The Sketch: Luck, judgement and old-fashioned politics

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Why Danny? After David Laws we needed another Liberal as Chief Secretary and for reasons which no one has established we got Danny Alexander. Maybe his function is dinner. Maybe he's the fellow you take on the long escape march because you need something to eat halfway across the wilderness.

Now, it's not just office that has worked its magic on George. Though certainly it's given him more ease and given his nastiness an attractive amiability. When Dennis Skinner stood up in all his majesty and demanded the Royal Family not get a penny of the £7m increase promised them, Osborne treated him with the most casual cruelty.

He said that if Skinner wanted to contribute "he might consider the advantages of early retirement". The smallest prick can create the most excitement – a lot of it is in the timing. The Derbyshire septuagenarian lost two fuses, he wouldn't sit down, tried to make a point of order but couldn't think of one, he pointed, he stepped forward in a pit-village way ready to deck the Chancellor. But Osborne came back with, "Take a pension", and Skinner's hair went from ivory white to Arctic white. He had never been spoken to like that in all his 78 years!

He sat there brushing underneath his nose in coke-snuffling gestures snarling: "How many lines did you take today?"

But the Chancellor is beyond the reach of these low remarks. When he says "fiscal consolidation" he doesn't sound like a clever sixth-former any more.

Thus, when David Winnick gave him an Old Testament blast about the pain felt by "our people" and the damage inflicted by Mrs Thatcher, he replied neatly, "If Mrs Thatcher was so awful, why is it that the first thing Labour prime ministers do is invite her to Downing Street?" Laughter, quite a bit from Winnick himself.

Mr Osborne – as he might have to be called – has had a transfusion of confidence from another source. Two years ago he called the deficit as the big theme and no one in the community of international acronyms agreed with him. As time has moved on, all the acronyms agree with him. He was ahead of opinion and now opinion has caught up he finds himself in just the right place. It's luck, it's judgement, it's politics.

His strongest proposition is the simplest: we have to live within our means. And so is Alistair Darling's: double-dipping back into recession. It's a matter of taste. Any number of eminent economists will support either view – but they are all talking ultra vires.

The best intervention came from a new Tory below the gangway. He hasn't been here long enough to have a name but he said in a bold voice to Alistair Darling: "You had to borrow during the recession but why borrow during the boom!" That's a very fruitful line of questioning. Labour borrowing started in August 2002 – exactly when Gordon Brown calculated he'd inherit the premiership.

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