Would George Osborne be better as Deputy PM?

I'm 90% sure that David Cameron - should he become Prime Minister - will appoint George Osborne as his Chancellor and I recently revealed that there are draft plans for a joint Downing Street HQ for the two men... but, but, but, even at this late stage, I think there are two very good reasons why George would be better as a very powerful Deputy PM than as the first Tory Chancellor of the 21st century:

(1) The next Chancellor is going to be very, very unpopular

John Kay in yesterday's FT warned:

"A tax package to raise £70bn ($115bn, €82bn), probably the minimum required to stabilise Britain’s public finances, might put four points on the rate of income tax, take VAT to 20 per cent, freeze personal allowances and tax thresholds, add five points to corporation tax and collect a bit of extra revenue from the usual suspects such as alcohol, petrol and cigarettes. I wouldn’t want to be the political front person for that package. Perhaps the opposition Conservatives should give the finance portfolio back to Kenneth Clarke. In 1997 he lost the election no chancellor would want to lose. Whoever succeeds in 2010 will have won the election no chancellor would want to win."

I'm not convinced that Clarke should be Chancellor again (Philip Hammond, the already powerful Chief Secretary, may be a good candidate) but there is a strong case for somebody other than George Osborne dishing out the very unpleasant medicine and then retiring from the position midway through the next Parliament.  After two years of wielding the axe the Tory government's Chancellor of the Exchequer is likely to be incredibly unpopular.  Huge numbers of public sector workers will hate the Chancellor.  The unions and the wider Left will use the internet to run nasty, populist campaigns against him.  David Cameron will be best served by having somebody do the dirty work and then a new guy coming in for the re-election campaign.

(2) The Conservative Party needs 100% of George Osborne's political brain

George Osborne is at the heart of the Cameron Project's political successes (Download Wallchart).  He ran David Cameron's leadership campaign.  He recruited Andy Coulson.  He ditched uber-modernisation and introduced the skin-saving inheritance tax cut of 2007.  He overhauled Boris Johnson's mayoral campaign when it was in trouble.  He oversees the campaigns team that delivered our ground war successes at Crewe and Nantwich and in the local elections.  He has been the behind-the-scenes bad cop to Cameron's good cop in expenses-gate.  This activity is essential to the Cameron Project's success but Britain also needs a full-time Chancellor and at the moment there are stories of a 40% Shadow Chancellor.  The actual percentage may be unfair but it's certainly true that George Osborne is doing two big jobs.

Let me be clear: I think George Osborne would be an effective Chancellor.  Yesterday's call on restoring the Bank of England as lead financial supervisor was only the latest in a series of good judgments.  I like George and will always be grateful for the support he gave me in the early days of the social justice agenda.  I just happen to believe that the party will be stronger if he has a more political role and takes lead responsibility for some of the party's strategic initatives.  In the first years of a Conservative government I think he'd be better as a Deputy PM rather than as Chancellor.

Tim Montgomerie