11 March 2005
The shadow chief secretary to the Treasury is unafraid to speak of huge Whitehall cuts in his plan for better public services. Joseph McHugh heard his battle strategy
George Osborne leans forward in his chair and declares earnestly: 'We set David James a very important remit right at the beginning, which was that we do not want to see any damage to frontline public services. We do not want to see schools shutting, hospitals shutting or police officers being taken off the streets.'
He might sound like a New Labour MP from central casting, but in fact the 33-year-old is the Conservative member for Cheshire's leafy Tatton constituency and shadow chief secretary to the Treasury.
Osborne, along with fellow frontbencher David Cameron, is the poster boy for the party's hoped-for electoral revival. The pair are at the forefront of a group of young, metropolitan types, dubbed the Notting Hill set, who are credited with coaxing Conservative thinking in a new direction.
The history of the Conservative Party, of course, tells us that golden boys tend to lose their glint, but if his is a Herculean task, then Osborne bears his labours lightly.
The party faithful are converging in Brighton for the Conservative Spring Forum on March 11 and 12, in advance of the widely anticipated general election on May 5. They have grounds for optimism, with one poll putting them just two percentage points behind Labour.
No need to disinter the Veuve Clicquot from the Central Office wine cellar just yet, but the ratings should be enough to get activists out on the stump during the imminent election campaign.
Cutting Labour waste is sure to figure prominently in the script. Public expenditure has been placed under the microscope by David James, the business trouble-shooter asked by leader Michael Howard to comb Whitehall for waste and inefficiency. He and his team of 60 identified savings of £35bn a year by 2007/08. These would be delivered via a cull of 168 quangos and 235,000 civil service posts, the abolition of the New Deal programmes and the proposed supreme court, and freezes or cuts to 'non-priority' spending such as agriculture.
Of the £35bn saved, £23bn would be redirected to 'priority' frontline services, £8bn would be used to reduce government borrowing and £4bn would fund tax cuts.
In Osborne's decidedly cramped Palace of Westminster office shared with three other MPs – 'It's okay, they're Conservatives' – he expands on the James conclusions.
'Our spending plans focus on our priority areas but they do cut back on other departments. The Department of Trade and Industry will lose four-fifths of its staff, the Department for Environment, Food and Rural Affairs and the Department for Culture, Media and Sport will have smaller budgets, and we're unapologetic about that,' he says. 'We think the taxpayers want their money focused on the public services that matter to them.'
Those that matter, according to the Tories, are health, education, law and order, transport, and international development. Osborne vows that all savings achieved in these areas will be retained by the relevant department and ploughed back into services.
Predictably, Labour has responded by accusing the Tories of planning £35bn of cuts to public services. 'Rubbish!' says Osborne, and somewhat puzzling in view of the government's own plans, drawn up by Sir Peter Gershon, for £21.5bn of annual efficiency savings.
Osborne claims triumphantly that Labour's attacks 'have not stuck' and in truth he is right. The Institute for Fiscal Studies, respected arbiter of all matters economic, has proclaimed that the Conservatives' proposals add up.
Gershon claimed recently that his review skirted the limits of the savings possible before frontline services began to suffer, and questioned the James recommendations. But the ebullient shadow minister says there is an important distinction between the two waste hunts that allowed James to be more ambitious.
'Peter Gershon was not able to make recommendations on reductions in government activities that would require legislation – that was outside his remit.
'David James was, and much of what he recommends is stopping government from doing things that it does at the moment. Most of the Gershon savings are just about getting more efficiency out of existing resources.'
A brief look at Osborne's career trajectory illustrates his interest in developing the conceptual and philosophical frameworks that underpin party policy.
St Paul's School in London was followed by a degree in modern history at Magdalen College, Oxford. After a brief 'inglorious spell' as a journalist, Osborne joined the Conservative research department in 1994 and soon moved to be a special adviser at the Ministry of Agriculture, Fisheries and Food.
He worked for John Major in Downing Street in the run-up to the 1997 election and, post-defeat, as William Hague's speechwriter and political secretary. Osborne won Tatton, Neil Hamilton's old seat, in 2001 and progressed through the shadow ministerial ranks before becoming shadow chief secretary last September.
Now he has to combine his frontbench and constituency responsibilities with being a father to son Luke, three and a half, and daughter Liberty, one and a half. He and his author wife Frances, daughter of Lord David Howell, energy secretary in Margaret Thatcher's 1979 Cabinet, enjoy walking and holidaying in the little spare time they have.
'You can be debating things in Parliament and appearing on television with Jeremy Paxman, but if you begin the day changing the nappy and end it reading children's stories, it certainly helps to keep you sane.'
It also means Osborne has a personal interest in the health and education systems. Under Conservative plans, new service providers would be encouraged to open for business and funding would follow hospital patients and school pupils.
Parents would get a voucher for the cost of their child's education, which they could spend with a range of providers – although 'they can't take it to Eton or Winchester to top up the school fees'.
Patients would get 60% of the cost of their operation to the NHS, which they could spend anywhere.
At the same time, powers wielded by Whitehall would be handed to local institutions and Labour's targets regime swept away. He uses the MRSA superbug to illustrate his point. Hospitals cannot shut infected wards because Labour's obsession with targets means they must stay open to meet clinical demand. Under Conservative plans, Osborne says, there would be a 'natural incentive' for hospitals to deal with infected wards because, otherwise, patients would take their funding to a clean hospital.
He emphatically rejects the suggestion that patient and pupil passports will lead to a two-tier system. 'The numbers of people using private health insurance and private education has increased under this government,' he says. 'Under our proposals, we would allow people to get the kind of services that at the moment only money can buy.'
Osborne loyally declares that the Conservatives will win the election and says he has spent a lot of time thinking through what he will do when ensconced in the Treasury. But if the Conservatives are to regain power, they will need to listen to Osborne's analysis of the problem.
'What we need to do in this election is show that, actually, Tony Blair and the Labour government don't have any answers to the problems the country faces,' he says. 'We have to show that we're a party that is interested in the future, not in the past.'