Budget shows Osborne is emerging as a Tory leader

George was happy to be part of the team, and that meant David could trust him and depend on him in a way that Blair never could on Brown. Picture: Johnston Press

To the left, he is a contemporary hate-figure without parallel, the living embodiment of all that it despises about the Conservative Party. While Prime Minister David Cameron may have presented himself as a new kind of Tory, his Chancellor – and closest confidant – George Osborne is unashamedly unreconstructed.

Osborne’s Budget, delivered on Wednesday, was old-school Tory in its content. For the haves, there was a cut in corporation tax and a lift in the inheritance tax threshold; for the have-nots there was a freeze on benefits and the scrapping of housing benefits for 18 to 21-year-olds.

The sight of former party leader Iain Duncan Smith shaking his clenched fists as he roared his approval of spending plans that appear to favour the better-off while taking from the poor, the disabled, and the young can only have helped crystallise the perception among some that this was the “nasty party” of old.

But regardless of one’s opinion of Osborne’s plans, it is clear that the Budget was the work of a politician with both confidence and authority, which begs a question: might his star rise higher still?

Cameron’s decision before the general election to reveal, during a television interview, that he would seek a maximum of two terms as prime minister came as something of a surprise. Some suggested he had, in an instant, undermined his own authority, while there was soon speculation about who might succeed him.

Given it is unthinkable that Cameron could lead his party into the 2020 general election, there will be a vacancy soon. The successful candidate will be guaranteed a spell at the head of government without having to face the electorate.

As has become something of a tradition, those suggested as possible successors included the mayor of London Boris Johnson and Home Secretary Theresa May. Both have many champions in the Tory party, and larger-than-life populist Johnson has made little secret of his great ambition.

Speculation that Osborne, 44, might make the step up came as something of an afterthought. But, after delivering the first completely Conservative Budget in almost two decades, he is seen by some in his party to be a front-runner.

When the Chancellor’s parliamentary career began on his election as MP for Tatton in 2001, there was little to mark him out as being destined for the highest office. He had previously worked for William Hague, during his unsuccessful spell as Tory leader between 1997 and 2001, and had, according to one colleague, done nothing in that time to suggest he was especially talented.

“He was ambitious and slightly annoying in the way that young people in politics can often be. He’d come up in the usual modern way, working for the party, working for a politician, then standing for election. MPs like that aren’t thin on the ground, are they?” said one insider.

It was former Tory leader Michael Howard who set Osborne on the course that took him to the Treasury in 2010. He appointed Osborne shadow chief secretary to the Treasury in 2004 and, after Labour’s third successive general election victory in 2005, made him shadow chancellor. It was quite a promotion for a 33-year-old, who would find himself trying to best Labour’s big beast Gordon Brown in debate.

Despite some speculation that Osborne might run for the Conservative leadership when Howard stepped down after his election defeat, he ruled himself out and instead took on the role of manager of Cameron’s ultimately successful campaign.

According to one Tory insider, there were echoes of the relationship between Labour’s Tony Blair and Gordon Brown in this arrangement.

The source said: “It was two guys reaching an agreement that they thought would give them the best chance of winning an election. George was clever enough to recognise that David seemed different when the Tory Party needed someone fresh and different. You could point to David and say, ‘Look, he’s not a nasty old Tory’, and George knew that was exactly what the party needed.”

There was, said this insider, a crucial difference between this relationship and the one between Blair and Brown.

“The big thing was that not only did George recognise that David was the one most likely to win an election, he also didn’t have ambitions to get the top job himself. He didn’t have to make the same sort of sacrifice to support David that Gordon did so that he could support Tony.

“George was happy to be part of the team, and that meant David could trust him and depend on him in a way that Blair never could on Brown.”

There were, of course, no guarantees that throwing his support behind Cameron would mean political success. When Brown took over as Labour leader in 2007, the Tories were not doing well in the polls. It was Brown’s decision not to call a snap election that gave his opponents some breathing space.

A Tory source said: “George could have been part of another failed Tory leadership project if Brown had had the courage to go to the country. David would probably have lost an election in 2007 and that would have been the end of that. Maybe George would have stood to succeed him, but at that stage he was hardly more appealing than David. In all likelihood, he’d have waited it out and let someone else have a crack.”

There has been a tendency among some commentators to paint Osborne as a rather weedy character among the Cameron coterie, but a look at his life shows a bloody-minded determination that first revealed itself when he was just 13 years old.

Until he reached that age, Osborne was known by his given name of Gideon, but in what he has described as an act of rebellion, he decided to ditch it in favour of his grandfather’s name.

Osborne, the son of Sir Peter Osborne – founder of the wallpaper and fabric company Osborne and Little – grew up in relative privilege, though his family’s finances were not always as healthy as those of his peers at Oxford, where, like David Cameron and Boris Johnson, he was a member of the Bullingdon Club, ostensibly a dining club but now notorious as a boorish clique whose members’ drunken behaviour has come back to haunt some of its famous alumni.

One Tory source said Osborne was a perfect fit for the club. “He might want to play it down now because it’s bloody embarrassing, but he was a cocky young man who thought he was a cut above. There’s a good reason people think the Bullingdon boys were awful, and that’s because they really were awful.”

Osborne was quite the party animal in his early 20s; in 2005 a photograph showing him socialising with a dominatrix led to him denying allegations of drug abuse.

But, say friends, he has proved himself a serious political figure and his past should not be allowed to haunt him. One said: “It’s easy to forget that people predicted the coalition would fall apart within a couple of years, but George played a key part in making sure that wasn’t the case. He managed to keep the Tories and the Lib Dems happy when each had very different priorities for how the money should be spent. It’s far more difficult to be Chancellor in a coalition than it is in a majority government and George did it brilliantly.”

Should Osborne make a successful pitch to succeed Cameron he would become prime minister before his 50th birthday, opening up the prospect of a lengthy period in power. Labour’s ongoing woes will certainly enhance the prospect of that being so.

But Osborne will certainly face a serious challenger, should he make a pitch.

Boris Johnson, back in the House of Commons and preparing to step down as mayor of London, is all but certain to apply for the position Cameron plans to make vacant before 2020. And some in the Tory party believe he represents an unstoppable force.

One source said: “Boris is a rare political figure in that he transcends party politics. He won the London mayoralty even though the city elects more Labour than Tory MPs. He’s a character with broader appeal and that might be the key to him winning the party leadership.

“Boris is a Tory to his fingertips, but the thing is that people don’t always realise that and it means he can win votes from people who wouldn’t usually vote Tory. You can’t say that about George. He is as Tory as they come and anyone can  see it.”

Osborne may have changed his name and his appearance (he shed weight after being advised to do so in 2012) but he seems unable to change the less appealing aspects of his nature, notably a tendency to be sneering and dismissive. When under pressure, particularly, he can come across as a braying Tory, and that is not necessarily a vote-winning strategy.

A Scottish Tory Party insider says this may be a particular problem north of the Border.

“The SNP wants to characterise us as monsters and George is the sort of Tory it’s easy to do that to. He’s a privileged southerner who used to be called Gideon and he’s frozen benefits. Those attack lines will write themselves.

“It doesn’t matter that he’s had to do what he’s done to cut the deficit, they’ll just say he was the man behind austerity, and that’ll be grim for us in Scotland. At least with Boris, you get a character instead of a textbook Tory.”

But the Scottish party – with just one MP – won’t have much say in selecting the next leader of the Tories. And, after a Budget which pressed all of his party’s buttons, George Osborne must be seen as a serious contender for the job.