Policy Exchange party

Like all good think tanks, Policy Exchange is officially non-partisan. Last night's line-up of guests at their summer party rather proved the point. The BBC's Nick Robinson was in his element, chatting away to "two-brains" David Willetts. And just beside them, the Guardian's Michael White was deep in conversation with former Tory MP (now Labour) Quentin Davies. I wonder if Quentin is kicking himself? Will Hutton was also there. You get the picture...

As White says in today's Guardian, the Tories are now talking about themselves as a government-in-waiting. And last night was no exception. Shadow chancellor George Osborne headlined the night's proceedings, with a rather confident little speech - based on the very strong assumption that he and David are now just watching the clock before they take over Downing Street.

Osborne, meanwhile, is planning a major revamp of the Treasury. As chancellor, he says he would scale back HMT's micro-managing of the rest of Whitehall, and refocus its efforts on controlling public spending.

But (a) this isn't a new proposal - I heard George say the same thing to a Policy Exchange audience two years ago ("The Treasury is broken, and needs to be fixed.") And (b) it's already starting to happen - perhaps by accident, rather than design. One year after Gordon's departure, the Treasury under Alistair Darling has retreated somewhat from its all-powerful omnipresence, and been forced by events (Northern Rock), tax issues (inheritance, capital gains, 10p) and the downturn, to focus more on its finance ministry function.

PS: Osborne is seriously thinking about shifting the administration of tax credits and child benefit, out of Revenue & Customs and into the Department for Work and Pensions. This is partly because of the over-payment of Working and Child Tax Credits, which resulted in a £1 billion loss to the Exchequer in 2006-07. More on that soon.