The power of George Osborne is growing by the day

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

George Osborne is making his influence felt across Westminster (Getty Images)

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.