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IF George Osborne, the shadow chancellor, finds himself fighting for his political credibility, he has only himself to blame. When the question arose as to whether he had sought to solicit donations to the Tory Party from Russian oligarch Oleg Deripaska while on holiday in Corfu, he should have issued an entirely frank and full statement. What he actually did was to declare that "we didn't ask for money; we didn't receive any".
This may have been true, but it was not the whole story. Mr Osborne, it now seems clear, did discuss the question, though the Tories say it was raised by Nat Rothschild, the erstwhile friend who introduced him to the Russian billionaire. The conversation, according to Mr Rothschild, was witnessed by a US banker. David Cameron rallied to Mr Osborne's defence today, saying he had shown the "right judgment over the affair". But Mr Osborne should have been clear from the start about what took place.
As far as we know, Mr Osborne has done nothing improper; the idea was dropped. Gordon Brown's call today for an investigation is unlikely to lead anywhere. But the shadow chancellor should not even have countenanced a discussion of such donations from Mr Deripaska. The impression given is of a cosy confluence of wealth and influence that is unappealing. Mr Osborne may have to choose his friends with more care: As Lord Tebbit remarked today, "If you sleep with dogs, you get fleas".
One upshot is that the pertinent question of Peter Mandelson's own relations with Oleg Deripaska has been obscured. It emerged yesterday that Mr Mandelson's acquaintance with Mr Deripaska went back to 2005, when he was eU trade commissioner, and preceded the decision by the eU to lift tariffs on aluminium, which benefited the tycoon to the tune of £200 million. Yet the Tories are in a weak position now to question that relationship. Their stand on party funding, where David Cameron had sought reform, also looks compromised.
Mr Osborne is a highly intelligent man and an effective Tory strategist and networker. The lesson of all this is that in politics, judgment is all-important. Mr Osborne made a critical mistake in accepting hospitality in the company of a Tory fundraiser from a Russian tycoon. It is a lesson that should be taken to heart by the Conservative party.
R word is back
IN THE real world of joblessness, indebtedness and reduced household incomes, the outlook remains grim. Mervyn King, governor of the Bank of England, said last night that "it now seems likely the UK is entering a recession". The National Institute of Economic and Social Research, a think-tank, also declared that the UK is on the brink of the first full year of recession since 1991.
The banking crisis may, as Mr King suggests, be on its way to resolution as a result of the Government's action, but the real problem is now with the wider economy, not a single sector of which can be said to be in good heart. The Government has talked robustly about bringing forward public-spending projects to bolster growth but there is a limit to the extent to which big capital projects can be fast-forwarded. Still there was some cheer with Mr King's confirmation that interest rates will be tailored to the Government's inflation target of two per cent and may, in other words, come down. That is the best prospect of lifting the gloom.
Diana's in town
DIANA and Acteon, one of Titian's finest works, is on display in the National Gallery from today, on a brief visit from its normal home in the National Gallery of Scotland. Londoners should take the opportunity to have a look at this lovely picture and see just why it is that we should pay £50 million for it to stay in Britain. Credit crunches are transitory; this Titian will delight future generations.
Reader views (1)
It's funny but Osborne and his wife have received no criticsm of his receiving two weeks free holiday from a Hedge Fund Financier while being the Tories main spokesman on the problems in the City. When I think of the Press that the Blair's received for staying with Cliff Richard etc I feel that George is getting away with it. Even Camoron posed for Holiday photos with his wife on a beach in England before setting off for a mediterranean Cruise. Are these guys all unashamed scroungers?
- Harold Hill, Acton, 23/10/2008 12:40
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