The top of the Tory Party appears before George Osborne after his Summer Budget

The Tory admiration after Osborne delivered the Budget marked the moment when the balance of power tipped in his favour

Iain Duncan Smith can hardly control his emotion as George Osborne announces the introduction of a compulsory national minimum wage (PA)

Lip-readers were in great demand during George Osborne’s Summer Budget statement on 8 July as everyone wanted to know whether Iain Duncan Smith said “fan-tas-tic” or “fucking get in” when he double fist-pumped the air with delight at the announcement on the living wage. But I was more interested in what David Cameron said to Osborne as the Chancellor sat down following his one hour, six-minute speech.

From where I sat, perched above them in the press gallery, I think the Prime Minister, taking in a sea of Conservative MPs loudly cheering and waving order papers, said in his political friend’s ear: “Just take a look at that.” This admiration from the captain to his first mate marked the moment when the balance of power tipped in Osborne’s favour – the Chancellor has one hand on the tiller. When he spoke of the “smooth path” of public spending between now and 2020 it was hard not to also think of the smooth path of succession at the top of the Conservative Party that has suddenly appeared before him, like an open sea with a following wind.

But away from the helm of the ship, somewhat abaft, stood Boris Johnson. I could not lip-read what he said because he seemed to say nothing for the full hour. Plenty has been written about this Budget being used by Osborne to steal Labour’s clothes, cherry-picking ideas from Ed Miliband’s manifesto. Yet this was also an opportunity for the Chancellor to carve into the territory of the London Mayor’s one-nation Conservatism. Johnson has long been a champion of the living wage in London and he has been the socially liberal, acceptable face of Conservative centrism: the Tory whom non-Tory voters felt relaxed about backing for mayor in 2008. Now, following an election won outright by the Conservatives, Osborne inhabits that role. Where does this leave Johnson’s formerly unique position as the Heineken Conservative – refreshing the parts of the electorate that other Tories could not reach?

Putting aside the unfairness of the raid on tax credits, Tory MPs were delighted with the Summer Budget and, in the context of a 2019 leadership contest, this is crucial. In the minds of Conservatives, the difference between Osborne and Johnson is not only their views on whether an expansion of Heathrow should go ahead – and the Chancellor made his feelings clear when he joked about the MP for Uxbridge’s “dilapidated state of his campaign bunker” and the “days when aeroplanes flew freely over the skies of west London”. The more important difference between Osborne and Johnson is that one man has been making the difficult, unpopular decisions on the economy and welfare and has borne the brunt of Conservative unpopularity, while the other is associated with the good times of the Olympics. Johnson’s high point coincided with Osborne’s lowest – the 2012 Games when the Chancellor was booed while the mayor could get away with getting stuck on a zipwire. Johnson, in an interview with the Times, tried to claim back some of his USP by promising to be a “warrior for the dispossessed”. Yet when decision time comes for Tory MPs, it is the candidate who has steered the party through the choppiest of waters who will be more attractive. As a historian, Johnson must be aware of the Martin Luther quote: “Where the battle rages, there the loyalty of the soldier is proved.”

Remembering a statesman

On 7 July, a small private ceremony in Westminster Abbey marked the unveiling of a memorial stone for former Labour prime minister James Callaghan – the only politician to have held all four senior offices of state (having also been Chancellor, Foreign Secretary and Home Secretary). Led by the Dean of Westminster, the ceremony was held in the politicians’ corner of the Abbey. Callaghan’s handsome black memorial lay alongside that of Clement Attlee, whom he first served under in the 1945-50 post-war government, his hero Ernest Bevin and Harold Wilson, his predecessor at No 10. Among the attendees were his daughter Margaret Jay, David Owen, Shirley Williams and Bernard Donoughue, who was Callaghan’s senior policy adviser.

Lord Donoughue read a passage from Romans 12, which included the phrases “Love one another with brotherly affection. Outdo one another in showing honour ... be patient in tribulation … Live in harmony with one another ... If possible, so far as it depends on you, live peaceably with all.” Advice the Labour leadership candidates could heed.

Cometh the Ora ...

Before the Budget, I queued in the House of Commons press-gallery canteen for a sandwich and some soup (it’s always good to carb-load for these occasions given that PMQs, the Chancellor’s statement and the post-Budget briefing went on for more than three hours; I hope, for Osborne’s sake, he’s not back on the 5:2). The line bristled with security guards and I wondered whether George Clooney had come to watch PMQs a fortnight after his wife. It turned out to be the President of Kosovo, Atifete Jahjaga, waiting for a cappuccino before the set-piece occasion. She was also in town to make Pristina-born singer Rita Ora an honorary ambassador.

Tories throw a block party

In one of the oddest stories of the week, it emerged that George Osborne’s Twitter account had blocked @LibDemPress – something the Lib Dems took great delight in highlighting in a tweet that has been retweeted 2,800 times and favourited 2,000 times. Perhaps it was just as well, because the account spent 8 July tearing apart the Budget and its failure to mention mental health, its war on “green crap” and unfairness on tax credits. Osborne’s circle is none the wiser about who blocked the Lib Dems, and given his team has had a major overhaul, it is possible the Chancellor did it personally. But, as one Tory wag remarked, Osborne was only doing to the LibDems what the electorate did on 7 May.

Twitter: @janemerrick23