Tom Richmond: Is George Osborne's credibility holed below the waterline?

THE late Denis Healey, one of the giants of post-war politics, had a simple maxim when in difficulty. The former Chancellor called it 'the first law of holes'. 'When you're in one, stop digging,' he advised.

George Osborne needs to start digging his way outouf trouble, argues Tom Richmond.

It is a timeless rule which is equally applicable to George Osborne as the current Chancellor’s political and economic record comes under scrutiny following a Budget which seeks to put the “next generation” first.

Yet, perversely, Mr Osborne needs to now turn the Healey doctrine on its head and start digging if Britain is to weather the growing economic “storm clouds” that he forecast. Three months ago after a virtuous Autumn Statement, it looked certain that the Chancellor would succeed David Cameron as PM. Now he is in danger of becoming yesterday’s man despite his determination to assist small businesses and raise personal tax allowances (a policy borrowed from the Lib Dems).

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With economic growth just a trickle in some parts of the country, Mr Osborne faced the embarrassment of having to announce another round of spending cuts if Britain’s deficit is to be eradicated by the end of this Parliament – five years later than originally forecast in 2010.

Not only have growth forecasts been revised downwards, but borrowing will increase for the next two years. Mr Osborne can’t even blame the last Chancellor because he was Chancellor in the last Parliament.

And then there is the Northern Powerhouse, the much-vaunted policy which was supposed to ignite a 21st century Industrial Revolution in these parts so Britain’s future prosperity was less dependent on the City of London.

Though Mr Osborne did announce £300m to improve road and rail connections across the Pennines, the Chancellor’s propensity for recycling announcements – just like Gordon Brown before him – explains why he finds himself in a Healey-like hole. People no longer believe – or trust – him.

Take this week’s promise to make £75m available to explore the feasibility of building Europe’s longest road tunnel between Sheffield and Manchester. This is not new. Just like the promised widening of the M62 and upgrading of the TransPennine railway between Yorkshire, Greater Manchester and the North West, it was first proposed in Mr Osborne’s Autumn Statement of December 2014 when he needed to provide some pre-election “sweeteners” for the neglected North while also shoring up the position of Sheffield Hallam MP Nick Clegg, the then Deputy Prime Minister.

The package of measures announced 16 months ago was hailed at the time by the Chancellor as a turning point for Britain’s transport network. It would, said Mr Osborne, “transform some of the country’s most important strategic routes”. Now, after the improvements were given the green light by the newly-created National Infrastructure Commission, Mr Osborne says “now is the time to make the bold decisions and the big investments”.

At least his PR team came up with a different form of words after The Yorkshire Post exposed the multiple “love letters” that David Cameron’s press aides sent to different parts of the UK as part of English Tourism Week.

Unlike the Prime Minister who has still, after 53 days, to have the courtesy to respond to this newspaper’s open letter on flooding policy, the Chancellor did generate £700m – albeit by an increase in the insurance premium tax – to increase spending on flood defences and, potentially, fund proposed schemes for Leeds, York and the Calder Valley, subject to the small print.

It’s just a shame that so many homes, and businesses, had to be submerged for the Treasury to realise that it was a false economy to ditch past plans, not least the scheme proposed for Leeds which was abandoned by the Tories in 2011.

It also does not excuse Environment Secretary Elizabeth Truss for failing to stand her corner prior to the Autumn Statement – this U-turn is proof that she chose to acquiesce to the Chancellor’s financial demands because of personal ambition rather than to protect those communities most at risk to flooding. It beggars belief that this damp squib of a Minister has not resigned.

Yet what should worry Mr Osborne is the immediate reaction in Yorkshire. As Tory MPs cheered, people were asking whether this £700m was for real or not.

Like so many Budgets, the devil will 
be in the detail. Unlike past announcements which took effect at midnight, many of Mr Osborne’s announcements have been pre-dated by 12 months or longer and, therefore, have time to unravel.

Yet this, in many respects, explains why George Osborne finds himself with no light at the end of the proverbial tunnel. For, despite the economic heavy lifting that has taken place since 2010 and his fondness for photo-calls in his hard hat, his pronouncements about growth surpassing the rest of the Western world do not hold water in Yorkshire, the county betrayed by the floods.

That is why Mr Osborne needs to get digging – and start delivering his headline announcements. For, unless new flood defences and transport links are built, Yorkshire will be in danger of becoming an economic backwater that cannot support the next generation.

If he does, the Chancellor might 
win back the hard-won trust that is in danger of being washed away because 
of a propensity to over-promise and 
under-deliver.