George Osborne is David Cameron’s most important colleague: William Hague may deputise at PMQs but the Shadow Chancellor is second only to David Cameron as the most important figure in the Conservative Party. And It’s not just because the Treasury portfolio is the most important of the three major offices in any leader’s gift. George Osborne was made General Election coordinator in last year’s reshuffle. He took the lead in handling the Tory response to ‘Bottler Saturday’. He has forced the gearing up of the Boris campaign. With offices next door to the leader’s, he is David Cameron’s closest adviser on strategy and famously, with Andy Coulson (the communications supremo he recruited), led the charge against über-modernisation. Before Christmas in their notable joint interview, in China, David Cameron made it clear that George Osborne will remain as Shadow Chancellor. Already there is premature talk of George Osborne being Mr Cameron’s natural successor.
2007 ended very well for George Osborne: Steve Richards of The Independent, not just one of the best reads in ‘Fleet Street’ but also one of the commentariat’s nicest people, decided that Osborne was his Politician of the Year. At the other end of the political spectrum he won the same accolade from The Spectator. The Spectator’s Fraser Nelson (now a father – Congratulations Fraser) judged that his inheritance tax announcement was "the single most effective policy ever announced by the Conservatives in Opposition"! The Tory grassroots, who had become increasingly sceptical of George Osborne’s qualities, decided he was as effective as the other top members of the shadow cabinet, David Davis and William Hague.
The Conservatives lead on the economy again: If ‘it’s still the economy, stupid’ the Conservatives can take enormous heart from the finding that voters now trust the Tories most again when it comes to economic matters. A 22% deficit at the last election has, according to YouGov for The Telegraph, become a slender 3% advantage for the Conservatives. This, however, owes more to declining confidence in Labour’s abilities than a transformation in belief in the Tories. There has been a larger increase in the number of people who are unable to choose between the two main parties as to who is most likely to run the economy well. Those people are George Osborne’s opportunity and challenge in the next twelve months.
So, what are the big decisions awaiting George Osborne?
Will the commitment to match Labour’s massive spending be rolled over? If the inheritance tax announcement was George Osborne’s best announcement of 2007 most Tory members think that his September decision to match Labour’s spending for the period up until 2010/11 was his worst. With mounting evidence that Labour is spending very wastefully, and concerns growing at the socialisation of large parts of Britain, there must be room for more modest growth in public spending. When George Osborne comes to review his spending decisions it must be hoped that if he chooses to match Labour’s spending again that it will be for a much shorter period. The danger is that the commitment to 2010/11 will become 2011/12 and then 2012/13.
Will George Osborne be able to deliver tax cuts? Lower taxation became fashionable again in 2007 but George Osborne hasn’t given himself much scope to respond to the mood that the TaxPayers’ Alliance is championing so successfully. He has largely rejected supply-side arguments for lower taxation, saying that all tax cuts must be fully funded. His plans to fund lower family taxation through higher green taxation may, The Independent has predicted, be undermined by Alistair Darling’s plans to raise green taxes in his 2008 Budget. If the economy slows there will be little room for tax cuts from those famous proceeds of growth if the Tories continue to match Labour’s spending splurge. George Osborne got away with his dubious plan to fund the IHT cut with a raid on non-doms – largely because most economists see a £1bn or £2bn tax cut as a rounding error – but other similar devices must be more able to withstand scrutiny.
Will George Osborne remain so political? If there is a big political story in the news then George Osborne is at least as likely to appear on our television screens as Caroline Spelman. There has to be doubts as to whether that’s a sensible strategy. It is clear that Mr Osborne will not be appointed as the powerful Chairman that ConservativeHome had hoped he would become. He is going to remain Shadow Chancellor. Fair enough. But it is now important that many more voters want to trust him with the nation’s finances. He needs to look in charge of his brief. Solid. Reassuring. With policies to reverse Britain’s declining competitiveness. He is pursuing promising ideas on tax simplification, IT’s transformative effect on government and financial regulation. We need to hear much more about those and less of what George Osborne thinks about Labour’s day-to-day political woes.
2008 is the year in which George Osborne must become the nation’s Chancellor-in-waiting.