George Osborne has clearly aggravated Lord Mandelson. The shadow chancellor's Demos speech yesterday attempted to portray the Conservatives as true progressives, citing Disraeli, Baldwin and Butler as evidence of the Tories' liberal heritage. Indeed, he went further, citing American Democrats, Canadian Liberals and Swedish Social Democrats as parties that have restored their countries' finances. The message was clear enough: Cameron's Conservatives will be soft and cuddly and also balance the books.
It is easy to imagine why the First Secretary of State moved on so quickly from the calm induced by his sojourn in Corfu. To find the Tories claiming to be the true heirs to Blair is a step too far for Labour's master tactician and keeper of the true faith. A sentence like: 'Both Margaret Thatcher and Clement Attlee, both FDR and Ronald Reagan, took power at times of austerity and were required to steer their countries through wrenching periods of economic turbulence' bears all the hallmarks of a carefully thought-through attempt to jolt Labour into a mid-summer response. In this, it has been successful this morning.
Osborne claimed the Conservatives would improve productivity as a result, in effect, of the health and education policies they have already announced. Choice in the NHS and schools will deliver efficiencies, he argued. And they might, of course. Lord Mandelson has replied today by mocking Mr Osborne and counter-claiming that Tory policies would have a 'crippling cost in human potential and long term growth'. Clearly the bad blood between the two last year has not gone away.
In truth, neither party has yet been particularly clear about how their spending plans for the years beyond 2010 would be set so as to bring the UK's public finances back into line. If the NHS, international development and possibly other services are to be protected, other provision will inevitably have to be cut disproportionately. A real increase in spending of more than 0.5% per year after 2010 would be a miracle. Both Osborne and Mandelson must know this but neither can bring themselves to say so. Thus they continue to squabble.
