George Osborne’s critics sense that his reputation as a master tactician is unravelling. His “omnishambles” budget of 2012 was a clue to the limits of his powers.
More recently, he entered the battlefield in the EU referendum with all guns blazing, only to run out of ammunition weeks before the vote. Analysts were bemused that the chancellor and the prime minister had fired all their shots before most people had woken up to the fact that a referendum was even taking place.
The Organisation for Economic Co-operation and Development waded back into the debate earlier this month to remind voters that its calculations, and those of all economic forecasters, were that Britain would suffer badly from leaving the EU. Angel Gurría, the Paris-based organisation’s boss, repeated the warning last week, though he had nothing new to say.
On Thursday the chancellor has the opportunity to resurrect the Remain camp’s faltering campaign to keep Britain in Europe when he takes the podium at the Mansion House to make his annual speech to City grandees.
Without any extra cards to play, he will attempt to demolish Boris Johnson’s claim that money used to fund the EU can be diverted to the NHS and other vital public services.
He will repeat the Treasury’s own calculations that households could lose £4,300 on average by 2030 from a cut in the UK’s likely growth rate of 6%.
“The conclusion is clear for Britain’s economy and for families – leaving the EU would be the most extraordinary self-inflicted wound,” he has said.
Only he will need to go further. Taking the forecast from the Institute for Fiscal Studies that Brexit could generate a £40bn black hole in the government’s finances, he will tell the massed ranks of City executives that the impact of such a shortfall will be disastrous for the NHS.
How, he will ask, when he has already cut all other services to the bone, can the ringfenced NHS and schools budgets now survive intact? It will be Project Fear writ large.
But that is essentially a message for wavering Labour voters, fearful that a vital public service will be threatened by a Brexit vote.
City bankers, on the other hand, will probably be more interested to hear the night’s other speaker, the Bank of England governor Mark Carney.
He is a staunch supporter of the chancellor’s anti-Brexit campaign on the basis that the Bank’s research shows it will undermine the UK’s recovery. Worse, the immediate aftermath of a Brexit vote will test the bank’s powers to keep the financial system from going into meltdown.
Carney has secured a reputation as much the most trusted among the custodians of the UK’s financial system. Purdah rules will prevent him from saying more on the subject before the vote, but Osborne will want to project an image of the governor standing next to him both physically and in the fight against a Leave vote that would launch a voyage into the unknown.
There are plenty of hedge-fund managers and private-equity investors, most of them based in London’s Mayfair, that welcome any chance to cut regulations and bureaucratic red tape. They see Brussels as out of tune with their concerns relative to the more accommodating UK Treasury. It is this group Osborne will be under pressure to address.
Unfortunately, he can’t threaten that a post-Brexit Treasury would be no more compliant than it is now – because he almost certainly would no longer be chancellor.