Captain Kemi needs ‘an army' but business not yet keen to follow her over the top
There was not much headroom, fiscal or otherwise, as the Tory leader spoke on the economy in the cramped basement of a City hotel. The ceiling was low but Kemi Badenoch's hopes were high as she addressed a conference of bankers who seemed under-enthused by the Chancellor's spending review.
Tax Freedom Day, the point of the year when we stop working for the Exchequer, had just dawned, six days later than last year, and there was little sign of relief. The Institute for Fiscal Studies warned that Rachel Reeves was a 'gnat's whisker' away from having to hike taxes and most gnats are asking for the No 1 clippers these days.
Add the grim news of GDP falling by 0.3 per cent in April, and the Chancellor's breakfast media round had been like someone trying to sing Good Vibrations to the tune of Beethoven's Funeral March.
Speaking from a hospital surrounded by diagnostic equipment (all wisely unplugged to avoid images of flatlining) Reeves insisted she is 'determined' to deliver growth and that GDP is 'volatile'. This is the same Reeves who demanded an emergency Budget in 2022, when GDP fell by 0.1 per cent on the Tory watch.
It was not a bad time, therefore, for a Conservative to remind those in the City who their friends are. Badenoch had come to play FTSE with financiers, but she began with a nostra culpa. She admitted the Tories had left a ropey economy – blame Covid, blame Putin, blame the Treasury, don't blame me – 'but it was not this bad'. Productivity, she added, was 'stuck in first gear' and London was experiencing the greatest exodus of wealth of any city save Moscow. She pronounced it the American way to rhyme with cow.
Labour don't 'get' business because hardly any of them have a background in it, she added, which may be true but only one of the Beach Boys knew how to surf. Reform, she contended, was running a scam. 'No one is making the argument for business any more except me and my party,' she said. 'Business is a good, in and of itself, and it pays for everything.' Especially, she hoped, at that night's Tory donors' summer party.
Their tummies suitably tickled, Badenoch then returned to bashing the Government, saying that borrowing is so high there is a 'significant risk of a death spiral' and that Labour is pessimistically pursuing a path of managed decline, exacerbated by a compliance culture that strangles innovation.
So far so punchy, but what would she do better? Badenoch's shirt cuffs were unbuttoned but she had little up her sleeves. Her opposition to VAT on school fees was reprised and she promised to 'reverse changes to APR and BPR' (agricultural and business property relief), thus giving CPR to the economy. Beyond that, she had nothing. It is, to be fair, early in the parliament for policy.
What she most wants now are allies ('Quite frankly, we need an army.') 'I'm on your side,' she told them, 'but I need you to be on mine too. You can't sit back and hope that someone else is coming along to fix this. You need to speak up. Don't just wait for other politicians to do it. You need to get on the pitch too.'
Building to her conclusion with a plea for ideas, Captain Kemi hit a poetic, if metrically flawed, note. 'Back us, put your name to the cause,' she said, 'for we're not going to turn the country around with quiet applause.'
She then left the stage to quiet applause. The pin-striped army liked her tone, but they are not quite ready to follow her over the top.
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