The chancellor is comfortable encroaching on Labour territory, says Conor Pope

How many Labour hearts sank at the words ‘national living wage’ in George Osborne’s recent budget? Never mind the economic connotations of the policy; the political ones are brutal for the left. It was so obviously the big moment of the speech, and the chancellor having to repeat the phrase over the raucous noise of the backbenchers drove home what a victory for the Conservatives it was.

It was an announcement years in the planning: Osborne and David Cameron privately agreed that it would be the centrepiece of a solo Tory budget long ago. But it was not the only policy on show that had been prepared years in advance. The inheritance tax cut looks remarkably similar to the one first proposed by Osborne in his 2007 conference speech. In retrospect, some, Osborne included, herald that surprise policy as the catalyst that sparked a revival in the party’s fortunes, and spooked Gordon Brown out of calling ‘the election that never was’.

It is this evidence of Osborne’s long-term vision that should give Labour cause for concern. He may well have already written the 2020 Queen’s speech, and could spend the next five years doing all he can to ensure it is delivered. Given his track record, there might not be a great deal anyone can do to stop him.

Getting one step ahead of his opponents is something he excels in, the living wage being only the latest example. Managing to get public opinion behind an impossibly quick deficit reduction strategy took skill, but also showed a deft understanding of how Labour would deal with it. In power, he was able to gradually slow the rate of cuts to something that now resembles Alistair Darling’s original plan, knowing that Labour would never dare outflank him from the right.

The chancellor looks perfectly comfortable in his semi-regular encroachments onto Labour territory. The ‘emergency budget’ speech was peppered with references to ‘One Nation’ and lifted the ‘non dom’ policy almost wholesale, cruelly twisting the knife on Ed Miliband’s defeat. His high-profile championing of the Northern Powerhouse idea was an obvious grounding for reaching out to Labour heartlands – a realisation that, in an age of decreasing political affiliation, the idea of ‘no-go areas’ is outdated.

What else would an Osborne-led Conservative party do to coax in Labour supporters? Immigration seems an obvious area. He is considered one of the most pro-immigration voices in the cabinet, and as Labour’s lurch towards a harder line on the issue appears endless, the devastation that could be wreaked on the party’s domination of cities by the Tories stealing a march on immigration could be fatal. It would be a risky strategy if the United Kingdom Independence party still appears to be a credible threat, but a pro-business argument in favour of immigration could potentially pay off, and leave Labour foundering.

That is not to say that it definitely would work – and Osborne’s political radar is certainly not perfect. It is difficult to think of a Brown budget that was received as poorly as the ‘omnishambles budget’ of 2012, and the hostile reception that Osborne received at the Paralympic Games the following summer shows that he does not naturally have the Teflon characteristics of some of his party rivals.

There is also the fact that he too often appears to be strategist first, economist second, which can be a shortcoming for a chancellor of the exchequer. The Northern Powerhouse, for example, was a much better act of positioning to hurt Labour than it was an effective plan for improving a still-faltering northern economy.

The fact that he would, in essence, be a continuity Cameron candidate could harm him. No one ever wants to be the continuity candidate if they are not the ‘real deal’, and there are plenty of reasons to believe the government, and Cameron in particular, will be deeply unpopular by 2020. Ten years is just about as long as any prime minister ever gets, and it may well be that the Tories elect to pursue another ‘keep on the road of recovery’ tactic for the next election just as the weight of public opinion shifts to a desire for change.

The areas in which Osborne and Cameron differ are largely public perception: Osborne is seen as smarmier, less likeable and not as at ease chatting to members of the public. It would not be a stretch, either, for Labour to paint him as suffering from the same ‘Flashman’ outbursts as the prime minister. His scathing Commons putdowns occasionally cross the line, his misjudged jibe about Bennites made across the dispatch box to Hilary Benn at a recent PMQs being a case in point.

Despite that, he has managed to acquire a certain gravitas. It may be shallow, but his recent makeover and fitness regime do deliver an air of statesmanship that he was previously lacking. When it comes down to the nebulous question of, ‘Do they seem like a prime minister?’, which Miliband struggled with so much, he must surely rate well against the Tories’ other options. How he will rate against the Labour leader is hard to tell, but, given the result in May, it is a measure that should not be underestimated.

His image problem is something he has worked hard at, and not just with the haircut, workout programme and anti-elocution lessons: the now-common sight of him in a hardhat is no accident. That he is not immune to unpopularity is not what makes him a weak opponent; that he has managed to largely overcome it is what makes him a strong one.

The stiff competition to replace Cameron should also work to Osborne’s favour. With Boris Johnson so obviously hoping for the ball to come loose out of the back of the scrum, Osborne has avoided being the clear next in line, a sentiment that played a part in the downfalls of Brown, David Miliband and David Davis. While Johnson becomes increasingly restless and unsubtle in his desire to become Conservative leader, the chancellor could manage to position himself as the unlikely insurgency candidate, which is often a very good place to be.

At 44, he is younger than three of this summer’s candidates for Labour leader (Liz Kendall is 19 days his junior) and more experienced than all of them. That is a combination that should strike fear into the heart of those who want a progressive government. If it does not, then consider this: shortly before the 2020 election, the man who has masterminded a strategy that has kept Labour out of power for a decade could walk into No 10 as prime minister for the first time.

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Conor Pope is a staff writer at LabourList

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