Osborne: Not a penny more…

The chancellor could have taken the title of Jeffrey Archer's most famous novel as the theme of his conference speech today - Not a Penny More, Not a Penny Less.

He is making it absolutely plain that he won't spend more than his deficit plan allows and will not spend less than it permits. So, his message to Tory tax cutters and Lib Dem infrastructure spenders is the same - only if it can be done within our existing plan.

George Osborne will set out a cost benefit analysis for his conference insisting that the potential cost of spooking the markets - a 1% rise in interest rates would cost families and businesses £10bn - outweighs the potential benefit of easing up a bit to spend a bit more or tax a little less.

However, he will insist that this does not leave government powerless since money can always be found for a bit more on infrastructure - Danny Alexander announced half a billion pounds at the Lib Dem conference; or a bit more for science - David Willetts has unveiled £200m to invest in Graphene, better computer infrastructure and to complete the mobile phone network; and George Osborne himself will confirm that he'll provide funds to allow councils in England to freeze council tax for another year.

The unasked question here is - what if this isn't enough? Then Labour will insist that going slower on cuts and temporarily cutting VAT is the only answer, Lib Dems may increase their calls for faster infrastructure spending and some Tories will call for more tax cuts and faster deregulation.

The test the chancellor wanted to pass, though, was getting through the conference season with the markets still convinced that Britain was not going wobbly on its deficit plan.

PS He won't of course use the title of that Archer novel. Quoting a convicted perjurer wouldn't help when you're seeking credibility.

Update, 12:33: The most significant announcement in the chancellor's speech is also the one fewest will understand. It is his pledge that the Treasury will engage in "credit easing" - ie some as yet unspecified way to underwrite loans to small businesses who are struggling to get credit now.

The speech that they are quoting at the top of government is by Adam Posen - although I'm told that his proposal for a new bank may take too long to implement.