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Two-jobs Osborne suffering credibility deficit

Posted on 28 October 2009 | 9:10am

The Financial Times had an interesting editorial yesterday, on shadow chancellor George Osborne’s attempt to ally himself with the public anger over bankers’ bonuses. At the heart of the article was a question that is asked widely in political and business circles – whether Osborne can be both shadow chancellor, seeking to show he has a grasp of serious economic issues at a time of global recession, and election co-ordinator, a job in which the pressures can sometimes be to act in the short-term interest of an ever shortening media cycle, rather than in the interests of serious policy.

I have made my own contribution to that debate, with this letter in the paper today.

‘If you have a strategic weakness, it seems odd to act systematically to exacerbate it. Yet that appears to be the approach of George Osborne, the shadow chancellor.

His weakness is a shortage of credibility among serious economic opinion, not to be confused with media opinion, which went strangely overboard in praise of his speech to the Tory Party conference, or public opinion, which polling would suggest has a mixed but generally negative view of him.

One of the reasons for his strategic weakness is the sense that he is more interested in short-term political tactics than he is in long-term economic policy, a problem the effect of which is exaggerated by his dual role as shadow chancellor and general election campaign co-ordinator. His initiative on curbing bankers’ bonuses, which fell apart on minimal scrutiny, is but the latest to draw fire from City and business leaders.  It was attacked not for being tough, but because it was not thought through.

He suffered a similar credibility hit a few weeks ago when brandishing documents he claimed to have been leaked, which in truth had been published at the time of the last Budget. The media mini-frenzy was a short-term tactical gain at the expense of strategic credibility. Likewise the constantly changing figures on savings from his welfare reform proposals do little to enhance his standing.

All these mistakes reveal a trend, which will become a problem during the heat of a campaign, when his Party’s positions on the handling of the economic crisis may come under greater scrutiny than they did at the time.

Conservatives point out that Gordon Brown also performed a significant election role alongside his duties as shadow chancellor from 1994-97, and again as chancellor in 2001 and 2005. But as I know from sometimes bitter experience as Tony Blair’s press secretary and campaign strategist, Mr Brown was often reluctant to engage in anything which he felt put at risk core credibility on the economy.

In appointing Mr Osborne to both positions, David Cameron perhaps reveals his own weakness in failing to differentiate between strategy and tactics. It might be sensible for the Conservative leader to relieve Mr Osborne of one of his two posts. I sense that the City would like it to be the shadow chancellorship. The Labour Party will be hoping that’s the one he keeps.

Alastair Campbell, London NW3′

Thanks to the FT for publishing it. Worth adding here that perhaps the biggest hit on Osborne’s credibility stems from his misjudgements when the global economic crisis first erupted. In opposing a fiscal stimulus, he and Cameron set themselves apart not just from the government, the CBI and the IoD but from every other major economy in the world.

The impact on jobs would have been catastrophic, and a reminder of the last Tory recession. The costs of additional unemployment benefits could well have dwarfed the cost of the stimulus he opposed. The construction sector, challenged enough as it is, would  have been hit even harder as housing plans were abandoned and capital projects delayed. The automotive industry would have been similarly battered, with no car scrappage scheme to sustain the 750,000 jobs that indirectly that depend on it.

Oh, and he would have allowed Northern Rock and Bradford and Bingley to go to the wall.

These were big calls, and deserve to be much more central to the political debate than they currently are, which is why the FT was right to make the point it made yesterday.

  • vj

    Hmmmm Alistair Campbell questioning someone’s credibility. Stones, glass houses, pots kettles, just some of the many things that spring to mind

  • Mike

    Well coordinated attack with Maguire in today’s Mirror! (The rumored pre election tactics for Labour are true then) I can see the logic behind it but doubt it will play big with the public until and unless you address the “Elephant in Room” issue i.e. Brown is just unelectable. No one is listening him to him. The public have made up their mind which is continually reinforced by a mischievous “Media Cabal” that has also lost respect for him. Change him in January and a hung parliament in April/May is a realistic possibility. Until then the Left’s attacks on Osborne et al will just not resonate with the voters

  • Charles Sheldon

    I think it is perfectly possible to do both jobs. However, I do think you are right in expressing some surprise and disappointment that so little attention has been paid to some of the pronouncements made by Mr Osborne and Mr Cameron at the time the crisis first blew up. While I understand that part of the job of the Opposition is to make life difficult for the government, at a time of crisis surely there needs to be at least some understanding of its global nature. I heard nothing from the Tory leader or the Shadow Chancellor that suggested they had even thought about the roots of the problem. All they cared about was trying to make a difficult wicket for Brown and Darling even harder to play on. I actually think Darling has done pretty well in credibility terms which considering the year he has had is an achievement of sorts

  • Pauline H

    Reading your blog while listening to Tony Blair’s chances of the Europe job being discussed in Radio 5 phone in. They just had a Tory MP on saying there would definitely be a referendum on the Lisbon Treaty if Cameron wins. But CAmeron says something different. Very funny piece on Cameron’s personal photographer in The Times by the way. I thought you were joking when you said he had hired one. Apparently he spent all yesterday’s press conference (where CAmeron’s jealousy of Blair was all too apparent) taking pictures of Cameron’s bum!

  • James Matthews

    Ditto to VJ’s comment.

  • Simon

    Why not follow your letter up with one to the BNP paper about George changing his name? Your happy to mention it in your blog after all.

  • Simon Gittins

    ‘….a grasp of serious economic issues at a time of global recession’

    Small point, it would probably be wrong to still use the description ‘global recession’ as most have now moved back into postive growth. We of course, with Laurel and Hardy at rhe economic helm, are still chucking huge sums of money at the problem as we head towards bankruptcy.

  • olli issakainen

    The Tories opposed both the fiscal stimulus and the bank nationalisations, which were essential things to do. So do we need more evidence to show that the Tories are incompetent on the economy and can´t be trusted to govern Britain.

  • G Max

    The Blair Europe situation is showing more bad judgement from Cameron Hague etc. Think it through for a minute … they are backing a federalist Luxemburger over a Brit who could command real clout in the job. Odd people. Be afraid. Be very afraid!!!

  • Robert Wallis


    We met at the recent U.S. Democrats Abroad event in Westminster. I was the person in the Q&A who asked, in light of all the accusations still being hurled at Tony Blair over the Iraq War, and the latest investigation into its origins, whether you felt any guilt over your own role in the use of false intelligence to start the war. In a follow up, I also asked why the government didn’t want Hans Blix to finish his work before rushing into war.

    You answered that you felt no guilt, that the invasion was based on the intelligence available at the time, that, in hindsight, you still thought it was the right thing to do, and that the government thought Hans Blix was not a neutral investigator because he was trying to build a case against military action. It turned out of course that there was no case for military action, based on the reasons given, which would have been determined if Blix was allowed to complete his work. You then made the interesting admission that, once the war started, it was no longer a question of WMDs, but regime change, even though regime change was not the official (or a legal) justification for going to war. The other part of my question that evening was about the current situation in Afghanistan. You didn’t respond to this and to whether you thought the diversion of the “Coalition’s” resources to invade Iraq, rather than committing them to the long-term rebuilding of Afghanistan, was also the right thing to do, in light of the Taliban’s resurgence and the rapidly deteriorating situation today in both Afghanistan and Pakistan. I would still like a reply on this.

    However, the main reason I am mailing is that I have just seen a new feature film, called WMD, which is a retelling of the “intelligence failures” prior to the start of the war. The film’s central thesis is that both MI6 and the CIA knew months before the start of the war that all three of the stated causus belli- (a continuing Iraqi biological weapons program, the Niger uranium claims, and the 45 minutes claims) were false, but that their attempts to push this knowledge up the chain of command to Downing Street and the White House were either blocked or ignored because a decision to go to war had already been made, no matter what Hans Blix or others revealed about the true nature of the threat posed by Iraq. I’d like to hear your comments on this, on what the government really knew before going to war (since you were in the pre-war intelligence meetings), and on your role in spinning the intelligence before it was released to the public. I realise that Paxman, Snow, and others have never pinned you down on this but perhaps, with the passage of time, you are now willing to talk more freely?

    R Wallis

  • Helene Gibson

    The media – run by the rich for the rich – are trying to make everyone put to one side the class issues. But they are central to the coming election. Cameron and Osborne have no interest in or connection with the majority of people. They want their votes and so pretend to have changed and pretend to have understood the economy. they have not changed fromn the old tory party and they do not understand the economy.

    I also agree it is odd Oaborne changed his name from Gideon to George

  • Judith Haire

    I’ve still got indigestion after hearing on the Jeremy Vince Show this lunchtime that a certain Tory MP’s wife earns £40k per year running the constituency office.

  • Margaret Young

    Spot on as usual Alastair. Is it any wonder that the City and the electorate don’t have any confidence in this inept Shadowy Chancer. The heir to an overpriced wallpaper empire by the name of Gideon. A Tory twit in other words!

  • Simon Gittins

    Germany, France, Japan, USA, Canada, Italy…… all out of recession. Who’s left ?, the UK under Gormless Gordon.
    Roll on May 2010 !!

  • Simon Newton


    Look forward to your response to Robert Wallis important questions.

    Why no comment so far on the Labour MoD’s ‘systemic failure’ causing the deaths of 14 servicemen on the Nimrod in 2006? A bit more important than your judgement of Osborne’s strategic nous…

  • Amber

    Because the current Labour government has so much credibility left, hmm? “We’re leading the world on economic issues” or words to that effect (or “we’ve saved the world”) and yet we’re not out of recession when most other countries are.

    Also, your Northern Rock assertion is clearly wrong as the Conservatives have mentioned time and again. Old point, still factually inaccurate (there’s a surprise!).