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George Osborne's economic narrative is taking shape

By Tim Montgomerie
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Throughout this week we'll be previewing next week's Autumn Statement. Pete Hoskin will wonder if George Osborne should abandon his fiscal targets. Paul Goodman will return to the need for a long-term examination of what the British state should spend. Tom Frostick will urge the Chancellor to target wealth but John Redwood will urge Mr Osborne to keep a lid on the tax burden. Andrew Lilico will look at the global risks to the Chancellor's economic objectives.

Today I want to briefly note that after some early mixed signals the Chancellor does seem to have developed a pretty clear narrative on economic policy. Some of this was set out in his recent article for The Times (£). But these are three top messages we are hearing regularly from his lips and from those of his lieutenants...

  • Britain is on “a hard road to a better future” and “we’re on the right track, don’t turn back”. The road will be characterised by twists'n'turns, ups'n'downs but it will be worth it. This gritty message is quite a contrast to the early days when an impression was given that the economy could be fixed by the time of the next election. Osborne was known to say that voters don't want cod liver oil all of the time. His message is now drenched in cod liver oil. Compared to those early days the message is also broader. It's not so deficit-focused. The focus on economic growth was powerfully demonstrated in the the Osborne-octupus' control of the September reshuffle. There was the promotion of Liz Truss to childcare, Fallon and Hancock to BIS, Clark and Javid to his Treasury team, Hayes and Paterson to environmental briefs and Boles to planning. Osborne has to act within the constraints of the Coalition and he acted late but he has now acted. Yesterday's very welcome appointment of Canada's central bank governor to replace Mervyn King and also the recruitment of LOCOG's supremo, Paul Deighton, to join the Treasury are further signs that he is taking far-reaching and impressive personnel decisions.
  • “We are all in this together” has been replaced by a more striver-orientated message. A sense that Mitt Romney was NOT on the side of ordinary Americans was the chief weaskness of his presidential campaign. Few voters are really going to believe that the PM and Chancellor are really sharing the pain but they can at least show that their priorities are petrol tax, the basic income tax threshold, council tax and energy prices. The Chancellor has also fought hard for higher council tax bands believing that a tax on the wealthy to pay for a tax cut for the poor is one of best ways of showing that the Conservative Party is on the side of ordinary families. It seems that David Cameron has vetoed this policy. That's a shame as the blood-on-the-carpet row that would have followed would have been an electric way of showing that this really was a one nation Tory leadership. Sometime soon the Chancellor should give a landscape speech on tax policy setting out his priorities. He may not have much money now but let's hear him say that the working poor are his number one priority. Let's never again be in a position where Lib Dems own a policy like the £10,000 tax threshold. Let's lead the tax reform debate.
Labour Arsonists copy
  • Don't hand the matches back to the arsonists who set the economy on fire. George Osborne has sometimes been frustrated by the lack of fight among Tory MPs and their unwillingness to pile the pressure on Ed Balls - as during last year's Barclays Libor row. Team Osborne wishes the backbenches were more tribal and more willing to kick Labour for its faults - rather than their own frontbench for the alleged inadequacies of Coalition economic policies. Recent polling has encouraged Treasury optimism however. Superficially voters say that there's not much difference between how they view the Tory and Labour economic teams but scratch the surface - as Lord Ashcroft did in his recent mega poll - and Labour has not rebuilt confidence in its economic credentials. Lord Ashcroft found that 49% of voters thought the debt level would have been worse if Labour had been in charge and only 17% thought it would have been better. That's a 32% Tory advantage. On the overall state of the economy the Conservative advantage was 19% and it was even 4% on jobs.

Tough decisions for the long-term (on the deficit, taxes, welfare, education, infrastructure).

A commitment to create sustainable and shared prosperity.

A warning not to hand the keys back to the guys who drove us into the ditch.

A clear Tory economic narrative is beginning to take shape.

> Starting today Greg Clark MP begins a weekly letter from a Treasury minister.


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