George Osborne had to perform a balancing act in his speech in Manchester this morning. It had to be a message of optimism proclaiming the recovery – without complacency or boastfullness or indifference to those yet to notice the much heralded recovery in their personal finances. In the Chancellor of the Exchequer’s speech on September 9th the balance wasn’t quite there. It wasn’t that there was any gaffe. It was more that the message of optimism was not sufficiently balanced. That left just enough room for opponents to complain of triumphalism and insensitivity.

This morning the balance was there. The achievements were certainly celebrated – “Exports doubled to China…Taxpayers’ money back from the banks, not going in….1.4 million new jobs created by businesses….1,000 new jobs announced in this city today….Our plan is working. We held our nerve in the face of huge pressure. Now Britain is turning a corner.”

However he then added:

That is down to the resolve and to the sacrifice of the people of this country.

And for that support we owe the British people a huge heartfelt thank you.

Thanks to you: Britain is on the right track.

That it is crucial. It is not politicians who create wealth. All they can do is allow others to do so.

Mr Osborne was also quick to add that “many risks remain.” He stressed that “there’s no feeling at this Conference of a task completed or a victory won.” The well publicised porposale to oblige the long tern unemployed to take on work was presented in the context of recognising more needs to be done.

Next he took on the ideological argument that has returned to beinig a party political argument – between capitalism and socialism. He said of Ed Miliband:

For him the global free market equates to a race to the bottom with the gains being shared among a smaller and smaller group of people.

That is essentially the argument Karl Marx made in Das Kapital.

It is what socialists have always believed.

But the irony is this:

It is socialism that always brings it about.

And it is the historic work of this Party to put that right.

Because attempts to fix prices and confiscate wealth crush endeavour and blunt aspiration.

And the people who suffer are not the rich, but the hundreds of thousands put out of work.

The millions made poorer.

The generation whose hopes are blighted.

It is working people who always pay the price when the economy is ruined.

That is what Labour did to the workers.

And the British people are never going to let them forget it.

By contrast, I’m an optimist about the world.

I am a believer in freedom and free markets.

I see the global economy growing.

I see hundreds of millions of people in places like India and China leaving grinding poverty to join it.

That is something to celebrate.

It doesn’t have to be a threat to this country.

It is a huge opportunity.

For the first time he looked beyond reducing the budget deficit and towards reducing the National Debt:

So I can tell you today that when we’ve dealt with Labour’s deficit, we will have a surplus in good times as insurance against difficult times ahead.

Provided the recovery is sustained, our goal is to achieve that surplus in the next Parliament.

That will bear down on our debts and prepare us for the next rainy day.

The message was that the challenge was to met without tax increases of cutting capital spending.

I was pleased that Mr Osborne challenged the Lib Dems attempts to claim credit for tax cuts while dodging responsibility for the spending cuts which financed them:

We are increasing to £10,000 the amount you can earn before you pay a penny of income tax.

That is a real achievement, delivered in budget after budget by a Conservative Chancellor of the Exchequer.

The Liberal Democrats like to point out that during the election David Cameron said he’d love to increase the tax allowance, but warned it’s not easy to afford.

You know what?

He did say that.

And he was right.

The difficult thing is not increasing the tax-free allowance.

The difficult thing is paying for it.

But we’ve done it.

The result: an income tax cut for 25 million people.

Equivalent to a rise of almost 10% in the minimum wage.

Real money in peoples’ pockets.

A Conservative promise made and a Conservative promise more than delivered.

He also reminded us that the Pupil Premium was in the 2010 Conservative Manifesto.

Apart from the policy of a budget surplus the other news item was maintaining the freeze on fuel duty: “I can tell you today that provided we can find the savings to pay for it, I want to freeze fuel duty for the rest of this Parliament.” I’ve been reading Damian McBride’s memoirs and he thought the fact that “George Osborne is able to go into the 2015 election having never once increased fuel duty, and indeed having cut it by one penny”  will make for “a potent contrast with Labour’s first term in office. If you’re standing by an election billboard, watch that space.” I think Mr McBride might be on to something.

Mr Osborne concluded:

For the sun has started to rise above the hill.

And the future looks brighter than it did, just a few dark years ago.

There were some awful jokes in the speech. Why are Party Conference jokes so bad? However Mr Osborne walked the tightrope between optimism and realism with success. After the speech I am a little less worried about a voteless recovery.

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