Kemi Badenoch, the leader of the Conservative Party, addressed the party conference with a significant economic policy announcement that signals a departure from recent Conservative approaches, reflecting an effort to both redefine fiscal responsibility and realign higher education priorities. Central to her speech was the introduction of a new "golden economic rule," which stipulates that half of all savings from planned government spending cuts will be directed towards reducing the national deficit, while the remaining half would be used to stimulate the economy via spending or tax cuts. This pledge follows the party’s commitment to slash £47 billion in public spending by restricting welfare provisions and downsizing the civil service.

Badenoch’s focus on fiscal discipline and economic stimulus through balanced spending signals an attempt to reassure voters concerned about borrowing while maintaining growth potential, echoing some principles from the era of David Cameron and George Osborne, although her wider policy framework notably departs from Cameron-era conservatism. For example, while Cameron’s government expanded university access by lifting caps on student numbers, Badenoch plans to reverse this, proposing to cut university places by approximately 100,000 annually. This would reintroduce student number controls across all subject areas, with a progressive reduction in courses that have consistently poor graduate outcomes, such as creative arts, languages, or sports science.

The Conservative Party claims this measure is necessary to address poor job prospects and high debt levels among graduates, referencing an analysis by the Institute of Fiscal Studies indicating that roughly 30% of graduates of both sexes have negative returns on their university investment. The policy aims to protect taxpayers by reducing the substantial loan repayment write-offs—currently over £7 billion a year in England—attributed to graduates earning too little to repay their student debt in full. The expected savings from this reduction in university places are to be reallocated to double funding for apprenticeships, thus shifting focus towards vocational training and practical skills development.

This announcement, however, has sparked significant criticism. The University and College Union (UCU), led by general secretary Jo Grady, described the policy as "economically illiterate," arguing that no country has ever achieved economic growth by cutting university places. Grady suggested that addressing the student debt burden should instead involve increased public funding, potentially supported by a wealth tax to ensure those who benefit most from higher education help contribute more toward its costs. This perspective highlights a fundamental divide in approaches to education funding and economic strategy between the Conservative leadership and its critics.

Badenoch’s speech, delivered on the final day of the Conservative conference, comes amid broader political tensions within the party, particularly surrounding the competition from Reform UK, which espouses more radical fiscal and immigration policies akin to Nigel Farage’s outlook. While Badenoch stresses fiscal responsibility and controlled public spending as differentiators, her main rival within the party, Robert Jenrick, appears to advocate for a more populist, expansive approach, intensifying internal debates over the party's future direction.

Beyond domestic policy, the political landscape remains active, with Labour leader Keir Starmer visiting India and engaging in political commentary, including critiques of members within the Conservative ranks. Meanwhile, in Scotland, the independence debate continues to be a pressing issue, with the Scottish First Minister John Swinney releasing a new paper on the subject.

Overall, Badenoch’s conference speech highlights a Conservative leadership grappling with the dual challenges of controlling public finances and reshaping key policy areas like education to align with a vision of economic prudence and altered social investment priorities.

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Source: Noah Wire Services