The power of George Osborne is growing by the day

The rise of the Chancellor as such an overwhelmingly dominant figure is new

Share

We are living through a period of tumultuous constitutional upheaval. Scotland votes next year on whether to become an independent country. The UK might leave the EU. Meanwhile a transformation almost as significant is happening in front of our eyes and receives little or no attention. It involves the role of the Chancellor of the Exchequer.

This week George Osborne puts the final touches to the Autumn Statement that he will deliver on Thursday. As he does so, David Cameron is on a trade mission in China. I do not want to downplay the importance of Cameron’s trip or suggest that while he is abroad he is cut off from other policy areas. But there is a wider symbolism in a Prime Minister being out of the country while the Chancellor makes the key moves at home. On domestic policy the influence of Chancellors is growing and has been since 1997.

It was Osborne who announced the new constraints on payday lenders last week and who outlined at the weekend how the increase in energy bills would not be as high as originally envisaged. This would not be particularly significant if the division of responsibility was a one-off that happened to coincide with the Autumn Statement. But it is part of a much wider pattern.

I cannot recall a significant speech or interview from Cameron on economic policy. He has shown very little interest in the most important policy area for any government. When Michael Howard was Tory leader he asked Cameron to be Shadow Chancellor. Cameron turned the offer down. The younger Osborne accepted without hesitation. Osborne is the single voice that defines the Coalition’s broad approach to economic policy-making, one that he summarises as fiscal conservatism and monetary activism.

His distinction between economic activity on the part of the Bank of England and, on the other hand, inactivity on the part of the Treasury, is important and points to the new role for any Chancellor. Osborne has given considerable power to the Governor of the Bank of England. In terms of decisions on the level of quantitative easing, interest rates and to some extent bank regulation, Mark Carney, and not Osborne, is the key figure. 

But while the Governor acquires more power over economic policy Osborne more than compensates by ranging across government, intervening decisively in every area - from how the Tory wing of the Coalition should deal with Miliband’s energy market policies to the overall direction of policy in welfare, NHS and the rest. He is also of course in charge of strategic planning for the next election, a role that connects him even more intimately with every decision announced on all fronts between now and 2015. He is incomparably more powerful than his long serving Tory predecessors, Nigel Lawson and Geoffrey Howe.

Osborne is not the first Chancellor to act in this way, giving away some power over economic policy-making while exerting more influence across government. The pattern began when Gordon Brown ceded power to the Bank Of England to set interest rates while becoming hyper-actively involved in every area of domestic policy.

Under Brown the Treasury acquired the formal responsibility not only to set departmental spending limits, but to secure agreement with ministers as to how the cash would be spent - the first time that the mighty department become formally connected to policy outcomes across domestic policy. Brown was also in charge of election strategy.

Like Cameron, Tony Blair showed little interest in economic policy. I do not believe it is coincidental that both Cameron and Blair sought to make their mark in foreign policy. There was more space for them abroad. The reason Blair did not sack Brown was he could not do without him. Like Osborne, Brown was the only figure at the top of his party who had given constant thought to economic policy for years.

The rise of the Chancellor as such an overwhelmingly dominant figure in domestic and strategic policy is new. Margaret Thatcher made many memorable speeches on economic policy and in the final clash between herself and Nigel Lawson over his policy of shadowing the German currency it was she who prevailed and Lawson who went. Harold Wilson knew more about economics than any of his Chancellors. John Major’s main cabinet experience before becoming Prime Minister was at the Treasury. When he was Chancellor in the 1970s, Denis Healey faced a table of cabinet ministers who were as interested in economic policy as he was and who often made scintillating speeches on the topic. Now there is a single voice that speaks for the Conservative wing of the government on the economy, and on much else besides. Osborne commands the stage this week, but in reality he does so most of the time. 

For a long time there has been a debate about whether Prime Ministers were merely the first among equals in the cabinet, or much more powerful presidential figures. With the might of the Treasury behind them, and more time on their hands now that economic power is shared with the Bank of England, it is the Chancellors who in domestic policy are becoming the first among equals.

Boris puts cycling wheels in reverse

The reaction from Boris Johnson and the police to the alarming number of cycling deaths in London has been wholly predictable in its lumbering passivity. In their different ways, both blame the cyclists. Johnson has talked of the need for cyclists not to listen to music on headphones. Senior police officers have raised the target for the number of cyclists to be penalised for minor misdemeanours. In terms of safety such miserly, mean-spirited responses will make little or no difference. Instead they will deter some from cycling.

Getting on a bike is not an attractive prospect at the moment with the bleak number of deaths combined with more police officers waiting at junctions to fine cyclists. The response to the challenge of safety reminds me of the train companies’ joyless reaction to the overcrowded rush hour journeys: “Let’s put up the fares to price some commuters off the rush hour trains”. There was no will to put on more trains as a more positive alternative. Similarly there seem to be no immediate moves to compel lorry drivers to fit satellite equipment that alerts them to nearby cyclists and little political appetite to build proper cycle lanes.

I have never thought that Boris would lead the Conservative party. I am even more certain about that after his controversial headline-grabbing speech last week. He still has the chance to go down in history as the Mayor that made London cycle-friendly but he needs to get on with it as a matter of urgency.

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Customer Service Executive

£18000 - £22000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Retail Buyer / Ecommerce Buyer

£30000 - £35000 per annum: Recruitment Genius: Working closely with the market...

Recruitment Genius: Sales Executive - CAD Software Solutions Sales

£20000 - £50000 per annum: Recruitment Genius: A reputable company, famed for ...

Ashdown Group: Client Accountant Team Manager - Reading

Negotiable: Ashdown Group: The Ashdown Group has been engaged by a highly resp...

Day In a Page

Read Next
 

Letter from the Education Editor: This shocking abuse of teachers should be taken seriously

Richard Garner
Brand loyalty: businessmen Stuart Rose (pictured with David Cameron at the Conservative conference in 2010) was among the signatories  

So, the people who always support the Tories... are supporting the Tories? Has the world gone mad?

Mark Steel
War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
Hack Circus aims to turn the rule-abiding approach of TED talks on its head

Hack Circus: Technology, art and learning

Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
Sevenoaks is split over much-delayed decision on controversial grammar school annexe

Sevenoaks split over grammar school annexe

If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

Paul Scholes column

Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
Why Michael Carrick is still proving an enigma for England

Why Carrick is still proving an enigma for England

Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

Tracey Neville is just as busy as her brothers, Gary and Phil

The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?