The Conservative Party has a bold agenda – but there’s a problem

A sharp remark about British complacency highlighted the immense challenge for Kemi Badenoch, when the leader of the nation’s Conservative Party sought to outline her mission in a major speech on Sunday.

Her warning in the address also underscored a grim outlook for the country.

Her message? “The money is not there.” Badenoch argued that the UK could simply not afford all the policies it would like to have and would have to cut its spending to suit the times.

This is not a popular position when families are being punished by rising prices and burdened by low wages. Many voters expect the government to help them by spending more on household assistance and subsidies.

But that did not stop Badenoch from attempting some “tough love” in her address to the annual Conservative Party conference. It was risky. It was also a contrast with Britain’s new prime minister, Andy Burnham, who used his address to the annual Labour Party conference one week ago to talk about spending increases, not cuts.

“We are the lucky generation,” Badenoch told the event in Birmingham on Sunday. “We didn’t have to deal with World War One or World War Two. We haven’t had many of the problems that previous generations did. Advancements in medical technology or just general technology have made life pretty comfortable.

“But I think that that is making us – across the West, to be honest, not just the UK – very complacent.”

One example, she said, was the plan under former prime minister Keir Starmer, who was removed in June, to settle the future of the Chagos Islands in the Indian Ocean (and the Diego Garcia base the UK shares with the United States) by agreeing to pay billions of dollars to Mauritius to “lease” the territory.

The problem? “This belief that we are rich because we are rich and we are always going to be rich,” Badenoch said. “So we can spend loads of money on foreign aid and we can give away the Chagos Islands and pay £35 billion ($66 billion) for it. And we can do all sorts of foolish and silly things because the money is just there. The money is not just there. We have to make the money so we can do everything else.”

Badenoch is yet to prove she can replace Burnham. She has led the Conservatives for about two years and made some small gains in the polls, but most of the attention on the right of the political spectrum goes to Nigel Farage and his anti-immigration party, Reform UK.

The Conservative leader does a good line in light mockery, however, and is trying to leap ahead of Farage when he is under scrutiny for accepting big donations from crypto investors. The latest YouGov survey showed 25 per cent of voters backed Reform, 24 per cent supported Labour and 19 per cent backed the Conservatives.

Badenoch, 46, is a departure from the mostly white, male leaders of the Conservative Party. She was born in London to Nigerian parents and initially raised in Nigeria before joining her mother, a professor, in the United States.

She was educated in the UK from the age of 16, went to university to study engineering and law, and became a software engineer. Active in Conservative politics since she was 25, Badenoch married Hamish Badenoch, a banker, when she was 32. They have two daughters and a son.

Her speech to the opening day of the Conservative conference came at a testing time for her and the party. Badenoch shone when she was skewering Starmer in parliament during his long slide towards resignation, but she has a harder task with Burnham. Put simply, she is now up against a much better communicator.

While she projects her policies with a smile, she is anathema to the progressive side of politics. She stands for cutting welfare, cancelling net-zero climate goals, easing the regulation of businesses and developing more oil and gas deposits.

On Sunday, she was especially pointed on migration. She argued that those who arrived should embrace British values so the country would maintain one shared culture. That language goes to the heart of the unease in Britain over the number of migrants, especially asylum seekers who arrive by boat in the English Channel.

“I don’t want lots of little ghettoes of separatist communities where they’re recreating the place that they came from,” she said. “That will ruin the United Kingdom. We’ve never had race-based citizenship in this country, but I do want to emphasise that British culture means something.”

Badenoch had no instant solutions in her address. In fact, one of her policy ideas is to widen the eligibility for childcare assistance – a new spending, not a saving. She had no plan to stop the boats in the English Channel, nor any thorough proposal on how to restrict migration without hurting economic growth.

What she had, instead, was an uncomfortable truth for the public: the country was not as rich as they thought. And she had a point.

At a household level, incomes have flatlined in the UK since the global financial crisis of 2008. Median wages have fallen over the period. Universal Credit, a government program that transfers money to seven million households, is one factor that is preventing families from going backwards.

About one quarter of all households now rely on this and other assistance to stay afloat. For a single young person, the baseline is £338.58 per month. It is higher for families, and there is some flexibility to work while receiving the assistance. Universal Credit cost £42.6 billion in the 2023 fiscal year and is forecast to reach £88.1 billion in 2029, according to the Office for Budget Responsibility.

At a national level, Britain remains one of the world’s advanced economies, but its budget is stretched. Public sector net debt is about £3 trillion, according to the Office of National Statistics, and the annual budget is in the red.

Debt interest payments are estimated to be £111.2 billion this year. At this rate, the country will soon spend more on the interest bill than on defence – which costs about £65.4 billion a year.

Australia also has these problems. The demand for spending outweighs the commitment to saving in Canberra each year. But the pressure in Britain is greater because the budget is weaker.

Badenoch is doing more than Burnham to highlight this problem. Will she come up with a solution? In her address on Sunday, she explicitly borrowed from former prime minister Margaret Thatcher, an iconic leader for the modern Conservatives, by issuing a manifesto for the next government.