There’s a Budget just around the corner. And like many in the last decade, it looks a tricky one. But for the best part of the week, it’s the moment when the Chancellor of the Exchequer steps onto centre stage. Is George Osborne backed into a corner financially? Is it made more difficult by the EURef? Is he taking political knocks in the Tory leadership race? What has he got to say just three months after a major spending review? Does all this add up to a low key Budget? Not a chance.
Budgets are always an opportunity for Chancellors to make an impact and to hog the political limelight. That has always been the case with George Osborne. Even when he’s had difficult financial cards to play he’s relished the opportunity to score political points. Gordon Brown was the same. Budgets are always a chance to get on the political front foot and to take potshots at those standing in your way.
And this year there are plenty of targets at which Osborne may take aim. Politically (even if not economically), it could be like shooting fish in a barrel. Because as many have observed, Osborne is the most political of chancellors.
There’ll be the opportunity to have a go at ‘Corbynomics’ of course – another outing of the long term economic plan and trust in the public finances that the Conservatives always seem to hold. Never mind that he’s missed several targets and adopted so many even longer term economic plans that it’s hard to keep count. This could be the early material, the warm up, political throat clearing. It will be a strong reminder of Conservative credentials but not the core of the speech or of his political attacks.
That will be reserved for the ‘outers’, the ‘Brexit brigade’ – that now seems to occupy about a third of the cabinet and at least half of the Conservative benches. It would almost certainly be more if loyalty and ambition hadn’t got in the way. For all of the talk of Boris Johnson there are plenty more amongst ministerial ranks that have let personal ambition help to make their ‘agonising’ decision to stay. They are easy enough to spot.
So he’s in a corner and there will be as much opposition behind as in front of him – as well as to the left and right – he still has a post IndyRef score to settle with the SNP even if they agree with him on Europe. But it’s the folk sitting beside and behind him that he will be most interested in. It’s their support he needs if he wishes to renew his ascent to the leadership. His chances will disappear – possibly as early as the summer – if we vote to leave. Osborne needs to renew the confidence of those that have taken his and Cameron’s side in the leadership and in the EU Referendum. In other words he needs to play a blinder.
Boris Johnson has been Osborne’s target before. Remember the planes flying over West London? He’ll need a new line, because a different half of the cabinet are still trying to forget the promise to make a decision on a new runway. But Johnson will take some new schtick. Osborne may claim that it’s him and Cameron that have protected and supported the City of London and the capital’s economy. Not Boris or Zac. Perhaps some more of his growing love – and gratitude – for Theresa May and a reminder of Boris’s mothballed water cannons?
But he will have to take on the long term economic plan of the ‘outers’. That’s a sovereign but ‘small state’, free market, more right wing view of the UK in the world. A view that Osborne used to hold but has changed significantly since being in office. Despite the continuing austerity headlines and Labour attacks, the last spending review cemented his move to the political middle ground – slower cuts over the longer term – and a willingness to use the state to do more things. He admitted that he’s become a hybrid of Lawson and Heseltine and it’s the latter part that sets out dividing lines with Johnson, Gove and company.
When businesses, universities and council leaders offer their vocal support for the ‘in campaign’ and their tacit support for Osborne, it’s because they know that a middle sized, smart, interventionist state is what they actually want to see within the EU. Northern Powerhouse, science, health investment, devolution, infrastructure. Part of the ‘outers’ argument has always been about a ‘small state’ over ‘big state’ vision for government. It’s easy to see the big, bad EU in this ideology and that’s something that no renegotiation could ever solve.
So when Osborne offers a promises for more infrastructure, more science, more human capital – whether graduates or apprentices – be sure that this is a dividing line with the small state ‘outers’.* Theirs might be painted as a 19th century romantic vision of small government: unencumbered (and unfunded) inventors and industrialists building new trade empires and new industrial revolutions. I imagine that Osborne and Treasury economists might describe it as steampunk. If they knew what that was. Or Pride and Prejudice and Zombies.
So the political, economic and the personal stakes are extremely high. For the UK, for the Conservatives and for Osborne and Cameron. Expect the Chancellor to come out fighting. This has the feel of a Budget before an election, not one shortly afterwards. This is a moment for Osborne to show his vision for Government – as well as his vision for his own leadership. He must play to his strengths and be the best of Lawson and Heseltine. He will have to bestow a few favours here and there. He will have to be at his political best. He will have to look like a Prime Minister in waiting. He cannot afford a low key outing and he cannot afford to make mistakes. He may not have another chance.
* let’s forget that there’s an official opposition – and plenty of less formal opposition to these policies for the moment. Their time may come but it’s unlikely to be the main political issue of this Budget.