Outlook As an economic paradigm, Osbornism has reached maturity: the theory has taken a long time to craft but it has now developed to such an extent that its full force has been unleashed in practice.
The Comprehensive Spending Review (CSR) yesterday and the details of the Government's £100bn infrastructure plan today crystalise the two essential components of an 'ism' that the Chancellor, George Osborne, hopes will become every bit as enduring as Thatcherism.
These facets are a leaner, more efficient Government committed to modern ideas – be it unprecedented levels of outsourcing departmental work to huge corporate entities or new sources of energy like shale gas – coupled with a reliance on private money to build the country out of its economic mire.
Like most economic theories, Osbornism relies on a perfect world that bears virtually no resemblance to the complicated, nuanced realities of everyday life and society.
That's not a criticism. It is, though, an acknowledgement that Mr Osborne has followed the well-trodden path of having to ignore the irritations of a historical mess of regulations and contradictory cultural norms – as well as irrational human behaviour – so as to forge a set of consistent, coherent ideas that will guide his thinking from here on in.
Let's start with that eye-catching infrastructure spending. Forgetting Mr Osborne's dodgy use of gross figures over net, the reality is that actually getting the money spent is not so easy.
The planning system has been reformed time and again, but is still a hugely problematic obstacle for builders in a country determined to protect its countryside.
There are too many protests, planning appeals and regulations for it to be assumed that infrastructure spending can simply be turned off and on like a tap.
Also, most of these projects are reliant on attracting pension funds and the like to invest additionally in new roads, bridges and sewerage systems. The reality is that these funds tend only to buy and sell those type of assets once the things are already built, when any risk to the project – and therefore their money – is virtually nil.
But Mr Osborne needs that money from the outset.
Then, to describe the National Infrastructure Plan as a 'plan' should be against the Trade Descriptions Act: it is a list of projects, from the £600m Mersey Gateway bridge linking Runcorn and Widnes to London's mighty Crossrail, which yesterday received the green light for a second phase from north to south London.
This reminds me of when Ian Hislop was asked on Have I Got News For You what he thought of a particular novel and he reprimanded the presenter that it should have been described as a "collection of words" not a book. A list is not a plan.
However, this list does illustrate Mr Osborne's increasingly firm belief that the dawn of a new Victorian era of great engineering feats will cement his economic legacy and create long-lasting physical manifestations of his daring ideas.
Maybe there will be more detail today on turning the list into a genuine plan of action but, given how the Government fundamentally failed to reform the Private Finance Initiative with 'PF2' last year, this must be doubtful at best.
The other plank of Osbornism, stripping down Government, naturally involves bringing private sector nous into Whitehall to drive down costs. Even reform of civil service pay is an attempt to introduce a structure that is more similar to that found in commercial organisations.
Outsourcing en masse has long been inevitable: before it was gobbled up by Babcock International in 2010, VT Group, under the astute leadership of its then-chief executive, Paul Lester, was purposely moving into a position that would see it win work that the Government could no longer afford to do in-house.
However, the ambition of the Coalition is absolutely breathtaking. Officials at the Pentagon are, I am told by sources in Washington DC, shocked that the Ministry of Defence is willing to outsource the Bristol-based agency that buys warships and missiles.
A previously announced 1 per cent boost to that £14bn equipment and support budget was confirmed in the CSR, but that doesn't take away from the point that Government wants to buy weapons and essential kit far more cheaply. Consortiums are currently being formed to bid for this lucrative contract – and all of them seem certain to be led by US engineering consultants.
Think about the political gamble here: the Defence Secretary, Philip Hammond, and Mr Osborne are willing to let one of the most sensitive aspects of national security be run by business, most likely overseas behemoths. This is extraordinary – even more so if this unparalleled, globally unproven idea actually works.
Although the Chancellor has not been so public in trumpeting just how unique his ideas are in the way of the Iron Lady, Osbornism is the boldest economic programme put before this country since the 1980s.
There is no doubt Mr Osborne has dared to be great. The problem is he might not be right.
- More about:
- George Osborne
- South London