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Headline:

George Osborne bounces back to find a path out of the economic woods

Synopsis:

Britain is heading for a “collapse of sterling” if Gordon Brown persists with trying to borrow his way out of trouble, George Osborne says in an interview with The Times today.

Risking accusations that he is talking down the pound, the Shadow Chancellor mounts a ferocious attack on the Prime Minister, accusing him of following a deliberate “scorched-earth policy” that would leave the economy in a mess for the Tories to inherit.

Mr Osborne, ignoring the convention that senior politicians do not predict runs on the pound, says that the country knows instinctively that no government can borrow its way out of debt. He claims that the weight of debt will stifle recovery and also create a big risk for sterling.

“Sterling has devalued rapidly against the euro and the dollar. We are in danger, if the Government is not careful, of having a proper sterling collapse, a run on the pound. The danger of a run on the pound . . . is that it pushes up long-term interest rates, which is a huge burden on the economy. The more you borrow as a government the more you have to sell that debt and the less attractive your currency seems.”



THE INTERVIEW:

In the Conservative Party’s Hundred Acre Wood, George Osborne has always been Tigger to David Cameron’s Christopher Robin. The Shadow Chancellor is a natural optimist, bouncing back enthusiastically after every setback.

As an aide, he used to cheer up John Major and William Hague in the bleakest times. A year ago he delighted his party by bouncing Gordon Brown out of holding an election. Not only was he the Conservative leader’s best friend, he was his closest political ally, the joint architect of the strategy for modernising the Tory party.

But in the past few weeks he has had his tail between his legs. The backbench Eeyores have begun moaning that it’s all going horribly wrong. The media bees have started to sting. There has been speculation that he might be left in the nursery.

His misjudgment over a yacht in Corfu has, critics say, been compounded by his inability to give a clear alternative to Mr Brown on the economy. His confidence seems to have been shaken. As his ebullience has deflated, so has the Tories’ poll lead.

Mr Osborne admits that it has been a tough few weeks. He will not, he tells us, be going back to Corfu next summer. “I regretted the whole farrago. I made a mistake — not because I broke any law or rule, I never asked for a donation, nor did I receive one — but it didn’t look good.”

He is determined to win back those in the party who have questioned his political acumen. “My door is completely open to anyone who wants to talk to me,” he says.

Publish date:

15 November 2008

Author:

Alice Thomson and Rachel Sylvester

Source:

The Times

Media:

Access Interview