George Osborne: A silver spoon for the golden boy

Britain's youngest Chancellor since 1886 is facing the biggest week of his life. His first Budget will define his career – and the Government.

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When George Osborne stands up to give his first Budget speech on Tuesday, he will risk provoking raucous laughter from the Labour benches if he reprises the line that David Cameron used on the eve of the election, that "we're all in this together".

The public spending cuts that he will lay out will have a dire impact on a very large number of people, but not on the Osbornes. They are all in that happy state of material comfort in which they need to ask nothing of the state, except to leave their inheritance alone.

Osborne is a relatively young man, who has everything – intelligence, ambition, a strong character, an imposing presence aided by his above average height, immense wealth, a stable family, and a vocation in which he has been staggeringly successful. And with the passing of the years, we may discover which George Osborne is the real one. Tim Montgomerie, who runs the influential Conservative Home website, reckons there are at least three, possibly four, political personalities living side by side in the Chancellor's breast. Others, less perceptive and less sympathetic, see only two – a hard-nosed Thatcherite, and a career politician clever enough to see that right-wing ideology does not win elections.

When he was appointed shadow Chancellor in May 2005, Osborne's mission seemed to be to keep Thatcherism alive. He told the BBC: "I would be reluctant to give myself the moderniser label... I don't think you achieve those things by having some great internal battle." At that time, his big idea was a flat tax. Instead of three rates of income tax, as there then were, Osborne was thinking of bringing a single rate, with the biggest gainers obviously being for those on the highest incomes. A few months later, there had been a dramatic change at the top of the Conservative Party. Instead of electing yet another leader from the right, the party had gone for a moderniser in David Cameron – and there at his side was George Osborne, reincarnated as a moderniser who apparently no longer believes that tax cuts for the wealthy will bring about economic revival.

But even in his new political guise, he looked fully at ease when he delivered the annual Mansion House lecture this week, dressed in dinner jacket and black bow tie. And well he might. He is as rich as most of the people in his City of London audience and – unlike most of them – he is an aristocrat with a pedigree stretching back to early in the Tudor era. His father, Sir Peter Osborne, is the 17th holder of a hereditary baronetcy that has been passed from father to son for 10 generations, and of which George is next in line. Sir Peter teamed up with his brother-in-law, Anthony Little, in the 1960s to open a small showroom in Chelsea, where they offered exquisite, handprinted wallpaper for sale. Osborne & Little has expanded to become one of the world's leading makers of wallpaper and fabrics, making Sir Peter rich enough to set up trust funds worth several million pounds for each of his four children.

His eldest, born on 23 May 1971, was christened Gideon Oliver Osborne, but did not like his first name, and adopted the name George. He was educated at St Paul's, a private school in London, where James Harding, the present editor of The Times, was a near contemporary. After school, he read modern history at Magdalen College, Oxford, where he obtained a 2:1, edited Isis, the student magazine, joined the Bullingdon Club – like David Cameron and Boris Johnson before him – and became friends with Nat Rothschild, who later introduced him to the Russian oligarch Oleg Deripaska, on whose yacht he mingled with others who enjoy the company of the mega-rich, including Peter Mandelson.

Years later, a photograph emerged of a 22-year-old Osborne at a table with a woman who later became a prostitute. There is evidence of drug use in the picture, but Osborne attributed that to a friend who became a cocaine addict. Like Cameron, he does not answer questions about whether he experimented with drugs as a student. The future Chancellor showed no obvious interest in politics in his student days, but had an ambition to be a journalist. His Who's Who biography includes the entry "freelance journalism 1993" – the only hint of any job he has ever done outside politics. His byline does not appear in the electronic database of any major newspaper. He was shortlisted for a job on a national newspaper, but did not get it. He tried again after the 1997 general election, when he was interviewed for a job on The Economist by a journalist who, coincidentally, was another old boy of St Paul's, Gideon Rachman. The interview did not go well.

"There was a strange undercurrent in our discussions – the Gideon question," Rachman, now at the Financial Times, wrote later. "Why had Osborne junked the name, Gideon, in favour of George? It was not something I felt I could ask him directly... Gideon is regarded as a Jewish name (although it is also popular among Zulus). I guess that could have been part of Osborne's motives? But even if it was, I'm inclined to be forgiving. Osborne isn't Jewish, and I can see it might be odd to have a false ethnic flag pinned to your back."

He didn't enjoy his other temporary jobs, working first as a data inputter for the NHS, which he said involved recording the names of people who had died in London the previous day. He also spent a week in Selfridges, where his job was to pick up the towels that customers had examined but not bought, and re-shelve them, properly folded.

In 1994, George Bridges, a university friend, tipped him off about a job going in Conservative Central Office. He was appointed head of the political section of the Conservative Research Department, aged 23, and has not stepped outside full-time politics since. If he was surprised to find that he had a natural aptitude for politics, he need not have been. It is in the blood.

Sir Richard Osborne, founder of the Osborne dynasty, was an MP and a high-ranking official in Ireland, and was made a hereditary baronet by King Charles I in 1629, in recognition of his public service. The seventh baronet, Sir John Osborne, great-great-great-great-great-grandfather of today's Chancellor, was also an MP. So was Sir William, the eighth baronet, and Sir Henry, the 11th baronet. But the real glamour in Osborne's ancestry is on his mother's side. His maternal grandmother was the Hungarian-born painter Clarisse Loxton Peacock, who married an Englishman, Grantley Loxton Peacock. There is politics also in his wife Frances's family. She is the daughter of David Howell, now Lord Howell of Guildford, a minister of Margaret Thatcher's original Cabinet in 1979.

After eight years working either at Conservative Party headquarters, or as a special adviser to successive ministers for agriculture, Osborne had struck lucky. Martin Bell, the man in the white suit on a mission to clean up Parliament, had taken Tatton, in Cheshire, in 1997, but only ever intended to stand for one term. Since Tatton was previously one of the safest Tory seats anywhere, whoever was adopted as Conservative candidate before the 2001 election was effectively guaranteed a seat for life. Osborne could offer the local association both youth, because still in his twenties, and experience, as William Hague's political secretary.

He entered the Commons at the same time as Cameron and rose at the same speed through the party's ranks. This gave rise to talk of parallels with Tony Blair and Gordon Brown – but there is an important distinction. Whereas Brown is older than Blair, and felt that his position had been usurped by his junior partner, Osborne is nearly five years younger than Cameron, and does not object to being in his slipstream.

Having just turned 39, he is the youngest Chancellor of the Exchequer since Randolph Churchill, in 1886. That is not an altogether happy precedent, because Churchill's career ended after four months, but there is no reason to expect that Osborne will be so self-destructive. The Cameron-Osborne partnership may even last 10 years, like the Blair-Brown duumvirate, but without the endless feuding behind the scenes. Theirs is a class act.

A life in brief

Born: 23 May 1971, London.

Education: Attended St Paul's School, London. Went on to Magdalen College, Oxford, where he took a 2:1 in modern history and become joint editor of Isis, the university magazine.

Family: Son of Sir Peter Osborne, founder and chairman of Osborne and Little plc. Heir to baronetcy of Ballentaylor, Co Tipperary. Married the writer Frances Howell, daughter of Lord Howell in 1998. The couple have two children.

Career: Originally intended to become a journalist but joined the Conservative research department in 1994. Went on to become an adviser to William Hague and was elected MP for Tatton in 2001. Youngest Chancellor of the Exchequer since 1886.

He says: "I worked for Douglas Hogg during the BSE crisis, for John Major when he lost the 1997 election and was William Hague's political adviser when we lost the next election. Maybe I have given pretty poor advice." Said in 2005.

They say: "[Osborne has] an unbroken record of getting it wrong. His inexperience is a risk; his judgement is a risk; his values are wrong." Shadow Chancellor Alistair Darling