John Rentoul: Osborne gets his shot at redemption

Tomorrow is huge. Let there be no doubt about that. The whole of British politics for years to come hinges on what Alistair Darling says in his mini-Budget, and on what George Osborne says in reply.

No wonder, therefore, that David Cameron considered – so I am told – taking his shadow Chancellor's place and replying to the pre-Budget report himself. Traditionally, the Opposition leader replies to the Budget, but at all other times when the Chancellor addresses the House of Commons it is his shadow, like Peter Pan's, that responds. Given that tomorrow's event is more important than any full-dress Budget since it became a dignified part of the British constitution, you can see Cameron's point.

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I also understand that the Tory leader expresses frustration to his advisers that journalists notice his party only when he speaks for it. It sounds like an echo of the egotism of Tony Blair, quoted in The Hugo Young Papers, out last week: "We will win the election as long as I am the only voice that speaks for the party." But it is in fact a simple description of the presidential bias of the media.

Anyway, Cameron did not consider the switch for long. Osborne's position in the party has become so precarious since Yachtgate that he could not have humiliated him in that way. It would have invited the shadow Chancellor's enemies – those are the ones on his own side, remember – to have re-enacted the final scenes from Lord of the Flies.

Cameron and Osborne know they are in this together. Their decision to oppose tax cuts paid for by extra borrowing was a joint one and I do not detect any policy difference between them – unlike the semi-public tension between Brown and Darling over the size of tomorrow's giveaway.

So it is Osborne who faces the test of his career tomorrow. The big positions are fixed: let government borrowing rise or let it rip. But it is Osborne who has to respond in real time to whatever extra tricks Brown and Darling spring. How he does it will shape the long election campaign that starts now.

It is a fascinating contest at all levels. Both Gordon Brown and George Osborne are talked up by their admirers in similar terms, as deep-thinking strategists who are able to plan "several moves ahead". Given that a sharp divide has suddenly opened up between the two main parties, one of them is going to be proved right and one wrong. (And the Liberal Democrats will try to have it both ways.)

On the economy, no one knows which. Recent weeks have confirmed that, if you lay all the economists in the world end to end, they will all point in different directions. Although some economists are worried about inflation – especially in this country after the 25 per cent devaluation of the pound – the impression is that more economists point in Brown's general direction than Osborne's.

Robert Shapiro, an economic adviser to Barack Obama's campaign and former US under-secretary of commerce for economic affairs, was particularly helpful to the Prime Minister. When Nick Robinson, the BBC's political editor, asked him what was the risk of a big stimulus package, he said there was "no risk, there is a cost – but there is a very large risk if we choose not to do it".

The Tories only manage to point out that most economists were opposed to Margaret Thatcher's policies, which plays straight into Labour's hands by reviving memories of an "uncaring" party, prepared to say rising unemployment was a price "well worth paying".

A better response might be to say that no one knows what will happen to the global economy. It might be worth citing the Anna Karenina principle: that while periods of economic growth are all alike, every recession is different in its own way. What we are about to experience is not the same as the Slump of the 1930s; or the overheating of 1990-91; or the bursting of the dotcom bubble of 2000.

There has not been a credit crunch on this scale since the global capital market came into being after the Second World War. So we do not know how bad it will get, here or elsewhere, and the best argument against Brown is that it might be sensible to pause to see what the effects are of this month's electric shock treatment, the 1.5-point cut in interest rates, and the devaluation of the pound.

But the Prime Minister is engaged in a weird attempt to persuade us that the situation is really, really bad, because it is only as a crisis leader that he has been able to pull his party together and recover some ground in the opinion polls. Yet if things do turn seriously bad I do not see how Brown can escape a political penalty.

One Labour former cabinet minister I spoke to last week pointed out the danger in saying, "Leave it to me, Super Gordon, and it will be OK." If it is not OK in six months' time, "people will turn round and say, 'You were supposed to be making it OK.'"

It would seem that the political story is likely to turn against Brown whatever happens to the economy. Because, if the recession is not as serious as many economists fear – and the oil price last week fell below $50 (£34) a barrel – then Brown won't be able to maintain the state of alert on the economy at crisis pitch for 18 months. Then, the former minister said, the question is what happens "once he goes back to the day job". The implication being that, the moment Brown ceases to play the part of a crisis leader, he and the party will be back to the agonies of the world before Lehman Brothers went bust.

George Osborne's task tomorrow, therefore, is not only to respond within seconds to whatever surprises Brown has up Darling's sleeve, but to try to persuade us that things are not as bad as the Government says they are. Then we will find out how clever he is.

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