On the 5th of July 2024, members of the British Conservative Party, or Tory Party, woke up to their biggest-ever general election defeat. Under the leadership of Prime Minister Rishi Sunak, the parliamentary party was reduced to a rump of 121 seats, merely a third of the 365 seats they earned in the 2019 election. A triumphant Labour Party won 412 seats, and Sunak immediately announced he was stepping down from the leadership post, triggering a contest to replace him.
To understand where this leaves the Tories and where they may go from here, one must understand the Party and its history. The Conservative Party is one of the most ruthless election-winning machines in world politics. The core tenets of the party’s values are a commitment to low taxation, limited government, and support of private enterprise. However, the party has always been able to respond to shifts in the public debate. When Clement Attlee’s Labour government established the welfare state in the late 1940s, the Tories accepted this and did not significantly deviate from the post-war consensus until Margaret Thatcher’s premiership in the 1980s. A consequence of the Tories’ ideological malleability is that the party is not a monolith. Broadly speaking, it is an alliance of a center-right ‘One-Nation’ faction and right-wing factions that tend to be more anti-EU and anti-immigration.
Because of Britain’s First Past the Post (FPTP) electoral system, the alliance between these factions has been vital to the Tories’ success. In FPTP, candidates do not need majorities to win elections; they merely need a plurality of voters. Therefore, if the right wing was divided, parties from the left could slip through to victory even if a majority of voters favored various right-wing parties.
In the 2024 election, the Tories lost many of their seats precisely because of a breakdown in this alliance. Voters who were angered by the rise of illegal immigration under Sunak flocked to Nigel Farage’s hard-right Reform Party. Labour could just hold their vote share and watch Reform sap the Tories’ strength until Labour won with a plurality.
A majority of Tories think that the party should respond to the election defeat by moving rightwards and targeting Reform voters. Foremost of the advocates for shifting right is the winner of the leadership contest, former Business Secretary Kemi Badenoch. Badenoch beat former Immigration minister Robert Jenrick, who was also proposing a not too distinct move to the right, to the post of party leader.
During the leadership campaign, Badenoch did not commit herself to specific policy proposals but rather elected to state her first principles. She placed an emphasis on the government doing less and individuals taking more personal responsibility, saying that whatever policies she supports in the future will flow from these conservative political axioms.
Badenoch’s theory of the case was that the Tories had ‘talked right but governed left’, and that the party must return to its small-state and low-tax traditional values. In order to understand why Badenoch wants to move right, one must understand in what ways the Tories may have moved left in the run-up to the election.
When Badenoch says that the Tories ‘governed left,’ she is partly referring to the major expansion of the British state that occurred during and after the 2020 Covid pandemic. The country spent between £300-400 Billion on pandemic measures and the public debt as GDP rose by 11% between 2020-2022. To pay for these measures, then-Prime Minister Boris Johnson raised the national tax burden to the highest it had been since World War Two. He increased National Insurance Contributions, froze income tax thresholds, raised corporation tax from 19% to 25%, and imposed a windfall tax on gas producers. With both individuals and businesses seeing their taxes rise, the Tories strayed from their native turf of low taxation and support of private enterprise.
Commentators have noted that Badenoch, with her unyielding, confrontational approach and talk of reducing the size of the state, casts the shadow of Margaret Thatcher. If the raison d’etre of Badenoch’s leadership is to return conservatism to small-state principles, the Thatcher comparison is useful. After World War 2, the Tories and their rival, the Labour Party, settled on an informal post-war consensus. The two parties broadly accepted the welfare state, ownership of utilities, strong unions, and high taxation. It was Thatcher who shattered this consensus and ‘embarked on the business of throwing back the frontiers of state’. Tories in favor of a smaller state may be tempted to welcome Badenoch as Thatcher’s ideological heir.
However, there are key differences between the country when Thatcher was premier to its current state which complicate the historical parallel.
Firstly, a key means by which Thatcher shrunk the state was via privatization of publicly-held industries such as energy, water and steel. However, these industries remain privatized, and one cannot sell the state twice. Therefore, privatization, a significant method in Thatcher’s shrinking of the state, is not readily available to Badenoch.
There has also been a development of the relationship between the state and the individual since Thatcher left office. Nowadays, the contours of the British state are defined not so much by its ownership of industries but by its gigantic spending on healthcare and the welfare system. Spending on healthcare as a percent of GDP has doubled from 5% to 10% between the Thatcher era and now. Health-related benefits alone have increased by 25% since before the pandemic. Given Britain’s aging and ailing population, this strain on the public purse does not appear to be going away anytime soon.
This change in relationship suggests a political messaging problem for Badenoch’s small-statism. When Thatcher transferred industry from public hands to private citizens, she did so under the banner of ‘popular capitalism.’ Thatcher branded a smaller state as an empowerment of citizens through the democratizing effects of widespread private ownership. Look at the famous ‘Tell Sid’ advertisement, which encouraged individuals to buy British Gas shares, or the ‘Right to Buy’ scheme, which propelled people without property to become homeowners, and you see a potent political sell. Thatcher’s Treasury received money by selling these assets and citizens acquired assets; thus, she could market the exchange as a productive one for state and citizen alike. However, in 2024, shrinking the state is a radically different proposition to the individual. Now, rolling back the state would mean rescinding healthcare and welfare services that citizens have already come to expect.
Arguably, the expanded NHS and welfare state have become irrevocably entrenched in the public mind. Just a quick look into recent Tory history suggests this. In the summer of 2020, Rishi Sunak was the Chancellor of the Exchequer with sky-high popularity. He personally signed tweets boasting of his furlough scheme that paid people during lockdown and his ‘Eat Out to Help Out’ restaurant subsidy scheme. However, when Sunak eventually slowed the flow of money going directly to the public and raised taxes to be able to pay for this spending, unsurprisingly, his popularity plummeted. People tend to prefer governments that are writing them checks to ones that are collecting more taxes.
Another sign of a permanently expanded British state came in the run-up to the winter of 2022. Amidst the ‘cost of living’ crisis, inflation was at 11.2%, and the typical British household was projected to have to pay an increase of £1600 in energy prices. Then, Prime Minister Liz Truss, known as a hardline Thatcherite, decided to cap energy prices to limit the financial hurt caused by these price increases. This decision cost the treasury about £150 billion, most of which came from borrowing. The fact that Truss chose to stage this interventionist policy against all the values she insisted on representing shows how deeply entrenched welfarism had become in British politics.
If welfare spending would be hard to reduce, cuts to health spending would be a nearly impossible political sell. During the pandemic, the NHS was revered as a national institution for its service in a time of crisis. People would leave their houses every Thursday to ‘clap for our carers’ in a quasi-religious ritual. This was reflected in the political debate where trying to fortify the creaking NHS became a key national mission for both main political parties.
Perhaps nothing indicates the NHS’s political preeminence like the Reform Party’s 2024 campaign commitment to increase NHS spending by £17 billion, far more than was proposed by any other political party. This fiscal liberalism from a hard-right party constitutes an ideological fracture within British conservatism. Right-wing parties no longer align neatly on an economic axis where to be more frugal is to be more right-wing. If Badenoch truly wants to win back the right wing voters who flocked to Reform, she must also contend with their stalwart support in NHS funding. Proposing significant spending cuts may be a return to a politics which no longer exists.
All of this is to suggest the scale of the challenge Badenoch has set herself. With Thatcherite values, she wants to shrink the state. However, it is not clear that there exists an appetite in the British electorate for the sort of spending cuts that would constitute a smaller state.
Perhaps, Badenoch’s smaller state would revise Britain’s climate regulation. She has been vocal about her opposition to Britain’s targets to reduce carbon emissions in the past, and she could argue that weakening these targets would reap economic rewards. However, is a less ambitious climate policy a serious policy in a country where the vast majority of people say they worry about climate change? A campaign for the future of Britain that rallied for weaker climate targets could easily become tonally dissonant.
So, Badenoch is committed to returning the Tories to a conservatism that taxes less, spends less, and intervenes less with businesses. And while those are things that can certainly be done by degrees, it seems that the British public is not primed for the paradigm-shattering shrinking of the state that she seeks. By steering the party back towards its ideals of a long-gone yesterday, Badenoch is forgetting her party’s historic strength: its ability to move with the times.
Featured Image: Getty Images/Dan Kitwood
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