The most enduringly significant British politician of the last fifteen years isn’t one of the six who have been prime minister over that time. George Osborne would no doubt have loved to be PM, but he probably knew it wasn’t a job for him. Too smirky, too shifty, too obviously at home in City boardrooms – the British public could tell a mile off that Osborne was a bit of a banker. That made him, in political terms, a natural number two: consigliere rather than commander-in-chief. Still, ever since the financial crisis of 2007-8, British politics has been living in Osborne’s shadow. The number ones have been unable to escape it, which is a large part of the reason there have been so many of them.
It was Osborne who spooked Gordon Brown out of calling an election in the autumn of 2007 by promising big cuts in inheritance tax. The policy should have been grist to Brown’s mill – same old Tories looking after their own – but instead Brown took fright when he saw how popular it was. It was also Osborne who devised the political strategy to prise Brown out of office in 2010. He embraced the familiar Labour charge that the election offered a choice between Tory cuts and Labour spending. Yes, the Tories would cut, but only because Labour had overspent. Tendentiously, but highly effectively, he cited the financial crisis as evidence of this. Osborne somehow turned austerity into an election-winning strategy.
From 2010 until 2015, as chancellor in the coalition government, Osborne continued to make the political weather. He dragged the Liberal Democrats into his ‘we-can’t-afford-it’ governing mandate and helped destroy them as a political force in the process. Up went tuition fees, and out went Nick Clegg. David Cameron was the salesman, Clegg was the punch-bag, but Osborne was the one pulling the strings. Whenever he became the focus of attention, as he did after his ‘omnishambles’ budget in 2012, his lack of presentational skills came close to being his undoing. But after the spotlight moved on, he continued doing what he did best: digging a hole for his political opponents and beckoning them in.
At the 2015 election, when Cameron and Osborne secured an outright majority for the Conservatives despite five years of belt-tightening, Osborne targeted the SNP. By suggesting that being propped up in power by the greedy Scots would make Labour even more profligate and irresponsible, Osborne gave his party another election-winning strategy. How fondly we all remember Cameron’s tweet three days before the vote: ‘Britain faces a simple and inescapable choice – stability and strong government with me, or chaos with Ed Miliband.’ Perhaps the most disingenuous thing about it was the ‘me’. In many ways, it was Osborne’s government.
Reappointed as chancellor, Osborne perhaps dreamed about what might happen if Cameron stepped down in three or four years’ time. It wasn’t to be. On one crucial question Osborne didn’t get his way, and it turned out to be the only question that mattered. Osborne was adamantly opposed to Brexit, both in theory and in practice. He tried to dissuade Cameron from holding a referendum on the issue, however confident he was of winning it. You never knew what might happen when the public got their say. And, as it turned out, Cameron and Osborne really didn’t know. Project Fear, masterminded by Osborne’s Treasury, failed miserably. Cameron and Osborne found themselves on the wrong side of a political divide they couldn’t manage: the people v. the establishment.
Over the six years since then a succession of Conservative prime ministers have tried to show that the British public was right and Osborne was wrong. Theresa May, who loathed Osborne, dispatched him to the backbenches with the injunction to ‘get to know his party better’. Other senior Tories whom she also despised, including Boris Johnson and Michael Gove, were summoned back into the fold as cover for her inability to devise a winning Brexit strategy. But Osborne, never. He didn’t stand in the 2017 general election. The dilemma May faced was how to square the circle Brexit had conjured up: on the one hand, it meant more government spending directed towards the people who had voted for it; on the other, it meant less growth, at least in the short term, to pay for this spending. May’s solution was to try to grind out a compromise. That didn’t work. There was never a majority in Parliament for what could be seen as the worst of all worlds: a bit less growth to pay for very little change.
After May’s doggedness came Johnson’s boosterism. He promised to square the circle by pretending it didn’t exist. First, he went back to the strategy that had won the referendum by recasting the choice as one between the people’s will and a foot-dragging establishment, and hired Dominic Cummings, the architect of that strategy, to win a general election for him. He promised not only to get Brexit done, but to ‘level up’ the country in order to reward the constituencies that had voted for it, and to pay the bills by unleashing a dynamic, innovation-driven, self-starting, post-EU economy. The problem was that he had no idea how to achieve any of this. ‘Levelling up’ meant everything and nothing. The strong medicine Cummings proposed to turbocharge innovation – including drastic reform of the civil service, and massive R&D spending in place of simply funnelling money up north – was far too much for Johnson, who was terrified it might make him unpopular. That left a vacuum where serious policy might be. Soon enough the empty space was filled by scandal, with Cummings helpfully unstoppering the bottle.
What was left? After the dutiful May and the vacuous Johnson came the madness of Liz Truss. Apparently, the problem had been sheer timidity. Far bolder and swifter action was needed. Why not spend more – in the form of a massive subsidy for fuel bills – at the same time as cutting taxes and then call it a strategy for growth? To those who complained that the sums didn’t add up Truss had a ready answer: they were part of the anti-growth coalition that had held Britain back for decades. As a political strategy, it was baffling, given that the anti-growth coalition contained many members of her own party, including a majority of its MPs, who hadn’t voted for her. As an economic approach, it was breathtakingly cavalier, since it put the fate of her government in the hands of financial markets that had been jittery for months in the wake of Putin’s invasion of Ukraine. When it all went wrong, Truss claimed that market conditions had deteriorated in the short period after she and her chancellor, Kwasi Kwarteng, made their decision to behave as if what the markets thought didn’t matter. If they didn’t matter, then it shouldn’t have mattered if conditions changed. But of course they did matter.
Even with the benefit of a few weeks’ hindsight it seems hard to understand what they were up to. The death of the queen must have had something to do with it. For years there had been worries that the passing of a monarch who had been around longer than most people – and almost all politicians – had been alive might destabilise the British state. Had the queen died at the height of the Brexit impasse in 2019, when Parliament was barely functioning, it might have made a febrile situation even worse. Had she died during the pandemic – and perhaps of Covid – it could have left the country considerably more fractious and less resilient. As it was, most people took her death in their stride, and it did very little to exacerbate existing political divisions. The only two people who seem to have been unhinged by it were her 15th prime minister and her 24th chancellor.
The warning signs were there early on, when Truss announced that she wanted to accompany the new king on his tour of the four nations of the United Kingdom, although she had only been in office for a matter of days. Someone talked her out of that. Instead, she and Kwarteng spent the next ten days planning for a major shift in government policy at a time when most government activity was on hold. During the period of mourning Britain looked like a country that knew what it was about, confident in its institutions and proud of its traditions. But that’s because it was engaged in the entirely manageable task of organising a state funeral and ignoring everything else. In the absence of anyone to tell them otherwise, Truss and Kwarteng appear to have interpreted this achievement as a licence to press ahead with plans that would subject Britain’s institutions to another stress test. This one didn’t go so well. ‘Dear, oh dear,’ as the king said to his first prime minister at her second (and penultimate) audience with him.
Truss’s seven weeks in office have had two strikingly ironic consequences. The first is that her successor, Rishi Sunak, is in a far more powerful position in relation to the party than he would have been if he had defeated Truss in the members’ ballot over the summer. He would have faced a deeply divided party, many of whom were unconvinced by his stern warnings that the country wasn’t paying its way. The idea that the problem was simply a lack of the political will needed to make a success of Brexit would have dogged his safety-first approach. Now, with this notion having been tested to destruction, he has a relatively free hand. Of course there are still plenty of doubters among the party membership, who continue to blame Sunak for ousting their hero, the never defeated (except by himself) Johnson. They mistrust the corporate sleekness of Sunak’s manner, the cut of his suits, the narrowness of his ties, and, probably, the colour of his skin. But having thrown in their lot with not one but two thoroughly incompetent prime ministers, the doubters have left themselves nowhere else to go.
The other irony is that Osborne – or at least the politics he represents – is back at the heart of things. When Truss, in a first-and-last-ditch attempt to save her premiership, dispatched Kwarteng and replaced him with Jeremy Hunt, she handed over the government’s economic policy to a man who got straight on the phone to his ‘old friend’ Osborne for advice. Rupert Harrison, Osborne’s former chief of staff and one of the architects of the coalition government’s austerity programme, has been recruited by Hunt to chair his advisory council. With Peter Mandelson, New Labour’s consigliere, said to be whispering in Keir Starmer’s ear, it’s like 2010 all over again.
At a particularly stormy meeting of Tory backbenchers after Kwarteng’s tax-cutting budget, Robert Halfon accused Truss to her face of ‘trashing the last ten years of blue-collar conservatism’ by allowing her chancellor to scrap the top rate of tax and the cap on bankers’ bonuses. This missed the point. Cameron-Osborne were never blue-collar conservatives. Both men viewed the City as the engine room of Britain’s wealth and were determined to preserve its competitive advantage. They weren’t levellers up either. Osborne’s Northern Powerhouse scheme was not an initiative intended to redistribute wealth and resources, it was an infrastructure and governance project designed to give investment capital a better chance of finding its way north. The bankers were still in charge.
Sunak isn’t a leveller up either. At a campaign meeting in Tunbridge Wells over the summer, he told local Tories that as chancellor he made sure areas like theirs were getting the government support they deserved. ‘We inherited a bunch of formulas from the Labour Party that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that.’ For all the howls of outrage, there was nothing particularly shocking about this. Governments always favour their own supporters – that’s what Labour’s formulas were doing too. What changed after 2016, and then 2019, was that the government had to consider as its supporters all the people who had backed Brexit, some of whom live in the most deprived parts of the country. But if current polling in the former Red Wall seats – where Tory support has collapsed – is anything to go by, it won’t be their problem for much longer.
Sunak was originally a Brexiteer. He confessed at the time, barely a year after he first became an MP in 2015, that it had been an agonised choice, but his primary motivation seems to have been a belief that Europe was stuck in its ways and represented the past, whereas Asia – China as well as India – was the future. Osborne, though pragmatically opposed to Brexit, also placed a big bet on China, which he and Cameron saw as a vital trading partner, with human rights concerns put to one side. Hunt was never a Brexiteer, whatever he said afterwards. He survived in May’s government despite announcing that he wanted to see a second referendum on continuing membership of the single market, which he favoured. His wife is Chinese, though he once managed to forget this and say she was Japanese.
All in all, this new government looks much more like a continuation of the first six years of post-New Labour Tory rule than the last six years of post-Brexit Tory rule. Osborne’s political tactics are to the fore again. When Hunt said that he would soon be announcing fiscal decisions of ‘eye-watering difficulty’ – spending cuts, tax rises, the works – he seemed almost to be relishing the masochism. Really his statement was designed to put Labour on the spot. Now that it’s clear there is no room for government generosity, what will Starmer do? If he sticks to Hunt’s plans he loses his point as a politician. If he ditches them he risks destabilising the economy. This is pure Osbornomics, which was always just a continuation of politics by other means.
There is, however, one glaring difference from 2010. Then, it was ostensibly Labour that had messed up the public finances. This time, the mess is entirely of the Tories’ making. Can they really point to their own stupidity as evidence of what the country needs protecting from? It’s going to take some sleight of hand to pull that off. Already there has been cheery talk that the Conservative Party – ‘the world’s most successful election-winning machine’™ – has been doing what it does best, which is to purge itself ruthlessly of dud leadership. It’s true that had it been Jeremy Corbyn and John McDonnell who spooked the markets, Labour would have stuck with them out of a determination not to be pushed around by anyone. The Tories bailed out at the first sign of trouble. Perhaps this is the way parliamentary democracy is meant to work. The contrast some conservative commentators drew with Xi Jinping’s recent ruthlessly choreographed coronation as leader for life is not entirely frivolous. Bad ideas are better dumped than doubled down on. Democracies are better than autocracies at dumping bad ideas – China’s zero-Covid strategy is evidence of that. Still, we all know where this bad idea came from. No amount of belt-tightening will alter that awkward fact. It doesn’t help either that there is so much continuity from the discredited regime to the shiny new one. Home Secretary Suella Braverman’s breakneck return to office – after less than a week in the wilderness – doesn’t really draw a line with the bad old days of a month ago.
When Hunt’s measures start to bite, along with higher interest rates, will the voters really conclude that it was all Truss’s fault and Sunak is the one to put everything right? It seems more likely that the Truss premiership has trashed the Tory brand. It took the voters the best part of two decades to forgive the Tories for Black Wednesday, even though it was followed almost immediately by a period of lower mortgage rates and higher growth. The next eighteen months are not going to be easy for Starmer, who will be endlessly confronted with questions about whether he will row back on Brexit and, if he won’t, whether he will commit to the parsimonious political settlement that Brexit now seems to require. He will have to tread carefully. But Brexit is really not his problem, at least not until he becomes PM. The many millions of people who voted for it, including all those who voted Conservative for the first time in the 2019 general election, are unlikely to forgive the Tories for the almighty mess they have made of it. However much it might please Osborne to think so, this is not 2010 all over again. Or if it is, history is repeating itself in the traditional manner: first as austerity, second as farce.
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