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Osborne remains Whitehall's central figure but he's looking lonelier these days

By Tim Montgomerie
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George Osborne may have had a difficult year but I argue in today's Times (£) that he remains the dominant figure in Whitehall. Putting aside the centrality and constancy of his economic Plan A he is, more generally, the Government's Chief Executive to Cameron's Chairman. The 'Octopus' whose tentacles reached into every key department during the recent reshuffle. In recruiting Mark Carney (most spectacularly), Lynton Crosby and Neil O'Brien he shows he still has the power to surprise and command. It's a slot in Osborne's diary rather than in Cameron's that most ministers most crave.

Osborne is also on the right side of most important arguments. His push over the last year for a more common sensical approach to energy policy is likely to reach a new culmination today in incentives for shale gas exploration and a further freeze in petrol duty. Noone in government is more aware than Osborne that the cost of living pressures on working families are the top political issue for the Coalition. Outside of his brief it is the Chancellor that is pushing the Coalition on protecting press freedom and for a more sceptical position on Europe.

But there are worrying signs for the Chancellor too. I use my Times piece to note deteriorating relations between the Chancellor and some Cabinet colleagues. Ministers who were once in his orbit are now somewhat estranged - notably Justine Greening and Philip Hammond. His manner in meetings towards colleagues - including to IDS, Maria Miller and Eric Pickles - is causing strains. His relationship with Number 10 remains very good, almost impregnable. If he is to remain "unassailable", however, he could do with repairing relations with some of the party's leading members.

If Osborne looks back, however, over his two-and-a-half years as Chancellor my guess is that his biggest regret will not be bruising encounters with colleagues but the lack of a grand growth strategy from day one. And ConHome says this without the benefit of hindsight. We've always backed deficit reduction but have long worried about a lack of growth strategy. From July 2010 we called for cheaper energy for manufacturers and households; a counter-cyclical bank supervisory policy to encourage lending to business; and a pro-enterprise rebalancing of the tax system. Last July we published a growth manifesto. In May this year we suggested a comprehensive and bold competitiveness plan.

If Osborne fails as Chancellor it won't be because of his deficit plan but because - partly because of the restraints of coalition government - he never adequately focused on Britain's long-term competitiveness problem from the first day he walked into Number 11.


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