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Osborne has no regrets as he starts the fightback

By Tim Montgomerie
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OsborneinTelegraph
We haven't heard much from George Osborne since the Budget but the Chancellor has broken cover today and he's very much in "je ne regrette rien" mode.

  • He tells The Telegraph's Robert Winnett that Britain's newspapers may have been obsessed with the pasty and granny taxes but investors from overseas had noticed his big judgments including the cut in the top rate of income tax and also the year-on-year reductions in corporation tax. “It was the story that was noticed around the world,” he insists and what had been noticed was that Britain had a government ready to "to do difficult things”.
  • Mr Osborne says it was "right and fair" to freeze pensioners' personal allowances and that the pasty tax addresses a "glaring anomaly"*.
  • The Chancellor also hit back against his critics. Responding to David Davis' concern that the Tory Party appeared to be led by people from a "different world", he said “that is, again, a usual charge from the usual suspects.”

Mr Osborne said there is a time when a political party needs to focus on newspaper headlines and opinion polls but now isn't that time. He twice says there isn't any point in being Chancellor if you are not prepared to use mid-term budgets to do difficult things.

Bombshell

COULD OSBORNE REVIVE THE TAX BOMBSHELL?

In terms of long-term politics Mr Osborne's thinking was revealed just over a week ago in the FT (£). Towards the end of this parliament he'll set out a programme of spending cuts that will eradicate the deficit by 2017. He will challenge Labour to match those cuts (which will be difficult given Labour's relationship with the unions and public sector interests). If Labour doesn't match those cuts he's likely to wheel out a version of John Major's tax bombshell campaign. The Chancellor calculates that a tricky economic backdrop at the next election is unlikely to be a bad thing for the Conservatives as long as Labour remains more untrusted (which is still the case - albeit less so). Voters, Mr Osborne thinks, will always hold on to nurse for fear of something worse.

The Chancellor also used his Telegraph interview to say that he thinks ministers should publish their tax records. John Redwood does not agree but James Forsyth is surely right in blogging that any party leader who does not now do so risks the issue becoming an election controversy.

* VAT already applies to fish'n'chip shops for example. Why not pasty shops?

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