Jenkin has an intriguing suggestion for how the chancellor could find funds to do this: “If he needs the extra revenue and cannot find other short-term savings, he should be considering the Sugar Tax [a controversial new measure on sugary food and drinks].”Despite the attacks and hot air from the opposition parties, Osborne and the government are unlikely to reverse themselves on the cuts — after all, they are a cornerstone of the government’s plan.Over this weekend, the language of ministers has subtly shifted. Nicky Morgan, the education secretary, and Matt Hancock, the Cabinet Office minister and a close ally of the chancellor, said the government is in “listening mode” (as Jenkin suggested) while pointing out the reforms have passed through the Commons several times.This signals a classic Osborne strategy: showing that the government is compassionate and understanding, but sticking true to the path the electorate has put them on.* * *If Osborne manages to scrape through the tax credits row without rebranding the Tories as the “nasty party” who are penalizing the poor, it will prove he has the mettle and political abilities to be prime minister. * * *While the chancellor has basked in this Chinese glory, he has also had to deal with an ongoing row over slashing tax credits — cash payments introduced by the last Labour government to top up the incomes of low-paid workers. Osborne has promised to cut £12 billion from the welfare budget and scrapping tax credits will save £4 billion.These cuts are going to hurt ordinary working voters, and although Tories have been aware of a potential backlash, they are united in a belief that the system needs reforming. Even senior Labour figures acknowledge that there are problems with tax credits: the former Labour chancellor Alistair Darling said they have ended up subsidising low wages “in a way that was never intended.”Some believe the tax credits row has fatally wounded Osborne’s reputation within the party, as well as his chances of succeeding David Cameron as Tory leader and prime minister.Yet there is one major presentation problem that the Tories are trying to overcome: the cuts are going to hit the very “hardworking people” they said were on their side during May’s general election campaign.The IFS, a respected independent economic think tank, says over three million families will be an average of £1,000 worse off as a result of the cuts. Despite the furore in the press and in parliament, the cuts have been voted through the House of Commons no less than three times: first during the Finance Bill after June’s Budget, then a ‘statutory instrument’ to introduce the cuts, and finally an opposition motion last week. But the government is still trying to explain that the cuts will not make people worse off, thanks to the introduction of a National Living Wage, a rise in the income tax threshold and free childcare.* * *While Conservative MPs agree with the reforms and have publicly supported the chancellor, some still hold private concerns about how the public will react when the first letters land in a few weeks, informing families who will be affected by the changes.Some believe the tax credits row has fatally wounded Osborne’s reputation within the party, as well as his chances of succeeding David Cameron as Tory leader and prime minister. Others say he has done the right thing by refusing to perform a U-turn, and that his reputation will recover.One loyal Conservative MP says “the chancellor’s reputation is still strong” within the party: “No Tory MP voted for Labour’s motion on tax credits last week. The tax credit system needs reforming, he’s set the course and by following through, he’s showing strength. The needle on his reputation hasn’t shifted for the worse.” Another Tory backbencher says “I think a U-turn would be more damaging than ploughing on.”Some in the party believe, however, that mitigation for the cuts is needed. Bernard Jenkin, the Conservative chair of the Public Administration Select Committee, says, “I think Osborne should carry on with the cuts but ameliorate the introduction for those worst affected. It would show he is listening and compassionate.” But he has his work cut out. For now, the chancellor can take comfort that he is still the bookmakers’ favourite to be the next prime minister — ahead of both his Tory leadership rival Boris Johnson and Labour leader Jeremy Corbyn.Naturally, both Johnson and Corbyn have been eager to make political capital out of the tax credits row. Whoever triumphs on this row, it appears, may triumph in running the country.Sebastian Payne is deputy editor of the Spectator’s Coffee House blog.This article was updated to correct the name of the Public Administration Select Committee. Most of the focus so far has been on councils in Manchester and the North West, but the North East of England and Teesside finally signed up to their own Northern Powerhouse devolution deals last week. Newcastle, one of the cities that rejected an elected mayor in 2012, will soon have one anyway.These areas are traditionally solid Labour, meaning the Tory government will have to cope with mayors that might have a confrontational political agenda.James Wharton, one of the few Conservative MPs in the North East of England and the grandly titled Minister for the Northern Powerhouse, says, “I think it’s great news that more areas are signing up to devolution and that, whatever the politics of the mayors elected, having one person with that direct sharp accountability to drive forward positive change using the powers to be devolved is a huge opportunity to achieve accelerated economic growth.”Osborne has promised to cut £12 billion from the welfare budget and scrapping tax credits will save £4 billion. These cuts are going to hurt ordinary working voters.Wharton and Osborne took President Xi up to Manchester during his recent controversial state visit and announced new deals with China — albeit ones with minimal substance. Instead of throwing billions into the North, all Xi was willing to hand over was a paltry £4 million investment in a block of flats and announce a new air route between Manchester and Beijing.Although the visit was mainly show, it was a boon for Osborne to have a major international leader visibly back his project, despite critics claiming that the British have been kowtowing to the Chinese. He joyfully tweeted that he was pleased the Chinese premier had visited the 北方经济引擎 — the “Northern Economic Engine.” LONDON — It has been a week of highs and lows for George Osborne. On the one hand, the chancellor’s pet devolution project, the so-called ‘Northern Powerhouse’, has gone from strength to strength — even receiving support from Chinese President Xi Jinping.The British economy remains drastically imbalanced and the government hopes to empower regions which have failed to recover from deindustrialization by transferring billions in spending powers from Whitehall to town halls. In return for this cash, Osborne has demanded these areas bring in directly elected mayors.Three years ago, nine out of 11 British cities rejected elected mayors in a series of referenda but the government is pushing ahead regardless. The belief behind these Northern Powerhouse deals is that a combination of making councils more accountable and devolving spending control will detoxify the process of cutting budgets — as well as giving voters a greater connection to their local politicians.