George Osborne began his conference speech by pointing out that two years into government, Ted Heath had flinched on the economy and lost while Margaret Thatcher had kept on and won. Osborne’s message was, I’m determined to be Thatcher not Heath.

The Chancellor’s allies clearly knew this was an important speech for him. Several times, Michael Gove — probably, Osborne’s closest friend in Cabinet — started to clap before the applause line had finished been delivered.

One strategic objective of the speech was to try and win back the ‘one nation’ mantra that ‘we’re all in this together’ for the Tories. Osborne delivered one of his most robust defences yet of his decision to cut 50p, arguing that ‘it’s a completely phony conception of fairness’ to stick with a tax that you know raises no money. He wanted to show he’s striving for fairness at the top and the bottom. There’ll be a further clampdown on tax avoidance and evasion and a possible new tax on the wealthy combined with another £10 billion of welfare cuts.

The new policies Osborne announced in the speech were tax breaks for growth. One is a clever way of fusing together the Beecroft changes to employment law with the Lib Dem interest in employee ownership. It’ll see employees able to trade various of their employment rights for shares in their company. No existing employee will be able to be forced to take up this offer. But companies will be able to hire on this basis from next April. The scheme will, I expect, be popular with fast-growing small and medium sized enterprises.

There’ll also be a new, more generous tax regime for shale gas in an attempt to encourage more fracking. It’ll be intriguing to hear what the Lib Dem Energy Secretary Ed Davey, no shale enthusiast, makes of this.

The Tories’ big argument this week is that the world has changed and Britain needs a government that has grasped what that means which Labour hasn’t. Osborne praised the ‘silent revolution’ that the coalition is undertaking to make Britain more competitive for the future—education and welfare reform, improving infrastructure and structural change to the economy. But this revolution is going to need to be more audible if the Tories are going to win a second term.

Tags: Conservative conference 2012, Conservatives, George Osborne, UK politics