrat philosophy that was first adopted by Bill Clinton in the early 1990s, are on course to take the White House once again.