The rebirth of Adonis is a demonstration of Osborne’s ambition

Far from being triumphalist, the mood at the Conservative conference in Manchester is a little nervy and tentative. Of course, speeches are peppered with references to the unexpected election triumph – but even a headline-grabbing announcement, delivered with the wave of a conjuror’s wand, conveys a degree of doubt about the party’s appeal.

George Osborne turns to a Labour peer, Lord Andrew Adonis, to run his new infrastructure commission. A proposal in Labour’s manifesto takes shape under a Labour Party member. The Adonis appointment captures neatly the current shapelessness of British politics.

Osborne, a victim of Tony Blair’s big tent when he worked with William Hague after the 1997 election, has ached for defections and a similarly bulging tent for many years. He still has not quite pulled it off. He gave the former Liberal Democrat MP, David Laws, a call soon after becoming shadow Chancellor asking him to join the modernised Conservative Party. Laws declined, wondering how a party could become modernised in the space of a few weeks. Adonis turned down the invitation to defect too, although he hit upon what his friend Blair might call a “third way”, leaving the Labour front bench in the Lords while remaining a party member, and yet allowing Osborne to make the announcement in his conference speech, one of the more tribal events of the year. Adonis made clear that his leap was of limited political significance, pointing out that as a chair of a commission he must act independently, as other Labour peers have done.

For Adonis, the offer was too good to even contemplate refusing. Consider the choice: sitting out Labour’s low-level internal debate as a peripheral figure in the Lords; or, potentially making an impact in improving creaking infrastructure. Adonis was one of the few cabinet ministers under the last Labour government who made a mark, driving through the schools’ academy programme and then moving on to become a Transport Secretary with a passion for transport, almost a unique combination in British politics. The legislation for a high-speed rail line was drafted by the time he left office in 2010. Now he has the chance to focus on other projects.

For Osborne, the benefits are obvious too: highlighting and reinforcing Labour’s crisis, while having a new symbol to back his contentious claim – widely accepted among commentators and the BBC – that it is now the Conservatives who are on the vaguely defined centre ground. But there are also political risks in a big tent approach. Boundaries can become so blurred, a party ceases to know what its purpose is. Look at the current Labour Party, where the dissenters are unsure what they stand for while those theoretically in charge carelessly revive the divisions of the early 1980s.

Osborne is the only politician in Britain who continues to dance around the boundaries, sometimes deftly but, quite often, awkwardly. Was it less than a year ago that he delivered his Autumn Report in which he envisaged spending levels returning to the 1930s? Yesterday, a different Osborne was on display as he delivered the best speech he has made to the Conservative conference since he became shadow Chancellor in 2005 – focusing more on what government can do, instead of what it cannot. “We are the builders,” he proclaimed several times. He was calm; gentle rather than spiteful in his use of humour; passionate about his vision of a Northern Powerhouse, and what he called his “devolution revolution”. At one point he declared that he did not know whether it would work but he was going to give it all he had got. I liked the humanising doubt, and the determination to make sure the doubt was not realised. Anyone watching could see a potential leader, and one more at ease with the daunting context of being leader-in-waiting than Gordon Brown (although it should not be forgotten that Brown was one of the few leaders-in-waiting to become leader).

If Osborne does not succeed it will be because of the wide gap between the ambition of yesterday’s speech and the objectives implied in his Autumn Statement last year. It does not cost very much money to hire Lord Adonis to run an Infrastructure Commission, but it is very expensive to build infrastructure. Osborne does not want to borrow for capital spending even though he could raise the money at bargain interest rates. He seeks a revival of local government but councils face daunting cuts even if they are now allowed to spend the money they raise through business rates. The move to give them such freedom is likely to benefit London and the South-east, a magnet for business, while Osborne proclaims his ambition to bridge the North-South divide. On another thorny issue, he repeated that Britain deserves a pay rise when some low earners are about to get a pay cut from the removal of tax credits. He did not even mention an even thornier policy area, the fragility of the NHS. Then there is the referendum on Europe. If it is lost, the subsequent explosion will sweep away many parts of the current political furniture, including Osborne’s ambition to be Prime Minister.

The last Conservative conference that took place after a surprise election win was in 1992, a gathering that was rowdy in its intense reaction to Britain’s withdrawal from the Exchange Rate Mechanism. This one in Manchester is much more ordered and upbeat. But it is Europe once again that hovers. Managing the party is not the issue for Cameron and Osborne, it is winning the referendum. No doubt worries about the Conservatives and Europe were among the several reasons Adonis remains a Labour member. But he and Osborne will work fruitfully together if the Chancellor turns his desire to be a builder into more buildings. The ambition to build is the easy bit.