Tories gearing up for conference

By Laura Kuenssberg
Political correspondent, BBC News

The Conservatives are in Birmingham for their annual conference, where they are set to unveil plans to scrap fiscal rules they say are discredited.

Shadow chancellor George Osborne's hotel suite is certainly plush - I am here for a briefing about his big economic announcements this week.

But there is a knock at the door. It is his friend and boss, "DC" as he is known in some circles, who has come to check that George Osborne's room is not bigger than his.

No surprise, it is not - the Conservative Party leader has the bigger, better room, and it is apparently less stiflingly hot. But at the Tory conference this week, maybe Mr Osborne deserves the swankier suite. With seismic events shaking the world's economy, the shadow chancellor has the toughest brief of all.

Whether you believe Gordon Brown has ruined or resurrected the British economy, there is no doubt that he has had a place at the table of world economic events for many years.

George Osborne, at the age of 37, cannot claim any such experience. Gordon Brown's jibe at David Cameron, the "novice", could be aimed too at his shadow chancellor.

Purse strings

Mr Osborne's hope is to cast the prime minister as a reckless spender, whose casual approach to splashing taxpayers' money has left UK Plc seriously in the red.

And to portray himself as a man who would take more care with the public purse, who would begin by overhauling the way the spending of taxpayers' money is monitored.

It is not exactly the sexiest of ideas, but his team believes they are on to something with their new ideas on regulating borrowing.

The party leadership is set to announce that they would scrap the fiscal rules - discredited, they say, by Gordon Brown's fiddling over the years.

In their place, a Conservative government would create the Office of Budget Regulation, an independent organisation, accountable to Parliament, that would act as a referee on government borrowing and spending.

It would be that office - no doubt quickly dubbed the OBR as Whitehall never turns down an opportunity to use an obscure acronym - which would produce the country's economic forecasts, not the chancellor on Budget Day.

And it would produce a full audit of all of the nation's borrowing, including PFI and PPP and debt that currently lurks off the balance sheet.

It would not have any powers to force the government to act in a particular way, but it would have the power to embarrass them politically, as their independent assessments of the chancellor's progress would be public.

In that way, Mr Osborne says, the public could be assured that governments in future will spend and borrow responsibly.

The Conservatives describe the scale of these changes as a "fundamental overhaul" of fiscal policy.

Given the nature of events in Washington and Wall Street, it is hard to see their plans capturing much of the public's imagination.

But more details of the their economic ideas will emerge in the next couple of days.

Last year George Osborne's announcement on inheritance taxed wowed and surprised the conference. Pressure is building on him to produce similar gasps of delight when he takes to the platform on Monday - a rebooting of fiscal policy is no guarantee there will be a repeat performance.

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