"We supported the principle of people contributing to their higher education; on foundation hospitals we have argued for a less top-down NHS. And yet the temptation to try to defeat the Government was so enormous that we all went along - or most of us went along - with voting against those things.
"I have learnt my lesson; if you think the Government is doing the right thing, even if they are not doing it exactly the same way you would, you should support them. I don't know whether that was my greatest mistake, but it's one I have reflected on a lot."
Most politicians could point to worse mistakes, but George Osborne's career has been exceptionally gaffe-free. He has not so much climbed to the top as floated.
His personal life seems equally trouble-free. He comes from the same sort of comfortable background as David Cameron, including the wealthy parents and the public schooling. He has two children, aged two and four, and tries to set aside every weekend for them. The older child is at a state primary in London. His parents will decide later whether he will be educated privately.
Mr Osborne scarcely had time to draw breath after graduating from Magdalen College, Oxford, before being appointed head of the political section at Conservative Central office, at the age of 23. At 27, he was chief political adviser to the party leader, William Hague. He became an MP just after his 30th birthday, and was 33 when Michael Howard appointed him to shadow Gordon Brown. Even David Cameron's rise was not that fast.
So was there a "Granita" moment, when he reluctantly agreed to stand aside and let his friend run as the leader of the Tory modernisers? "No is the short answer," he replied. Being a politician, though, he then spent the next few minutes embellishing. "I made my own decision not to run and I didn't tell David until after I had told a newspaper. I didn't want there to be any suggestion that we had cooked up some arrangement.
"I am delighted that David won. He was the best choice for the party. He has started to change people's conceptions of the Conservatives and, above all, he has stuck to his pledge to take the party to the centre ground."
That could be seen as a sideswipe at his former boss, William Hague, who left the centre to sing the old Tory battle hymns about Europe and immigration, but Mr Osborne insisted that nothing of the sort was intended. "Looking back on when I worked for William Hague, it's difficult to remember just how tough that period was. Of course we made mistakes, but William did a fantastic job in holding the party together.
"It's an interesting experience. I used to work for him, now I work alongside him," Mr Osborne added, in a rare, oblique reference to how fast he has risen.
His new boss, David Cameron, has promised to end "Punch and Judy" politics. Yet Mr Osborne has made a series of speeches attacking Mr Brown as a man whose thinking is "stuck in the past". Labour sees a contradiction there, but Mr Osborne sees none. "I want the debate to be at the level of policy. That is not Punch and Judy politics, that's engaging in a debate about Britain's future," he said.
But while he attacks Mr Brown for taking the path of high tax and excessive regulation, Mr Osborne is not making any promises to lower taxes. He is "sympathetic" to those who think that inheritance tax is unfair - but equally he can see a case for reducing the tax on pension funds or the council tax. This far from a general election, though, he is not promising to cut any of them. If someone objects that there's not much to choose between a Labour government led by Tony Blair, or a Tory party led by Cameron and Osborne, that does not worry him.
Mr Blair's biggest upcoming parliamentary test is the Education Bill, out tomorrow, which has attracted so much hostility from the Labour left. Mr Osborne is adamant that the Tories will not repeat the mistake he so regrets, of opposition for opposition's sake.
"The new leadership of the Conservative Party, and David Cameron, are keen to demonstrate that we are a constructive opposition. We are not just going to blithely oppose everything, just because it's produced by the Government. What we have said with this Education White Paper is it's a step in the right direction.
"It's somewhat depressing to see the Prime Minister water down the reforms in an attempt to buy off his rebels.We are saying to him, 'You will definitely carry the Education Bill because you will have the support of the Conservative Party if you stick to what you want to do'. His choice is simple - but does he have the bottle to stand up to his own party?"
That is very different from the way shadow ministers talked only a few months ago. But under Michael Howard they did not have to worry about what they would do if elected. The present Tory leadership cannot be so sure. George Osborne could be in charge of the country's finances before he is 40. Will he then have the "bottle" to stand up to right wing of his party?
* BORN: 23 May 1971
* FAMILY: Eldest son of Sir Peter Osborne, founder of Osborne and Little. Married to the writer Frances Osborne. They have two children.
* EDUCATION: St Paul's School, London. Read modern history at Magdalen College, Oxford. Dean Rusk scholar at Davidson College, North Carolina.
* CAREER: 1994 After a short spell as a freelance journalist, joined Conservative research department and became head of the political section; 1995 - 1997 Special adviser at the Ministry of Agriculture, Fisheries and Food; 1997 - 2001 Political secretary to William Hague and secretary to the Shadow Cabinet; 2001 Elected MP for Tatton, Cheshire;
2003 Shadow minister for Economic Affairs, Tory whip;
2004 Shadow Chief Secretary to the Treasury; May 2005 Re-elected as MP for Tatton and appointed shadow Chancellor.Reuse content