Will George Osborne be the next Chancellor of the Exchequer?

With all the talk swirling around George Osborne’s ‘breach of convention’ by commenting on the sharp decline of the pound against the dollar and euro, and what appears to be a co-ordinated campaign led by the Telegraph newspaper to see him moved, I decided to check Betfair’s ‘Next Chancellor market’.

George Osborne is still the favourite if you consider the last traded price (3.8 for Osborne, 5.1 for Ed Balls), which is the only reasonable comparison in such an illiquid market. What struck me as interesting about the tissue available is that other than Vince Cable, Osborne is one of only two non-Labour MPs on the list. The other is former Chancellor Kenneth Clarke.

I haven’t been overly convinced by Osborne’s economic prowess since the worst ravishes of the Credit Crunch and impending recession came to light. I am not alone in thinking that Vince Cable has appeared more authoritative in opposing the Government, and do not necessarily think that George Osborne’s talents are necessarily suited to this Office of State should the Conservatives win the next election as expected.

However, in spite of these reservations, and my concern that he is the wrong public face for the Conservatives to the country, he is clearly a clever and talented man, and for purely political reasons I think it would be disastrous for David Cameron to replace him before the next election.

I always got the impression that Osborne was given his brief as a recognition of his importance to the Party and its new image under David Cameron, rather than because of a natural aptitude for macro-economic management. Unfortunately, this job is under greater scrutiny than any other outside of government at the moment, and Osborne’s performance is making many Tory activists somewhat nervous.

The fact is that moving Osborne would almost certainly be seen as a demotion – even a job-swap with William Hague would imply that Hague was being in to redeem the Conservative’s economic attacks on Brown, rather than that Osborne was better-suited to foreign affairs than the former leader. Furthermore, I think to ‘demote’ Osborne (by which I mean moving him in any way) would give great succour to the Labour benches, who would attribute this great scalp to the return of their own Prince of Darkness.

I don’t think Osborne is the obvious choice for Chancellor of the Exchequer, or even Shadow Chancellor of the Exchequer, but to move him would smack of panic, or at least retreat in the face of Lord Mandelson’s return.

In responding to David Davis’ departure and the appointment of Dominic Grieve to Shadow Home Secretary, Cameron indicated that his Shadow Cabinet was ‘permanent’ – this settlement has survived Nannygate and a Cabinet re-shuffle. Any move of such a senior character will be seen as a surrender in the face of pressure, and I think that would undermine David Cameron’s message more seriously than any insubstantial faux pas that the Shadow Chancellor may or may not have made.

Mr Cameron may wish to reconsider who he will appoint once he reaches Number 10, but for purely political reasons, I think moving Osborne now would be a huge mistake.

Morus