Kemi Badenoch pledges to abolish stamp duty: Is it ‘fantasy economics’?
Kemi Badenoch has promised the Tories will end Stamp Duty if they win the next election – but was this just a pledge to get conference attendees fired up?
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In brief:
- Kemi Badenoch announced a surprise policy to abolish stamp duty at the Conservative Party conference, calling it an "unconservative tax" and receiving a standing ovation, though details on funding the estimated £11 billion cost remain unclear.
- The News Agents say the policy might be "fantasy economics", as the Conservatives would need to find significant savings to fund it - but being so far from power, it’s a problem Badenoch would like to have.
- The speech marked a strategic shift toward traditional Conservative economic messaging - an area where Conservatives surprisingly still lead Labour and Reform in voter trust despite their failings.
What’s the story?
Kemi Badenoch has promised to abolish stamp duty, if the Conservatives win the next general election, calling it an “unconservative tax”.
“A society where no one can afford to buy or move is a society where social mobility is dead,” she told the crowd during her speech at the Conservative Party conference in Manchester.
The decision to make this surprise policy announcement came very late, Emily Maitlis reports, with Badenoch and shadow chancellor Mel Stride deciding upon it only in the last few days as they searched for a “wow factor” tax cut to deliver at conference.
In the room, the announcement appeared to have the desired effect, being met with applause and a standing ovation, even if there were still gaps in how it would be delivered.
“We didn't get the figures of exactly where that money was coming from, but it was a mood changer,” Emily Maitlis says from the floor of the conference.
“It was something big enough for people to get to their feet again and say the Conservatives are back.”
How will the Conservatives pay for abolishing stamp duty?
There’s no doubt a policy that can save people thousands of pounds will prove popular, but the cost to the government will be huge, with Emily estimating it could reach £11 billion.
This could, in part, be accounted for with savings made from other cuts the party has promised, for example from the civil service, the welfare state and foreign aid - but is it enough?
“Everyone is trying to find £50 billion down the back of the sofa. You might find a few hairpins, but you're not going to find money like that,” Jon Sopel says.
The risk is that people recognise those figures don’t quite add up, and perceive Badenoch’s ideas as “fantasy economics”.
But fantasy economics might be a viable option for the Tories right now - who are so far from leading the polls, or a general election, that the chances of them having to make the costs work are slim.
“I think the way that Kemi Badenoch would think, is that if she's ever in a position where she actually has to make these numbers add up, that will be a really nice problem to have,” Lewis Goodall says.
“They are so distant from that prospect politically, both in time and political space, that frankly it's not a problem for today.”
Emily agrees that right now the Tories priority was to “scream something you can’t ignore”, adding that Badenoch’s speech was saying “we’ll get to the maths later”.
Will Kemi Badenoch’s speech get the Tories back in the game?
If the task for Kemi Badenoch at conference was to try to prove that the Conservatives still have political relevance, and something to say, Jon and Lewis agree that the party leader achieved that.
They rate Banedonach’s speech as “impressive,” with the Tories policy announcements finally giving them some “definition” that separates them from Reform and Labour, who they trail in the polls.
Most noticeable in the speech was a pivot from Badenoch’s usual culture wars rhetoric which made her one of the “darlings of the Conservative Party” (although there were still some mentions), to a more traditional Conservative message of delivering on the economy.
“What she's done is to try and see a path through on classic Conservative territory, which is on the economy,” Lewis says.
This strategy has most likely come off the back of recent polling that shows - somewhat surprisingly after Liz Truss’ mini-budget - that on the economy, the conservatives actually retain a lead in trust from voters over Labour and over Reform.”
“They want to get back to remembering what Conservatives are, and what Conservatives do,” says Emily. “Badenoch had to find the thing that made everyone in the room feel that they had returned to a pure Conservative message.
“If that was what you wanted, you definitely got that.”