Badenoch puts Tories on difficult path to the right destination

Party conference season has come to an end, having barely registered for most voters beyond an extra dose of politics on the news and in their feeds. Party leaders always have to balance two audiences: their supporters in the hall and the sceptics at home.

As a new Prime Minister, Andy Burnham’s conference speech was always going to be a pitch to the nation but his activists and MPs positively bathed in his socialist vision for the country. Kemi Badenoch also delighted her in-person audience with an emphatic articulation of what she unapologetically describes as a “classic old-school Conservative” pitch. Between them, these two party leaders drew some astonishingly clear dividing lines.

One believes in state ownership of utilities, the other recoils from the idea of nationalised industries. One laid the groundwork for tax rises, the other described reducing the tax burden as the central mission of her project. One thinks the broadest shoulders should bear a little more weight, the other thinks they already carry more than their fair share.

Inheritance tax is the most hated tax

And yet, they both believe their policies speak to the public’s aspirations. Burnham thinks that the best way to help people get on in life is for the state to take care of the essentials: water, rail, energy and housing. In contrast, Badenoch sees the state – and the ever-increasing cost of it – as a barrier to economic and human flourishing. This is the ground on which Labour and the Tories will do battle, and Badenoch believes she’s found a powerful weapon: “No stamp duty when you buy your home, no ‘mansion tax’ when you live in your home, no inheritance tax on your home when you pass it on.” This is the Tory equivalent of bringing private utilities into public ownership. It goes to the core of who they are.

Inheritance tax is the most hated in the country despite being paid by relatively few estates. Why? Because it feels like an injustice to many. The Tories understand this.

However, affording this kind of radical reform will require a combination of healthy and sustained economic growth with deep cuts to public spending. Badenoch rightly singles out the welfare budget as ripe for a raid, although not the triple lock on the state pension. Critics will point out the incoherence of such an approach, and the onus will be on Badenoch and her team to convince voters, policy experts and, ultimately, the markets that the overall agenda is deliverable.