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What makes George Osborne get out of bed in the morning?

By Paul Goodman
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 Has he changed? If so, how?

First and last, a political animal.  Preocuppied with winning .  The Government's real head of strategy.  Full time in that role, part time as Chancellor.  Is prepared to take risks.  Loves the political game.  A social and economic liberal by instinct.  Has a young man's zest for politics. Keeps his family out of the spotlight. Has pinned his colours to the mast of deficit reduction.   Wants to be Prime Minister.  This snapshot is the George Osborne we all think we know.  But as he prepares to deliver his third budget - parts of which have been wrangled over, unusually if not uniquely, in public for almost a month - how true is the caricature? And how much has the Chancellor changed in office?

"He's become more patient," a political ally told me, "more relaxed about events.  In opposition, you want to be the story - you want to know if you have made page four of, say, the Times.  But in government, you are the story.  You are defined not by what you say, but what you do."  He searched for words to describe the change: "He's more solid, has more bottom, is more weighty.  Patient -" he added, deploying an Osborne-type soundbite, "with a purpose".

Team Osborne, front of house

Purposeful is certainly the right word for the Chancellor.  Once installed in the Treasury, he sniffed at settling in Gordon Brown's old room there and plonked himself in the largest one in the corridor.  No-one may know quite who is in charge of Team Cameron, but in Team Osborne, like the mythical village in Fiddler on the Roof, everyone knows who he is and what he is expected to do. Osborne has kept the core of his Shadow Treasury team in place: Mark Hoban and David Gauke are now real Ministers.  Those who have moved on have prospered.  Phillip Hammond, the former Shadow Chief Secretary and an ally, is in the Cabinet at Defence and Justine Greening, once Shadow Economic Secretary, is also there at Transport.

Mark Francois, another former team member, is a senior whip. Greg Hands, Osborne's energetic former PPS, is also in the Whips Office: indeed, he went straight in as Treasury whip - a move that ruffled a few feathers there - and remains an integral part of operation Osborne.  Hands has been replaced by Sajid Javid, a former senior managing director at Deutsche Bank, who helps work on policy.  Then there are the new MP supporters, such as Matthew Hancock and Claire Perry.

The Chancellor as whip

But though the reach of the Treasury is very long, there is a danger of it becoming over-long.  The revolt of the 81 over an EU referendum was swollen, as such uprisings usually are, by personal grievance as well as political principle.  Chloe Smith had just been plucked out of the Whips' Office to replace Justine Greening as Economic Secretary, and the appointment of a relatively new MP to the post was claimed to have discombobulated older ones and to have helped stoke the rebellion.  Less well reported was feeling over the appointment of Perry as Philip Hammond's PPS.  In effect, she simply elbowed out Tobias Ellwood, the PPS in place and one of the earliest supporters of Cameron's leadership bid.  Ellwood is now PPS to David Lidington at the Foreign Office.

Osborne has also involved himself in whipping - at least from time to time - more than usually is the case with Chancellors.  There was a well-publicised altercation with the independent-minded Tracey Crouch over the tuition fees vote.  But these ups and downs are unlikely to deter the Chancellor from working away with his Parliamentary colleagues.  After Prime Minister's Questions each Wednesday, he strides purposefully with David Cameron into the members' dining room.

The Chancellor and colleagues

Javid steers him towards an suitably vacant seat.  After lunch, Osborne decamps to his Commons room in the complex behind the chamber, where he will meet backbenchers, listen to views, weigh suggestions and ideas.  A senior one, such as Graham Brady, the Chairman of the 1922 Committee, will get an hour or so in Number 11.  "He's thoughtful and reflective," a senior Minister told me.  "He listens.  He understand the importance of ideas and is quick to pick them up."  He has also been doing the pre-budget rounds with the backbench groups, especially the new ones: the Free Enterprise Group, the 2020, the 301.  "He's generally in the tea room more than he was," said a member of one of them.

The tight back-of-house team that helps turn ideas into policy includes Rupert Harrison, a former recruit from the Institute of Fiscal Studies, and Eleanor Shawcross.  Harrison is the more outward-facing of the two, and an embodiment of how the Chancellor does business.  Near the core of the Number 10 Team are people who Cameron has known for years: Ed Llewellyn, Kate Fall, Patrick Rock - part of his political or social circle.

Team Osborne, backstage

Osborne works differently.  Backroom toilers such as Harrison and former ones such as Hancock have been part of his team for over five years.  But they weren't well known to him when he appointed them: he selected fair and square on merit, as he saw it, with a judgement untainted by affection.  If that sentiment doesn't capture the flavour of the Chancellor's operation, another does: loyalty.  Osborne prizes it highly, and looks after his proteges on the not unreasonable basis that they will look after him in return.  But what matters far more is how he is looking after the economy - and whether, since he doubles up as Cameron's main political strategist, he is looking after the Tory cause too.

"He has gradually gained a measure of trust on the economy, and won public support for deficit reduction," said a former senior Minister who is not, on the whole, a fan.  This element of the case for Osborne's defence can be forgotten all too easily.  It isn't that long since the Conservatives simply weren't trusted to handle the economy, and although Brown's failures provide a more solid explanation for the change than any Coalition achievements, it has come about none the less.

The case for the Chancellor...

The Chancellor's supporters also point to the role he played in preventing a 2007 election which could have returned Brown with a majority: Osborne's proposed package of tax cuts helped to turn the polls on their head.  It was the first time that a central instigator of the Cameron project renounced uber-modernisation - indicating that tax cuts aren't a Thatcher nostalgia gimmick but a modern electoral requirement.  Osborne wanted the election campaign to be less a blue sky Big Society sketch than a hard-nosed retail offer.  And the supreme tactician insisted unflinchingly on the need for deficit reduction.  That both reflects well him and probably lost the party seats. (It's debatable whether it would have done so if the case had been argued earlier in the Parliament).

One of his fans claimed to me that he has a serious interest in tax simplification.  But it is here that the case for the defence starts to run into trouble and the case for the prosecution begins.  What, I asked that former senior Minister, are the Chancellor's best moves to date?  There was a very long pause.  The corporation tax cut, I suggested?  "Yes...though of course that was funded by abolishing allowances, so it wasn't actually a reduction," came the reply.

...And the case against

I tried the same question on a bright 2010 intake backbencher.  A sigh came down the phone.  "Well, he has taken some low earners out of tax, which is a good thing."  The voice brightened a little.  "And there are a lot of bad things that he hasn't done."  Which is true.  Any sensible person knows that the scale of the deficit gives Osborne as much room for manoevre as Eric Pickles has in a Portcullis House lift.  Hence the pre-budget debate over potential new taxes on wealth and pensions and property, as the child benefit controversy rolls on: with the Chancellor apparently unwilling to cut spending further, the fight is on for whose tax rise might fund another's tax cut.

It is here that the heart of the criticism of Osborne is to be found.  That his growth strategy is "incoherent" - as Andrew Tyrie, the Treasury Select Committee Chairman put it - or worse.  "I think his instincts are right," that backbencher said, "but there is a massive competitiveness problem, a skills problem, that isn't really being addressed." The former Minister pointed to a series of revenue-raising raids: on north sea oil, on non-doms, and now - perhaps - on pensions.

Osborne, the real heir to Blair?

These are scarely unique.  Consider, for example, Ken Clarke's introduction, when also a revenue-raising Chancellor, of air passenger duty.  But they raise the question of what Osborne's vision of the future of the tax system is, and other wide considerations.  "My main criticism is that we hear too much about the deficit and not enough about the debt - about the long-term challenges of an ageing population facing the rise of the new economies," said one observer.  "I'm afraid that George has got the Blair virus".  The charge ends as the familiar one: that the Chancellor is not so much Continuity Brown, as Douglas Carswell has dubbed him, but the real "heir to Blair" - as Cameron proclaimed himself to be near the start of his leadership bid.

The pledge to raise the international aid budget in real terms, the greenery with huskies and windmills (which Osborne is now cutting loose), the stripping of Fred Goodwin's knighthood (followed by a banker-friendly speech to compenate): all these, the critics argue, are damning evidence of tactics over strategy, style over substance, a hole at the core where conviction should be - signs of the post-1997 Tory nervous breakdown which the leadership cannot shake off.

Not a southern softie.  The fight for midlands and northern marginals.

"Part of the problem is the degradation of politics which has occured since my time," one of the Chancellor's predecessors said over the weekend.  "I refer to image-led politics, driven largely by what goes down best with the media."  Such were the words of Nigel Lawson, a tax-reforming Chancellor and an utterly unspun politician.  Osborne's private response would doubtless be acid.  Society has changed.  So has politics.  Vote distribution favours Labour, and will do so even after seat reduction.  Scotland is lost for the party.  The political environment is far more challenging than the '80s. So the party must pitch for liberal southern votes at one end of the scale - by supporting gay marriage, for example - while advancing in the midlands and northern marginals.

The Chancellor has the latter much in mind, and can't simply be caricatured as an urban softie.  The benefits cap was his creation.  He has scaled back tax credits for better-off voters, in an effort to wean then off welfare dependency and reverse Brown's legacy of state growth.  Osborne has said that the Government is for the man who gets out of bed in the morning to go to work, not "the person down the street [who] is defrauding the welfare system".

What sort of Britain does he want to see?

If he wants to succeed David Cameron as Prime Minister, the Chancellor will face a political problem: namely, how to reinvigorate a government after a long period in office - the challenge that Antony Eden and John Major and Brown failed to rise to.  He will also face a personal one: how to project himself with Cameron's natural assurance, and live with his family in the spotlight.  (Osborne and his author wife, Frances, have kept their children very much out of it.)  But if the moment ever comes, the voters will pose a bigger one still, in their shrewd, half-formed, intuitive way.  They will want to know: what makes Osborne himself get out of bed in the morning?  Is it more than winning?  What else drives him?  What sort of Britain does he want to see?

Other than not backing off during the election on deficit reduction, the most durable sign of the inner Osborne to date lies in his attachment to America in general and liberal interventionism in particular - hence his close relations with Michael Gove and Liam Fox.  (Watch for Fox to be deployed post-budget if the going gets tough.)  He may have fallen in love with the States while studying there, and raised eyebrows by flying out with Cameron this week pre-budget.

The thrill of that White House visit will be fading.  It's back to budget preparation for next week and the familiar routine of briefing favoured journalists, making time for backbenchers, attending the 8.30am and 4.00pm Downing Street strategy meetings, dealing with the Liberal Democrats (as one backbencher put it: "Vince Cable is the real Shadow Chancellor"), and keeping an eye on Boris Johnson.  He is not, his supporters insist, a submarine Chancellor: they claim he's done more Commons debates and statements than Brown, and say that he keeps up his quota of Friday visits to businesses and enterprise.  But if he is eventually to move next door he will need to prove to the electorate that he's more than a political animal first and last.

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