Inside Westminster: Osborne’s Budget has delighted his party – but also opened a gap in the market for Labour

The Chancellor offered little that would appeal to the young


The cheers, plaudits and smiles from Conservative MPs were genuine when George Osborne paid two visits to the Commons tea room after his Budget. The Chancellor can tell the difference between routine praise out of politeness and the real thing; this was authentic.

Tory MPs judged it a serious Budget for serious times. They liked the unexpected reforms of pensions and savings, believing that “flashy” pre-election gimmicks would have contradicted his central “job not done” message on the deficit.

Mr Osborne has given Tory backbenchers a sense of hope.  After patting the Chancellor on the back, one senior MP told me: “We are still in the game. Not many of us think we can win an overall majority, but we could be the largest party and hold on to power.”

This matters. If the Tories thought they were doomed to defeat in May next year, they would become an unmanageable rabble. Instead, Tory MPs in marginal seats are telling more senior serial rebels, who hate David Cameron, to behave themselves. Even if, as expected, the Tories come a humiliating third in the European Parliament elections this May, Mr Cameron is confident that few if any of his MPs will call for his head. Loyalty is still the Conservative Party’s secret weapon when a general election looms.

In Whitehall the atmosphere is similar. As the Treasury prepared for the Budget, there was not the fin de siècle mood felt before the 1997 and 2010 elections, when a change of government looked inevitable. Officials there would not be surprised if Mr Osborne is still their boss after next year’s election. What does this tell us? That lots of people in the Westminster village don’t believe that Labour’s opinion poll lead would survive an election campaign because the party lacks economic credibility.

The Chancellor will be delighted with the positive headlines he won this week. He is lucky that the Conservative-supporting newspapers give him the benefit of the doubt. He gets away with “spend now, find cuts later” measures for which a Labour chancellor would be crucified in the media. The Institute for Fiscal Studies criticised such “bad habits” in its post-match analysis. It suspects taxes will rise after the election, whoever is in power, but Mr Osborne is never going to admit that.

Pensions and savings will not be critical election issues but Conservative strategists draw a new dividing line in which they “trust the people” with their own money (and to decide Britain’s future in Europe) while Labour believes the nanny state always knows best.

Labour’s reaction to the Budget looked uncertain. The pensions and savings measures meant less focus on the “cost of living” territory on which Ed Miliband has firmly planted his tent. With earnings forecast to rise by more than prices this year, some Labour MPs are worried that their party has put all its eggs in one basket. But the Labour leader remains convinced that it is the one that matters most in  the real world. He is gambling on voters having long memories, as any rise in wages before the election will not even come  close to making up for the years in which they fell behind.

Some very senior Labour figures believe Mr Cameron would have called a general election this spring, four years after the last one, if the Coalition had not tied itself to a five-year term by legislating for fixed-term parliaments. Certainly the media would now be awash with predictions of a 2014 election if we didn’t know it would be in May 2015. “Cameron and Osborne might just get the benefit of doubt in an election now,” said one Miliband ally. “But if there is  no feelgood factor by 2015, people will realise that the recovery is not for all, only those at the top.”

Team Miliband draws different dividing lines. Labour will be for the future, the Tories for the past. Labour for the many, the Tories the few.

All very well. But some Labour MPs are rightly concerned that Mr Miliband slips too easily into class-war rhetoric that belongs to another era and will leave many aspirational voters thinking that Labour is not for them. Mr Miliband made his default “Tory toff” speech when responding to the Budget. He had expected  a “rabbit” on the cost of living or the 40p tax band and was unsure how to react to the pensions revolution. “It was a grey, old rabbit,” quipped one Labour adviser. “The Budget was all about protecting the Tories from Ukip.” But Mr Miliband shouldn’t make a habit of  trying to revive the class war. It is over. Doing so would only fuel suspicions that Labour is pursuing a “core vote” strategy aimed at sneaking over the finishing line with 35 or 36 per cent of the vote, rather than seeking a real mandate for the reforms to the post-Thatcher economic settlement Mr Miliband wants.

One way for Mr Miliband to get over the 40 per cent mark would be to inspire young people. They are not tempted by Ukip and, by appealing to the “grey vote”, Mr Osborne left a surprisingly big gap in the market for a party that could capture the imagination of young people …and, crucially, persuade them to vote next year. Over to you, Mr Miliband.

Stop Boris? How about Stop Ed?

I’m told that David Cameron is bemused by the jockeying for position in the future Conservative Party leadership stakes. It is hardly a sign of confidence about next year’s general election.

Dave has told Michael (Gove) to stop trying to “stop Boris” (Johnson) so that Boris doesn’t “stop George” (Osborne) getting the top job. But some Tories suspect that Michael is putting himself about because, although he doesn’t want to be leader, he might one day be the only one who can “stop Theresa” (May). She also wants to be the one to  “stop Boris.”

Sensible Tories know they should shut up but they can’t help themselves. Jackie Doyle-Price, the  MP for Thurrock, wrote on the ConservativeHome website: “Our commentariat is talking about Boris. We need to stop talking about ourselves and talk about the things that really matter to people. Otherwise we will be seen as out of touch, and Labour’s message will resonate.” She was, of course, talking about the Tories, too.

Perhaps they should all calm down, take a cold shower and  then think about how they will  “stop Ed.”

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