LONDON LETTER:The chancellor of the exchequer's talents as a strategist may be questioned, but, undoubtedly, he does look further out than many of his breed, writes MARK HENNESSY
FOR MANY Conservative MPs, chancellor of the exchequer George Osborne is the great Machiavelli of British politics, endlessly seeing opportunities where others see only haze.
Much of his reputation lies in his humbling of Gordon Brown in 2007 when the Labour leader was ready to call an election while still in the first flush of popularity, brief as that turned out to be.
Ever nervous, Brown was forced into scrapping his plans – and destroying much of his public image – after Osborne promised to set a £1 million (€1.2 million) inheritance tax threshold.
Now, some of Osborne’s supporters have begun to display doubts, following gaffe-strewn days that started with raising taxes on pensioners, then the scandal over access to Osborne and Cameron given to wealthy party donors.
The so-called “granny tax” in last week’s budget – where pensioners will lose some of their tax-free allowances – came as a bolt from the blue.
Within minutes of his speech ending, treasury officials at the back of the Commons chamber stammered under questioning from the press, which saw political vulnerability where Osborne had not.
Since then it has got worse: a VAT rise on hot takeaway food such as pasties has offered plentiful headlines and west country outrage, with Osborne unable to say when he last ate one.
In an editorial, the Sun said it was “fun to imagine” Osborne as a modern Marie Antoinette in her “let them cake” moment, though it added there were “serious parallels”.
“She had no concept of starvation. Likewise the chancellor and his rich cabinet colleagues cannot begin to understand what it’s like to be so hard-up that a sharp rise in the price of a pasty will hurt.”
In itself, the pasty tax is of limited significance, though 13,000 people work in the industry, but it feeds into a dangerous narrative for the Conservatives that they are not in touch with struggling voters.
Ever quick to rattle off a defence, prime minister Cameron told of how he last had one in the recent past from a food-stall at Leeds railway station. The stall closed five years ago.
Now, number 10 is convulsed by fears of petrol shortages. The Conservatives seized on petrol-tanker drivers’ threat to strike, content to display them as wreckers of the economy.
The strategy has merits. The drivers are comparatively well-paid, but more importantly from the Conservatives’ point of view, they are members of the Unite union.
Led by Len McCluskey, the man the Conservatives are happy to paint as “Red Len”, a role the less-than-subtle McCluskey enjoys – Unite is one of the biggest donors to the Labour Party.
Hamstrung, Labour leader Ed Miliband called for a peaceful resolution, but refused to condemn the strikers in a “hate the sin, but not the sinner” moment.
However, Downing Street moved too soon, provoking panic purchases of petrol. On Wednesday, petrol sales were up 81 per cent on normal, with diesel up by nearly 50 per cent.
Making the situation worse, Cabinet Office minister Francis Maude urged the public to store petrol in their garages, before number 10 bowed to fury from firemen who thought the suggestion moronic.
Much of number 10’s strategy on such issues is dictated by Osborne, who comes in twice a day to lead operations, leaving the front-of-house role to the more presentable Cameron.
Osborne’s strategy in 2010 was to make quick spending cuts and then see the economy regrow from next year onwards, before heading into the 2015 election campaign.
That plan has already been dumped. Cuts will have to continue until 2017 at the earliest, while under Osborne the UK’s national debt will have grown by half by then, despite all his talk of austerity.
Yesterday, the Organisation for Economic Co-Operation and Development, which has long supported Osborne’s strategy, warned the UK economy has been shrinking since last October.
Pressed at such times, Osborne points to the low interest rates charged by the UK’s lenders as proof that the markets believe his course is the right one.
However, the hidden reason for the low interest rate has been the Bank of England’s seemingly endless use of quantitative easing, the electronic printing of money.
Osborne’s talents as a strategist may be questioned, but, undoubtedly, he does look further out than many of his breed. Upset grannies in the shires will not vote Labour, he believes.
Equally, he believes the cut to 45p in the top income-tax rate will be justified by the returns, though that outcome is far from guaranteed. Indeed, it could leave the treasury with a £3 billion hole in its accounts.
In his mirror-gazing moments, Osborne sees himself as the successor to Cameron, who few believe wants to serve more than two terms, if he gets that far.
Osborne, particularly over the top-rate tax cut, has won favour with some of the 2010 intake of Conservative MPs, who are more right-wing in their economic views than their predecessors.
However, with a reedy voice, a startled look in photographs and a biting temperament when the mood takes him, the chancellor is not everyone’s idea of a prime minister.