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By Paul Goodman

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Following the banking scandal, Fred Goodwin has been deprived of a knighthood…

When the Libor scandal broke last Thursday week, three consequences were clear immediately.  First, that Bank of England officials and former Labour Ministers may have been involved.  Second, that whether the latter were or not, some were at the centre of the bigger drama of which Libor is only a part – namely, the morality play of how regulatory failure helped to drive banking and economic failure.  And, third, that there will be more scandal to come: since Barclays weren't the only bank involved in Libor, for example, this drama will run and run.

So since it will run and run – and have an effect on how people vote – a question follows.  Who will get the blame?  Who will be the Bob Diamonds and Fred Goodwins of the political world?  Who should be deprived of office, as Mr Goodwin was deprived of his knighthood?  It isn't evident what the answer will be, but it is clear what it should be.  Labour should get the blame, because they were responsible for the regulatory failure in question.  And Gordon Brown and Ed Balls are the Diamonds and Goodwins of Westminster, because they were responsible for it.

…So will Ed Ball, as he deserves, be deprived of office?…

Mr Balls should thus be deprived of office.  And by a happy coincidence, he is seeking it, not as any old member of Ed Miliband's team but – for heaven's sake – as his Shadow Chancellor, no less.  Mr Miliband is seriously proposing that the man at Mr Brown's right hand, as he steered the economy on to the rocks, should be given charge of it all over again.  George Osborne, the man responsible for trying to rescue it, cannot reasonably be criticised for pointing out that putting Mr Balls back at the helm is not a very good idea.

He could legitimately be censured if his attempts to do so were unsuccessful.  So let's review the events of this week.  The Chancellor aimed, first, to bring about a Parliamentary inquiry into banking rather than a judicial one and, second, to ensure that Mr Balls will take his place in the dock when it proceeds.  Mr Osborne succeeded in his first objective: Messrs Miliband and Balls began by blustering and ended by backing down, knowing full well that voters would have been baffled by the party of Labour refusing to co-operate with an inquiry into a problem of capitalism.

…George Osborne is working to ensure that he will be…

Andrew Tyrie is a spiky, independent-minded man, and not a patsy for anyone, including the Chancellor.  But Mr Osborne will surely achieve his second aim, too, since it is inconceivable that the inquiry will not want to ask why Mr Balls helped to replace a regulatory framework that worked with one that did not – particularly since he was warned at the time, by Howard (now Lord) Flight and others, that would be the case.  So the Chancellor will almost certainly achieve his second aim, too.  This being so, one has to ask: what is all the fuss about?

For fuss there is, and from the blue corner, too.  The complaints about Mr Osborne's conduct this week are various.  Some say that he was wrong to give a Spectator interview from which Labour claim he later had to back off.  Others, that his proposed inquiry rode roughshod over the Treasury Select Committee.  Others still that the Chancellor is becoming obsessed with his opposite number.  The Guardian's political report and Charles Moore's Telegraph column this morning give vivid and different senses of these criticisms.

…And though he may not be perfect Tory strategist…

There are good responses to these Tory MPs and commentators on particular points.  The Treasury Select Committee, for all its merits, simply isn't senior enough to handle a top-rank banking inquiry, and Mr Tyrie eventually went along with the Chancellor's plan.  And Mr Osborne's Spectator interview is neither here nor there.  Most voters will form a broad impression of Mr Balls, based on a heap of half-grasped TV clips, newspaper headlines, and uneasy memories.  Very few (sadly) read the Spectator.  And even fewer of them will remember what the row was all about.

But though parts of this critique are wrong, the whole somehow adds up to more than the sum of the parts.  Mr Moore, the Greatest Living Englishman, puts his finger on the main point, though he is naturally polite to express it bluntly – namely, that the Chancellor should be hunkering down with his Red Books trying to boost growth, given the perilous state of the economy, rather than playing childish games in the Commons.  In short, the critique runs, he is a student politician doing a grown-up's job, for which CCHQ is a more suitable venue than the Treasury.

…The frightening truth is…

The Greatest Living Englishman is never entirely wrong.  Perhaps an imaginary Chancellor Hague or future Chancellor Hammond would have done or will add to the good things Mr Osborne has done – (the squeeze on departmental spending, the corporation tax cuts, the reduction in the top rate that some who have since criticised it originally called for) and not the bad things (such as the chaotic budgets retreats over fuel duty, and VAT on pasties, caravans, church buildings and charitable donations).  But the Chancellor is in place, and David Cameron is not going to move him.

Why? Because the Cameron-Osborne partnership is based on keeping the demons of rivalry locked in a box.  To move Mr Osborne would be to open it up, loosening those demons, and transforming Cameron-Osborne overnight into Blair-Brown.  This doesn't mean that the status quo should be allowed to endure.  The party needs a single, strong, strategic Chairman to allow the Chancellor more time at his desk: Tim Montgomerie has suggested Michael Gove.  But for better or worse, Mr Osborne is a political animal, and will always behave like one.

…There just aren't any others at the top of Tory party…

And contrary to rumour, he is not always an unsuccessful one, either.  As I point out above, his dual aim this week in response to the Libor scandal has essentially been realised.  His proposed stamp duty and inheritance tax cuts helped to frighten Gordon Brown off the 2007 which the latter might have won, leaving him free to inflict Mr Balls on the country as Chancellor.  He didn't win Mr Cameron's ear, and make the last manifesto a retail offer of Conservative policies to voters.  Nor did he have real control over Steve Hilton's "Hello Clouds, Hello Sky" campaign.

I am not claiming that Mr Osborne is a perfect strategist, or even a top-notch one.  But his flaws only point to a frightening truth: there simply aren't any others at the top of the Conservative Party.  Labour is packed with politicians who do little else than seek to frame the Tories as untrustworthy: Tom Watson, Chris Bryant, Lord Prescott (still campaigning from beyond the grave): Mr Balls himself.  The trade union production line rolls them out on a conveyor belt.  Where are their Tory equivalents?  Where are the blue attack dogs?

Mr Balls advised Mr Brown on banking, higher borrowing, higher taxes.  He is trying to escape this record.  Mr Osborne is trying to chain him to it.  And since no-one else can be bothered to do so, isn't backing the Chancellor the right course to take?

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