ON Monday at the Tory Conference, Shadow Chancellor Sir Mel Stride claimed to re-establish the party’s reputation for ‘fiscal prudence’. He promised £47billion per year in savings under a Conservative government.
Big deal! The government’s borrowing during the first year of Sir Keir Starmer’s administration was £151billion. Most of this borrowing must be cut because over two-thirds – £105billion – was spent on debt interest.
The Conservative Party missed an opportunity to steal the limelight from Reform UK as the radical reformers. Instead, the Tories prove once again to be followers and thieves. Stride promised to end asylum hotels, saving £3.5billion, which is what Reform UK already promised. He vowed to scrap council house subsidies for foreign nationals, saving up to £4billion – again as Reform promised.
And Stride’s pledge to reduce the foreign aid budget by £7billion is stolen from the Labour Party! Starmer’s administration has promised to cut foreign aid, as of 2027, from nearly 0.6 per cent to 0.3 per cent of Gross National Income, saving more than £6billion. The Conservatives aren’t cutting much more. There is more than £15billion still to cut, as of 2027.
Stride’s promise to stop welfare and benefits to foreign citizens is another policy stolen from Reform. He vows to stop welfare for ‘low-level mental health problems’ too. The total savings would be £23billion.
This is not good enough. In 2024/25 the United Kingdom spent £313billion on welfare, up from £297billion in the previous year. Welfare spending can and should be reduced. How do we know? Welfare and benefits are subsidising the income of more than half of Britons. That’s not justifiable or sustainable.
Why isn’t the Conservative Party boldly going after further savings? Probably because it doesn’t want to rekindle the slur that fairness and responsibility are uncaring.
Let’s tackle Stride’s final promise of savings. He would cut 132,000 civil servants, to save £8billion. I welcome the cut. The civil service has grown to a 20-year high, with 549,660 on the payroll at the end of March, up almost 7,000 on the same time last year.
That number includes plenty of shirkers who could be let go. Days lost to sickness and mental health in the Foreign Office in 2023-24 rose significantly on the previous year (51 and 77 per cent respectively). Let’s cut the ideologues too, and return the civil service to its apolitical roots.
But slashing the civil service is not enough. Where’s the Conservative re-commitment to ‘cut the quangos’, which employ almost as many people as the Civil Service? In the fiscal year 2023-24, 438 quangos received £376billion in government funding, on top of £36billion in non-governmental income. They are now responsible for almost one in every three pounds of government spending, and employ almost 500,000 staff who are practically unaccountable.
Here’s an eye-catching policy announcement! Cut all quangos.
To be clear, you wouldn’t save one in three pounds of government spending, because some of that money would be spent by agencies of government in place of quangos. Yet I can promise this: you’d have fewer agencies than quangos, and they would be more efficient because agencies are accountable to ministers.
But the Conservatives aren’t promising to cut any quangos. Why? Well, they would be repudiating many quangos that Conservative administrations created.
Additionally, the Conservatives are not cutting in certain segments: healthcare, the winter fuel allowance and pensions.
The NHS is trickiest, given the ideology that the progressives built around it. I excuse the Conservatives waiting to be in government before tackling its spending. I bet Thatcher would think the same.
But the winter fuel allowance can go. The party has already promised to repudiate Net Zero and to permit more fossil fuels.
Pensions are where the next government should focus: the second-biggest public expense after health spending.
Funding the state pension accounted for almost £140billion of public spending in the 2024-2025 financial year. This liability is growing. It will be three times more expensive by the end of this decade than originally envisaged.
The triple lock was introduced by the Con-Lib Dem coalition 15 years ago. It promised that the state pension will rise each spring by the greatest of 2.5 per cent, the previous September’s inflation rate, and the increase in average earnings registered over the previous summer. Currently, inflation is the greatest. This is fair to pensioners who would otherwise see their income devalued in real terms, but it’s not sustainable while revenues are rising slower than inflation.
Stride says the party remains ‘fully committed’ to the triple lock.
Britain’s state pension is not as generous in scale as most Western equivalents, but is more generous in entitlement. This naturally drives resentment from people who contribute in the form of National Insurance (an income tax) only to receive the same state pension as those who contribute nothing. This funding arrangement hardly encourages contributions, so the government ends up under-funding the liability and makes up the difference with borrowing.
For younger people, the government should tie the state pension to contributions. It should still protect the destitute with welfare if their contributions fall short. But the pension should rise with contributions. Paying the same pension to everybody, irrespective of contributions, is unfair.
Yet Stride, instead of warning the younger demographics that their entitlements must fall while their contributions go up, threw a tax giveaway at them, and one of no consequence. A ‘first-job bonus’ would divert £5,000 of National Insurance contributions into a savings account which could be used ‘towards a deposit on a first home . . . or towards savings for later life’. That’s peanuts compared with the cost of buying a home.
The Conservatives should help young people by cutting, de-regulating, privatising and incentivising with the zeal and specificity that Margaret Thatcher had worked out in opposition before she won the election in 1979.
But the Tories seem not to be Thatcherite, which seems strange given that Kemi Badenoch repeatedly identified with Thatcher when campaigning for party leadership, and at this week’s conference, and in between.
Reform, despite its contradictions, remains a more viable opposition party today, and government tomorrow, than the Conservatives.
