Eighteen years ago a Conservative tax policy changed the political weather. George Osborne’s promise to raise the inheritance tax threshold to £1m spooked Gordon Brown into ruling out an early election, a moment from which his premiership would never recover.
No one expects Kemi Badenoch’s pledge to abolish stamp duty to have a similarly transformative effect. But it has left Tory optimists wondering whether they have a route to recovery. The latest Opinium poll shows Badenoch’s net approval rating rising by eight points (albeit to -14) and perceptions of the Conservatives improving on every measure.
On the centenary of Margaret Thatcher’s birth – Boris Johnson is among those addressing a gala dinner tonight – Badenoch is trying to claim her mantle, branding her £9bn stamp duty policy the “Chance to Buy”. In reality, of course, a truly Thatcherite politician would be putting “sound money” before tax cuts at a time like this (VAT, recall, was increased from 8 per cent to 15 per cent in the 1979 Budget).
And Labour sees no reason to believe that the Tories could yet re-emerge as its main opponent. Strategists deride Badenoch’s tax pledge as a repeat of the “fantasy economics” offered by Liz Truss. “Their weaknesses haven’t been addressed, primarily that is about a failure to address their record in government, a failure to hold their hands up and to set out the mistakes they’ve made,” one tells me.
In other words, Labour believes Badenoch is failing to do the truly hard work of opposition. Once the sugar high from her conference speech recedes, the Conservative leader will still be left marooned by the legacy of Truss and Johnson.
Luke Tryl, the director of More in Common, notes another challenge for the Tories: “Can they keep up this level of cut-through? That’s hard when Starmer has the pulpit of government and Farage is a master of the attention economy.”
And the Reform leader, unlike Badenoch, is moving to neutralise his weaknesses. “At the next election, we will present a rigorous and fully-costed manifesto,” he told the Times, abandoning his past promise of £90bn in tax cuts. “Reform will never borrow to spend, as Labour and the Tories have done for so long; instead, we will ensure savings are made before implementing tax cuts.”
Here is yet another example of the great challenge facing Starmer: an opponent without a governing record. Farage might have praised Truss’s mini-Budget at the time as “the best Conservative budget since 1986” but he was not caught in the political wreckage. Brexit might have depressed economic growth, with higher spending and higher taxes resulting, but Farage was safely out of government.
A world in which the Tories fail to recover might give Labour some schadenfreude but it is also a far harder one to contend with.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[Further reading: What did Mrs Thatcher do to us?]
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