Issue fourteen | Conservative Conference 2026: Tax Cuts & Renewal 

The Conservatives came to Birmingham knowing that the political initiative currently sits elsewhere. Ten weeks into Andy Burnham’s premiership, Labour’s conference offered a hopeful programme, and the Conservative response was to present themselves as the party of fiscal discipline. Kemi Badenoch’s task was to show that a party third in the polls can be a credible alternative government.

 

The party entered conference on 19.3%, behind Reform UK on 23.3% and Labour on 27.1%. Within the conference hall, the mood was more upbeat than at last year’s Manchester conference, which many attendees remember as flat. Badenoch made much of the 50% increase in young attendees, arguing they put the ‘party’ in Conservative party. As Badenoch’s closing speech enforced, there was little appetite for reconciliation with Reform: former Tories who have defected were widely dismissed as “turncoats”, a view Badenoch shares, which rules out any pact with Farage’s party.

 

Badenoch set the tone on Sunday. Her opening speech promised to transform the party into a movement with clear principles, a party that “knows what it stands for” and “who its people are”, going beyond changing individual policies. The policy offer was built around two ideas: principle and arithmetic. Badenoch launched a 95-page booklet of guiding principles, arguing that wealth must be created before it can be taxed or distributed and confining the state’s core role to defence, borders, public order, the rule of law and infrastructure. The “golden economic rule” supplies the discipline: half of every pound saved goes to deficit reduction and half to tax cuts and growth measures. It is a deliberate effort to avoid a Truss comparison. Andrew Griffith, in his first conference as Shadow Chancellor, promised to scrap at least one tax in every budget, beginning with Labour’s “mansion tax” on properties worth more than £2m, as well as the packaging tax. He also committed to deregulation, including scrapping the Future Homes Standard. The youth offer followed on Tuesday: halving employer national insurance for 21 to 24-year-olds, from 15% to 7.5%, at an estimated cost of £2.3bn.

 

The sharpest dividing line with Labour came on pensions. Burnham’s plan to adjust the triple lock to fund a national care service breaks the cross-party consensus. Griffith’s answer, “we are going to keep it”, is an open bid for the voters most likely to turn out. It is not a comfortable position for everyone in the party, with Jeremy Hunt and Tom Tugendhat each having questioned the lock’s sustainability, and Griffith himself having called it unfair in 2021.

 

Reaction has followed predictable lines. Labour called the package “fantasy economics” and noted that Griffith co-wrote the mini-budget, while Bridget Phillipson said the Conservatives have not learned a single lesson since 2024. Jenrick, now Reform’s shadow chancellor, dismissed the inheritance tax idea as a “desperate play” and offered a £15,000 personal allowance as a broader alternative. The more thoughtful criticism is about novelty. UnHerd noted that the Conservatives were third in the polls before last year’s stamp duty pledge and are third a year on, and described abolishing inheritance tax as a zombie policy. The question is whether a party that already offered a headline tax cut in Manchester can get a second hearing for the same approach, especially with Labour’s “unfunded” line already in circulation.

 

Timing is the final piece. Badenoch has warned that an early election would produce a hung parliament, and the polling gives her some support: a YouGov MRP before Labour’s conference put Labour on 241 seats, well short of a majority. The speculation in Westminster is whether Burnham goes in spring or waits, and the October Budget is the likely tell. A “steady as she goes” Budget would suggest an early poll, while one loaded with tax rises would point towards 2029. That affects the Conservatives directly. A later election gives Badenoch time to turn conference themes into a recovery for the party, and Labour’s most radical commitments will have to survive contact with the fiscal position first.

 

The Conservatives left Birmingham with a clear economic message. The test is whether the voters they need to win back are persuaded or whether they wait to see how Burnham’s agenda fares.

 

Badenoch’s back-to-basics pitch

Conservative leader Kemi Badenoch struck a passionate tone as she delivered her closing speech to the Conservative Party conference. She presented the Tories as the natural party of government, who had learned the mistakes of their last period in office, quashed infighting, and would take the fight to Labour and Reform at the next election. She declared that the Conservatives had learned from their mistakes in government, and even criticised past party figures who had ‘used the party to get elected and then betrayed our values’. She emphasised the unity of her shadow front bench, as compared to the division across her opponents, and presented the Conservatives as the ‘common sense party’ who would ‘unite the right’, pledging to bring wavering Reform voters ‘back home’ to the party.

 

Attacks on political opponents were particularly prevalent in Badenoch’s speech. Predictably, the brunt of it was directed against Labour, who Badenoch repeatedly claimed were trying to live in the past with their government intervention in the economy, business and job markets, in contrast to the Tories, who would ‘learn from the past, not live in the past’. She attacked for reopening the Brexit debate; for serving in Jeremy Corbyn’s shadow Cabinet; and for not mentioning defence spending, controlling borrowing, or cutting crime and illegal immigration in his conference speech. Reform also drew her ire; she attacked them for their donations scandals, before passionately decrying elements in Reform and the far-right who dismissed black England football players past and present for not being English and declaring that the Conservatives would never unite with them. Finally, on the third anniversary of the October 7 attacks, she attacked the Greens for their ‘Zionism is racism’ motion and affirmed the Conservatives’ support for Jewish people around the world.

 

The economic section of Badenoch’s speech was traditionally Conservative. She highlighted the need to bring the welfare bill down to pay for cutting the deficit and funding defence, and claimed that the Tories had identified £70 billion of savings, more than half of which would be used to cut the deficit. She pledged that the Tories would scrap business rates for high streets so that new businesses could open, thereby creating jobs. She also declared that reforms to the banking sector would release £450 billion of capital which could be invested back into the country. On employment, she pledged to scrap every ‘job-killing measure’ in the Employment Rights Act and to create a ‘get to work programme’ for students just out of school and university. This came with a pledge to cut interest on student loans and to half the jobs tax for under-25s. Perhaps most significantly, Badenoch announced that inheritance tax would not be paid on family homes and that couples could pass on £1 million tax-free; these measures, she claimed, would half the amount of people paying inheritance tax, and would be conducted with a view to abolishing inheritance tax in its entirety.

 

Badenoch’s speech also covered numerous other policy areas. On crime, she pledged that a Conservative government would build new prisons, creating 50,000 new spaces, and introduce tougher minimum sentencing for the worst crimes; and attributed the cases of Henry Nowak, Barnaby Webber, Grace O’Malley-Kumar, the Southport stabbings and the Manchester Arena bombing to institutional failure and lack of accountability. On defence, she announced that the UK under a Conservative government would build a new missile defence system, the ‘Brittania Shield’, modelled on Israel’s Iron Dome. On housing, as well as changing inheritance tax rules, she promised to slash regulation to encourage housebuilding and to abolish stamp duty. On energy, she announced new drilling sites in the North Sea and the building of new nuclear reactors, to be used alongside renewable energy to lower bills and transition the country away from importing fuel. There was little said on immigration apart from a pledge that illegal migrants would be deported; and she declared that military veterans would not face ‘malicious prosecutions’ for actions committed whilst on active duty. She committed the party to the defence of the realm, and overall tried to position the Tories as being trustworthy custodians of the economy and the country. Importantly, she did not mention the NHS or health more broadly once, beyond attacking Burnham for his National Care Service not being properly costed. There was also little mention of immigration and no detail on how a Tory government would deport illegal immigrants.

 

Overall, Badenoch’s address outlined a back-to-basics Conservative approach to government, advocating for a low-tax, low-spend path to growth that would attract investment and incentivise wealth creation. This was a speech with plenty of traditional conservative ‘red meat’ content on themes such as crime, defence and taxation designed to attract former Conservative voters who may have switched to Reform in 2024 General Election. Meanwhile, home county voters who may be attracted to the Lib Dems may be tempted back by the new announcements on inheritance tax and childcare cliff edge reform. Only time will tell whether Kemi Badenoch will be able to do enough to unite the former left and right wings of the Conservative Party of old to build a potential challenge to Labour’s current dominance at the top of the polls.

 

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