The coalition’s got problems, but Tory government can still survive, albeit perhaps with a different, older head.

The end of this week sees George Osborne retreat on three high-profile sections of his 2012 Budget, with the cap on charity tax relief (previously blogged here) joining u-turns on the VAT status of pasties and static caravans.

To negate embarrassment, the Treasury made these announcements in the true tradition of choosing good days to bury bad news, with pasties and caravans being announced just prior to recess and thus avoiding any awkward parliamentary questions, and the charity tax cap, despite the promise of a summer consultation, being ditched just as Jeremy Hunt gave evidence to Leveson on Thursday.

According to the Financial Times, Osborne has sacrificed these measures in order to avoid the politicking: “Mr Osborne presented the retreats as a sensible piece of housekeeping – defusing awkward and relatively trivial political rows to allow him to focus on his role as the country’s economic helmsman: ‘Keeping Britain safe in the gathering storm.’”

Nonetheless, this embarrassing muddle does nothing to diffuse the growing perception that Cameron’s government are out of touch toffs. Denying the plebs the pleasures of sausage rolls and a week by the sea in a caravan. Not realising that those wealthy benefactors don’t just magically appear at the appeals of charities and arts organisations in need, but require cajoling.

Like a stopped clock, Nadine Dorries is, occasionally, right. Or she was at least once last month when she called Cameron and Osborne “two arrogant posh boys” with “no passion to understand the lives of others”. While Osborne is beset by Budget troubles, Cameron is increasingly suffused by the omnishambles generated by Leveson, from the arrest of his mates Rebekah and Andy, to having to defend Hunt.

It’s no surprise that recent elections to the 1922 Committee saw backbenchers like Priti Patel, Guto Bebb and Simon Kirby elected, all part of the 301 Group loyal to the leadership and less likely than the 1922 Committee old guard to criticise government policy. The lack of coincidence is reaffirmed by Nick Pritchard, who complained that Downing Street “should spend more time trying to fix the economy and less time trying to fix the 1922 elections” as he stood down as one of its secretaries.

So the wagons are circling, as we approach Westminster’s mid-term. The Tories’  hope is that current controversies become chip paper, the economy starts to recover and grow, and that those 301 Conservative MPs (hence the name of the faction) are elected in 2015 for a full Tory government.

Labour, of course, revel in each and every crisis plaguing the coalition, whether condemning the budget u-turns as a shambles, or forcing a vote on Jeremy Hunt. But whether these issues will lead to any electoral benefit to Labour is yet to be seen.

Despite shoring up the 1922 Committee with supporters, the Tories do have a streak for being ruthless when their leaders let them down. If Cameron and Osborne can’t get the coalition show back on the road, the knives will be drawn by their backbenchers.

Any obvious successors? Osborne is right that the focus has to be on steering the economy – the foremost issue in voters’ minds. -So it needs a good, calm pair of hands. Possibly someone already tried and tested, known by voters.

Despite claiming he has no ambition to lead his party for a second time, William Hague seems an obvious choice. A competent Foreign Secretary, with a Yorkshire accent and comprehensive schooling to boot, just to get rid of all those Tory toff jibes.

This week Hague and Miliband look like leaders, while Cameron looks like anything but. Hague is promising that military action on Syria is not being ruled out, and launching campaigns against sexual violence in war zones with Angelina Jolie. Meanwhile Ed Miliband is visiting troops in Afghanistan and calling for action to protect soldiers from abuse back home. Meanwhile 1 in 10 people apparently think David Cameron is an alien.

Hague now seems a lifetime away from his aborted leadership during Tony Blair’s heyday. Where once was naivety and bluster there is parliamentary oration and political instinct. He would be a far more difficult, heavy-weight opponent than Cameron for Miliband to take on at a General Election. I doubt a Conservative Party, led again by Hague, could be beaten.

Nobody wants to join Peter Bone, in his morbid fascination with who gets to run Britain should Cameron be killed, but I think his preference for that person to be Hague is telling. Should the present omnishambles not clear any time soon, Hague’s definitely the one to watch.