George Osborne is being warned by close political allies that he will need to rebuild his reputation with Tory MPs after watching his second budget in a row run into trouble.
Friends and allies, who stood by the chancellor during repeated mishaps in the last parliament, said in private that Osborne has been damaged by the resignation of Iain Duncan Smith over planned cuts to disability benefits.
In a devastating resignation letter, Duncan Smith said the cuts were “not defensible” in a budget that had benefited higher rate taxpayers.
The suggestion by Duncan Smith that the chancellor is failing to act as a one nation Conservative, by apparently showing little interest in non-Tory voters, has raised concerns about Osborne’s political touch. Allies also fear that Downing Street’s aggressive tactics on the EU referendum are alienating many Tory MPs.
The unease among usually loyal MPs will be highlighted in the House of Commons on Tuesday when Chloe Smith, the former Treasury minister, voices support for Duncan Smith. Speaking on the last day of the traditional post-budget debate, where Osborne will take the rare step for a chancellor of summing up for the government, Smith will agree with Duncan Smith that the cuts to personal independent payments should not have been included in the budget.
Smith, who won sympathy when she was made to defend the “omnishambles” budget on Newsnight as a junior Treasury minister in 2012, told the Eastern Daily Press: “I don’t think it [personal independence payments] was the right measure to include in the budget, that is what I will be saying in my speech tomorrow.”
She added: “You have to be able to stand back and look at the bigger picture and balance the books and be confident that you are both delivering the promises you made, whilst being as fair as possible. The manifesto I stood on made clear we would spend less on welfare, but do so by protecting the most vulnerable.”
Allies say that Osborne, who takes great pride in his reputation as the government’s master strategist, is proving increasingly accident prone. In his autumn statement in November the chancellor was forced to retreat on planned cuts to tax credits outlined in his summer budget.
The chancellor is understood to be aware of the concerns and realises he is entering a difficult period. Osborne thought hard whether he should have responded to an urgent question in the Commons by the shadow chancellor, John McDonnell. In the end he decided to leave it to David Gauke, the third most senior member of his Treasury team, after deciding that it would set an unhelpful precedent for a chancellor to respond to an urgent question.
Osborne was also wary of appearing in the Commons amid concerns in the Treasury that pro-Brexit Tory MPs could have tried to ambush him. Gauke, a popular figure who is admired for a light but authoritative touch, received a relatively warm reception from Tory MPs.
Philip Davies, the pro-Brexit Tory MP for Shipley, asked the only mildly awkward question when he said that the need for cuts showed the time had come to “end the ludicrous ringfencing of the international aid budget”.
One old friend thought the chancellor had made a mistake by not appearing in the Commons. “This was his moment to show us a new George and he has missed his chance,” the friend said. “If he wants to be prime minister he should be able to turn round a moment like this.”
One ally thinks Osborne is in trouble. “This is damaging for George. He has misjudged a budget again. He has lost a lot of support. You can feel it. He will need to rebuild.”
The chancellor’s old friend believes he is experiencing a bumpy period though the minister fully expects him to bounce back. “This is not terminal for George. Things come and go. There are waves. Better to have a bout of scarlet fever now than in 2018.”
At least one part of the government operation was running smoothly. The government whips’ office, under the chief whip, Mark Harper, took the trouble to dream up 22 “planted” questions for loyal MPs to put to the new work and pensions secretary, Stephen Crabb.
A leaked copy of the “suggested questions”, outlined over two pages of A4, revealed that Tory MPs were encouraged to ask Crabb whether his “own personal life experience” shows that a “compassionate and fair welfare system” is not just about numbers. Crabb says his support for welfare reform was inspired by his mother, who was forced to flee from his violent father and relied on welfare as she returned to the workplace.
guardian.co.uk © Guardian News and Media Limited 2010