The Blog

Careful George, Your Opposition May Have Crumbled - But So Could Your Support

George Osborne may be right to boast that opposition to what he's doing is "crumbling", after Ed Balls agreed to work within the coalition's spending limits. The Chancellor would enjoy further clout after the IMF and OECD rallied behind his deficit reduction plan. But such groups have tended to be rather fickle in their support for the Chancellor. Osborne should beware relying on fairweather friends as justification for his economic agenda, as they can easily turn against him.

When the grilling got too tough for Chancellor George Osborne, be it over food banks or his tax plans, he had one thing to fall back on - saying everybody agreed with him.

"Opposition to what I'm doing on the economy is crumbling," he boasted on Thursday to the assembled members of the Treasury Select Committee in the Commons.

The chancellor does have reason to smile, with his opponents seemingly all over the place. For a senior member of her Majesty's Opposition, shadow chancellor Ed Balls blunted his ability to oppose the Tories' austerity measures when he announced he would stick to their spending cuts and "work within" Osborne's limits.

With this move, Balls has let Osborne set the terms of debate. Osborne can always sweep aside any future Labour attack with the response: 'But you wouldn't change it!"

The big names are broadly on Osborne's side. The OECD warmly embraced Osborne's "appropriate" fiscal tightening back in May and the IMF upgraded its UK growth forecasts in a sign of greater confidence just a few days ago. Even former Prime Minister Tony Blair admits that the last Labour government "failed to tackle the deficit".

Osborne can also take solace in the fact that the market sentiment remains on his side, a factor often cited by LibDems as vindication for their decision to rush into coalition with the Tories.

Businesses remain onoboard with the deficit reduction plan, but have their own particular wishes for Osborne to go further, like be it the CBI's desire for the ringfencing of aid and health spending to be binned and the IoD's call to boost infrastructure spending.

All this should be welcome news for the Chancellor, who does love a good name drop, once boasting at the Tories' 2010 conference that he enjoyed the support of "the IMF, the OECD, the credit rating agencies, the bond markets, the European Commission, the Confederation of British Industry, the Institute of Directors, the British Chambers of Commerce, the Governor of the Bank of England, most of British business, two of our great historic political parties, one of the Miliband brothers, Tony Blair, and the British people."

But a closer look at Osborne's list shows that his friends can be rather shaky in their support and he should perhaps beware of declaring victory for his agenda.

Remember: the IMF's chief economist Oliver Blanchard isn't a fan of Osborne, having laid into him just this April for "playing with fire" in pursuing his austerity agenda.

The OECD began calling on Osborne to tone down the speed of cuts after a year and carried on urging caution all the way up to this February.

The credit rating agencies have issued withering verdicts of Osborne's economic management, with two of them, Fitch and Moody's, deciding to strip the UK of its AAA credit rating. Yes, it's the AAA credit rating beloved by Osborne and hailed as a "reminder that the world has confidence that we are dealing with [our problems]".

Businesses haven't been afraid to lash out at the Chancellor, either. CBI director-general John Cridland complained in 2012 about the "really disappointing" lack of growth. Meanwhile, the Institute of Directors recently complained that they've been left feeling like Oliver Twist, asking for "more please, Chancellor".

What about Blair? The suntanned former PM may have enjoyed giving Ed Miliband a kicking recently, but when asked if he backed the coalition's economic strategy, he told reporters: "I have not endorsed anything".

Finally, the public's backing for Osborne's austerity measures has slowly ebbed away since the coalition came to power. According to one survey, over half of the electorate believe Osborne's economic plan has failed.

The Chancellor's allies that he once paraded to the Tory faithful in 2010 have not been afraid to question what he is doing. They may have made supportive noises at times, but they are far from firmly behind Osborne in supporting his austerity agenda.

Watch out George, your opposition might crumble, but so too could your fair-weather friends.