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The next generation of Tory modernisers looks to Osborne, not Cameron, for inspiration

The balance of credit for getting the Tories even this far has clearly tilted towards the Chancellor.

George Osborne leaves No. 10 Downing Street on 7 October 2013. Photograph: Getty Images.

David Cameron and George Osborne follow what might be called the Samuel Beckett school of politics. “Try again. Fail again,” the great Irish poet and playwright advised when success proved elusive. “Fail better.”

Everything the Conservative Party’s leading duo claim to have achieved is salvaged from the wreckage of things they once said they wanted to do. In opposition, Cameron did not fulfil his ambition to “modernise” his party, or even persuade it that his kind of modernisation should be the aim. He has called his Conservatism variously “compassionate”, “green”, “liberal”, “post-bureaucratic” and “progressive”. The Tories do not now loom in the public imagination as any of those things.

Osborne’s record is hardly better. He wanted to whip the public finances into shape in time for a 2015 election. Instead, the Budget squeeze will extend deep into the next parliament. The economy has grown less and government has borrowed more than he planned. As for political strategy, by cutting the top rate of income tax, the Chancellor has done more than any Labour politician to cast the Tories as servants of the rich.

Now that growth has returned, Conservatives claim that Osborne is vindicated but his real achievement is to be blamed so little for getting so much wrong. Economists will keep debating whether the pace of spending cuts explains the dismal growth since 2010. In political terms, it hardly matters when enough voters think the pain was made unavoidable by Labour maxing out the nation’s credit card.

The opposition’s strategy now is to change the subject from Treasury accounts to household finances – and it seems to be working. Ed Miliband’s promise to freeze energy bills has propelled the high cost of living to the top of the agenda, which is problematic for the Tories because they don’t know how to get prices down.

That is not necessarily the seismic movement in economic debate that the opposition needs. Public suspicion that Labour is habitually spendthrift remains a weakness. Ed Balls knows as much and devotes more time to thinking of ways to signal Budget discipline than his critics seem to realise. Unless the fiscal credibility leak is plugged, the cost-of-living campaign risks becoming a complaint about the shape of a recovery made by the Tories. Labour will be derided as arsonists, moaning about the way the fire brigade deals with the inferno they started.

Downing Street will also portray Miliband’s attacks as defeatism – to be filed as false prophecy alongside warnings of triple-dip recessions and 1930s-style mass unemployment. “We need to be wary of declaring false dawns,” says one Tory cabinet minister. “But they should be worried about declaring false dusks.”

Besides, Cameron’s instincts, supported by focus group reports, tell him that Britain has taken against the Labour leader and won’t make him prime minister even if he campaigns on resonant issues. The No 10 view, according to one Tory insider, is: “It really doesn’t matter what Ed Miliband says because he’s Ed Miliband.”

The response from Labour strategists is that voters warm to their candidate the more they see of him, while the opposite is true of the Prime Minister. Cameron’s confidence of his superiority as a performer blinds him to the way that overconfidence and a presumption of natural superiority are his most rebarbative traits. His ability to look steadfast and genial in front of a camera is useful as a contrast to Miliband but it doesn’t dilute the old toxin in the Tory brand. Cameron had his chance in opposition to persuade people that he was at the vanguard of a new breed of Conservative and not enough voters bought it to deliver him a majority in parliament.

The next generation of Tory “modernisers” doesn’t buy it either. Many of the young, liberal-minded MPs who entered parliament in 2010 as “Cameroons” have given up expecting inspiration from Cameron. They admire Michael Gove as a crusader against state control in public services but their true leader is Osborne. It is often noted in Westminster that the Chancellor has cultivated a coterie of MPs and ensured their elevation up the ministerial ranks – Matt Hancock, Nadhim Zahawi and Liz Truss, among others – as if their loyalty is based only on patronage.

Belief plays a stronger part than is often recognised. Osborne is seen as a more rigorous thinker than Cameron and more interested in matching the party to the complexion and mores of 21st-century Britain. The Chancellor’s distaste for the policy of celebrating marriage with selective tax breaks is revealing in that respect. He goes along with it out of loyalty to Cameron but he grasps that it is money wasted on a moralising message that only traditional Tories understand. Conservatives who fret about the party’s failure to appeal in the north and among ethnic minority communities look to Osborne, not Cameron, to think of solutions – or at least to engage with the problem.

Ambitious young Tories note how Osborne retains fiercely clever advisers at the Treasury while many of the brightest No 10 aides – James O’Shaughnessy, Steve Hilton, Rohan Silva – have quit since 2010. The suspicion is that the Chancellor likes being challenged while the Prime Minister is more comfortable surrounded by amiable mediocrity.

The two men’s political fortunes are still intertwined. The bulk of their party is united behind them in recognition that, even if their route to victory is uncertain, it is the only one they have. Yet the balance of credit for getting the Tories even this far has clearly tilted towards Osborne. Cameron is valued chiefly as the right salesman for a party that will be lucky to do any better in the next election than it did in the last one. Even Conservative optimists have pinned their hopes on the prospect of failing again, failing better.