The Conservative Party under Kemi Badenoch

[Cowley]

Now that Badenoch has been in charge of the party for a few weeks this seems like a good place to start a new thread.

How do we think things are going for her? Is she likely to go the distance to the next general election, or will she just end up being the filling between Sunak and someone else?

Keir Starmer and Kemi Badenoch's lunchtime sandwich split - BBC News

The Conservative leader says sandwiches are "not real food" while the PM says they are a British institution.

www.bbc.com

Some voters complain that politicians are all the same but now a clear difference has emerged between the two main party leaders.
In an interview with The Spectator, Conservative Party leader Kemi Badenoch said: "Lunch is for wimps. I have food brought in and I work and eat at the same time.
"There's no time... sometimes I will get a steak... I'm not a sandwich person. I don't think sandwiches are a real food, it's what you have for breakfast."
She added that she would "not touch bread if it's moist".

 

[Tracked]

The most memorable thing about her leadership so far has involved sandwiches

 

[zero]

Lunch is for wimps but she has a steak? How do you work while eating a steak? She doesn't think sandwiches are a real food but she has them for breakfast? What is that even supposed to mean?

 

[Cowley]

Lunch is for wimps but she has a steak? How do you work while eating a steak? She doesn't think sandwiches are a real food but she has them for breakfast? What is that even supposed to mean?

But what about the vegetables!

 

[MotCO]

A disappointing few weeks. She does not seem to make any impression at PMQs, with Starmer answering any question with 14 years bad management, difficult choices fictitious black hole, etc - maybe the Speaker should remind him he needs to answer questions.

She has shunned the limelight. She should be on every tv channel criticising the Government. She should have made Starmer squirm at the last PMQs by asking a question or two about farmers.

If the reason she is not visible is because she is trying to fix lots of things behind the scenes, she should say so. She should be being seen to lead. Instead a lot of the opposition to the government is coming from Reform.

Then the next issue is how does the right wing defeat Labour at the next election? Unless Reform and the Conservatives join forces, the right wing vote will be split again. Or, unless so many Tories move to Reform due to dislike of Kemi that Reform becomes the real Opposition.

The real problem could be is if this Government falls earlier than expected. Starmer is unpopular on a number of fronts - winter heating allowance, farmers, energy costs, freebies, possibly Europe, and also the economy. I think that we will have a bad recession - we already have had two months of negative growth so soon after an improving economy, and the to-be-introduced NI increases and employment laws will negatively affect employment and public spending. If the money markets do not like what is happening, they will force up interest rates and make Government borrowing too expensive, so there will be a clash - do you continue to borrow at high rates, affecting mortgages and basically everything, or do you cut costs?

The money markets may do to Starmer what they did to Truss, so we could have an early election. The question is, will the Tories be ready by then?

 

[takno]

A disappointing few weeks. She does not seem to make any impression at PMQs, with Starmer answering any question with 14 years bad management, difficult choices fictitious black hole, etc - maybe the Speaker should remind him he needs to answer questions.

She has shunned the limelight. She should be on every tv channel criticising the Government. She should have made Starmer squirm at the last PMQs by asking a question or two about farmers.

If the reason she is not visible is because she is trying to fix lots of things behind the scenes, she should say so. She should be being seen to lead. Instead a lot of the opposition to the government is coming from Reform.

Then the next issue is how does the right wing defeat Labour at the next election? Unless Reform and the Conservatives join forces, the right wing vote will be split again. Or, unless so many Tories move to Reform due to dislike of Kemi that Reform becomes the real Opposition.

The real problem could be is if this Government falls earlier than expected. Starmer is unpopular on a number of fronts - winter heating allowance, farmers, energy costs, freebies, possibly Europe, and also the economy. I think that we will have a bad recession - we already have had two months of negative growth so soon after an improving economy, and the to-be-introduced NI increases and employment laws will negatively affect employment and public spending. If the money markets do not like what is happening, they will force up interest rates and make Government borrowing too expensive, so there will be a clash - do you continue to borrow at high rates, affecting mortgages and basically everything, or do you cut costs?

The money markets may do to Starmer what they did to Truss, so we could have an early election. The question is, will the Tories be ready by then?

I understand your concern, but a couple of months of slight contractions aren't actually a significant move from the previous bouncing around zero growth. They don't point towards a recession, bad or otherwise, and they certainly shouldn't lead to expectations of interest rate rises - if anything the pressure on interest rates will be the other way.

Furthermore, mass defections from the Tories would be more likely to make the Lib-Dems the official as well as the de-facto opposition, and the huge Labour majority means that while a change of leader (or more like chancellor) could happen, an early election is phenomenally unlikely.

Personally I doubt the Tories have it in them to be ready by the next election whenever it is. It will be genuinely interesting to see what replaces them.

 

[Gloster]

But what about the vegetables!

Oh, the Shadow Cabinet will do what she tells them…possibly.

(This joke, excluding the rider, was previously used about Margaret Thatcher in Spitting Image and elsewhere.)

 

[brad465]

Then the next issue is how does the right wing defeat Labour at the next election? Unless Reform and the Conservatives join forces, the right wing vote will be split again. Or, unless so many Tories move to Reform due to dislike of Kemi that Reform becomes the real Opposition.

Apparently some form of pact has been occurring in council by-elections and may well do in the next local elections between these two. However, a formal pact at the next general election will be much harder to pursue: they will have to agree who stands down for who, and they also assume all voters of Reform would have voted Tory were Reform not on the ballot, and all Tory voters would vote Reform were the Tories not on the ballot. This is not the case. Reform also contains some previous Labour voters and some otherwise non-voters. Likewise, moderate Tories could easily go to the Lib Dems or stay at home rather than vote for Reform. The Lib Dems could actually benefit from a Tory-Reform pact in certain seats.

I would say the forgotten area of voting behaviour when looking at party vote swings is who stays at home when; convincing voters of a particular party to stay at home is easier than convincing them to switch vote entirely. At political party level they will be well aware of this, this a major reason why they attack opponents more than promote themselves. Therefore, in the case of the Tory-Reform vote share, I wouldn't be surprised if the Tories lost more votes to abstentions than to Reform, and Reform gained more from previous abstentions than they did from the Tories.

 

[nw1]

Lunch is for wimps but she has a steak? How do you work while eating a steak? She doesn't think sandwiches are a real food but she has them for breakfast? What is that even supposed to mean?

No idea what she actually does about lunch, but if she really is tucking into a steak, I doubt much work would get done.

 

[takno]

Weirdly the steak vs sandwiches thing is one thing i broadly agree with her about. Bread is a weird combination of not very healthy and utterly joyless, and even if it requires a minute of extra time to use cutlery it's always better to have a real meal.

That said, toasties are probably the most acceptable way to eat bread, so I quite like the government position too. I don't think there's any clear blue water available in this debate, however important it may seem.

 

[MotCO]

I understand your concern, but a couple of months of slight contractions aren't actually a significant move from the previous bouncing around zero growth. They don't point towards a recession, bad or otherwise, and they certainly shouldn't lead to expectations of interest rate rises - if anything the pressure on interest rates will be the other way.

I think the issue was the Budget. Yes, there were lots of spending projects, which will help boost the economy, but the downside is that there were lots of costs placed on the ability to deliver those projects. The increase in NI rates, plus the lowering of the threshold at which NI is applicable, adds considerably to staffing costs, and could put many off employing or replacing staff. Higher wage costs feed through to inflation on consumables, including food. If wages do not rise (with their attendant problems), then consumer spending will reduce. If farmers lose the IHT fight, this could lead to higher food prices to recover the extra costs, ditto the extra tax placed on fertilizer. Energy costs are going up. Business confidence is falling.

I can only see inflation, not real growth in the economy. I thought that GPD was better than it actually was (a high of 0.5% in March, dropping to 0.2% in May and August, and 0.0% in June and July), but it is in negative territory (but it is often revised upwards). Negative business confidence should lead to interest rate cuts, but high inflation will prevent that.

 

[Magdalia]

I thought that GPD was better than it actually was (a high of 0.5% in March, dropping to 0.2% in May and August, and 0.0% in June and July), but it is in negative territory (but it is often revised upwards).

The monthly GDP growth numbers are provisional based on limited data that is available quickly. What really happened in 2024 won't be known until this time next year, or later. Month on month GDP growth (or not) is a small difference between two very big numbers, most of these monthly movements are within the margins of statistical error.

How many people are fretting over the monthly movements in 2023 now? In a year's time these tiny differences in monthly figures in 2024 will be forgotten about and people will be obsessing about tiny differences in the months of 2025 instead.

What's going to matter is how 2028 compares with 2024. Very little of what the government has done so far, or is planning in the next 2 years, has had any impact yet, but will impact on 2028.

There are 2 exceptions to that. One is that the "mood music" leading up to the budget was rather gloomy. This may have led, at the margin, to people postponing or accelerating various economic decisions, with an immediate impact on economic activity. But that is just a temporary thing and will soon be forgotten.

More important is that I think that the inflationary impact of the budget has been underestimated by many economic forecasters and commentators. This does mean the Bank of England acting more cautiously on lowering interest rates, and the international money markets being more cautious about what interest rate they want on lending money to the UK government. That has a more lasting impact on prospects for future growth.

 

[simonw]

I think the issue was the Budget. Yes, there were lots of spending projects, which will help boost the economy, but the downside is that there were lots of costs placed on the ability to deliver those projects. The increase in NI rates, plus the lowering of the threshold at which NI is applicable, adds considerably to staffing costs, and could put many off employing or replacing staff. Higher wage costs feed through to inflation on consumables, including food. If wages do not rise (with their attendant problems), then consumer spending will reduce. If farmers lose the IHT fight, this could lead to higher food prices to recover the extra costs, ditto the extra tax placed on fertilizer. Energy costs are going up. Business confidence is falling.

I can only see inflation, not real growth in the economy. I thought that GPD was better than it actually was (a high of 0.5% in March, dropping to 0.2% in May and August, and 0.0% in June and July), but it is in negative territory (but it is often revised upwards). Negative business confidence should lead to interest rate cuts, but high inflation will prevent that.

IHT will have zero impact on food costs, it might actually lead to a fall in the value of farm land as it will be a less effective shelter for the likes of Clarkson. Falling farm prices, might actually be a good thing.

 

[43096]

Oh, the Shadow Cabinet will do what she tells them…possibly.

(This joke, excluding the rider, was previously used about Margaret Thatcher in Spitting Image and elsewhere.)

The classic Spitting Image scene:

 

[MotCO]

IHT will have zero impact on food costs, it might actually lead to a fall in the value of farm land as it will be a less effective shelter for the likes of Clarkson. Falling farm prices, might actually be a good thing.

Harry's Farm is probably a better source than Clarkson's.

He farms around 1000 acres in the Cotswolds, and made a profit in 2024 before drawings and depreciation of only £32,190. How is he going to pay IHT out of those profits? If IHT forces land prices down, he will have to sell more land to pay the tax, and the farm becomes even less profitable. The alternative is for him to charge more for his produce to pay or provide for future IHT, which will put up food prices.

(And land is only one element of his assets. Add in combine harvesters, buildings, tractors etc, and the IHT threshold is soon reached.)

 

[Yew]

Harry's Farm is probably a better source than Clarkson's.

He farms around 1000 acres in the Cotswolds, and made a profit in 2024 before drawings and depreciation of only £32,190. How is he going to pay IHT out of those profits? If IHT forces land prices down, he will have to sell more land to pay the tax, and the farm becomes even less profitable. The alternative is for him to charge more for his produce to pay or provide for future IHT, which will put up food prices.

(And land is only one element of his assets. Add in combine harvesters, buildings, tractors etc, and the IHT threshold is soon reached.)

How many of his business expenses would be considered as personal expenses by most ordinary folk?

 

[43096]

Harry's Farm is probably a better source than Clarkson's.

He farms around 1000 acres in the Cotswolds, and made a profit in 2024 before drawings and depreciation of only £32,190. How is he going to pay IHT out of those profits? If IHT forces land prices down, he will have to sell more land to pay the tax, and the farm becomes even less profitable. The alternative is for him to charge more for his produce to pay or provide for future IHT, which will put up food prices.

(And land is only one element of his assets. Add in combine harvesters, buildings, tractors etc, and the IHT threshold is soon reached.)

How does any other business that is passed down deal with paying IHT?

 

[Ted633]

Harry's Farm is probably a better source than Clarkson's.

He farms around 1000 acres in the Cotswolds, and made a profit in 2024 before drawings and depreciation of only £32,190. How is he going to pay IHT out of those profits? If IHT forces land prices down, he will have to sell more land to pay the tax, and the farm becomes even less profitable. The alternative is for him to charge more for his produce to pay or provide for future IHT, which will put up food prices.

(And land is only one element of his assets. Add in combine harvesters, buildings, tractors etc, and the IHT threshold is soon reached.)

Lower land prices will mean the farm is worth less in total, so less IHT will be due in the first place. May even bring the farm below the threshold.

As for other assets, things like combines (expensive and only used for a short period) are normally leased and wouldn’t come into it

 

[simonw]

Harry's Farm is probably a better source than Clarkson's.

He farms around 1000 acres in the Cotswolds, and made a profit in 2024 before drawings and depreciation of only £32,190. How is he going to pay IHT out of those profits? If IHT forces land prices down, he will have to sell more land to pay the tax, and the farm becomes even less profitable. The alternative is for him to charge more for his produce to pay or provide for future IHT, which will put up food prices.

(And land is only one element of his assets. Add in combine harvesters, buildings, tractors etc, and the IHT threshold is soon reached.)

If he is really making £32k then the 1000 acres should have a value of less than £0.5m give or take. The fact that agriculture land is valued at multiples of earnings in excess of this shows it's value is driven not by farming economics but by tax avoidance schemes.

If non farmers,can no longer use it to avoid tax on an industrial scale, it's value will fall.

 

[Harpo]

The most memorable thing about her leadership so far has involved sandwiches

It’s not a great start at connecting with less affluent voters who doubtless consider steak to be an unaffordable luxury let alone a regular lunchtime item.

 

[MotCO]

If he is really making £32k then the 1000 acres should have a value of less than £0.5m give or take.

How do you make that assumption? Farms are traditionally asset rich but cash poor.

 

[simonw]

How do you make that assumption? Farms are traditionally asset rich but cash poor.

Because why would you hold an asset worth millions of it only returns £32k per year? An asset is, generally, valued at the current value of the future cashflow it will generate. £32k equates to an asset value of around £500k, give or take.

 

[MotCO]

Because why would you hold an asset worth millions of it only returns £32k per year? An asset is, generally, valued at the current value of the future cashflow it will generate. £32k equates to an asset value of around £500k, give or take.

That's what makes farming different from other industries.

 

[simonw]

That's what makes farming different from other industries.

Sorry, That sentence makes no sense. Go back and land prices reflected the return they generated Making land a tax haven drove up the price, this shouldn't have been allowed.

 

[Yew]

If non farmers,can no longer use it to avoid tax on an industrial scale, it's value will fall.

I am rather interested to see how that works out in practice. I'm hoping that land values fall without any obvious downsides?

 

[edwin_m]

I am rather interested to see how that works out in practice. I'm hoping that land values fall without any obvious downsides?

Seeing as the genuine farmers are looking to pass it on to their descendents rather than selling, does that actually matter?

 

[jfollows]

Badenoch is in denial and leading a party which is denial about why it lost the last election. Yes, the system makes Labour’s victory appear bigger than it was, but it was about voting against the Conservatives for many people, who won’t go back to voting for them unless they acknowledge their mistakes and do something about it. Rishi Sunak didn’t do the same, either, he could have run with a narrative of being different to Boris Johnson but he appeared too scared to do this.

In due course someone will come along and yank the party out of the mire, but that’s not going to be Badenoch.

 

[SteveP29]

Harry's Farm is probably a better source than Clarkson's.

He farms around 1000 acres in the Cotswolds, and made a profit in 2024 before drawings and depreciation of only £32,190. How is he going to pay IHT out of those profits? If IHT forces land prices down, he will have to sell more land to pay the tax, and the farm becomes even less profitable. The alternative is for him to charge more for his produce to pay or provide for future IHT, which will put up food prices.

(And land is only one element of his assets. Add in combine harvesters, buildings, tractors etc, and the IHT threshold is soon reached.)

Your post seems to suggest that this is a year on year tax that is permanently payable.
Inheritance tax will only become payable on change of ownership via death.

As has been suggested, a farm that makes only £32k profit per year is unlikely to fall within the bracket of IHT being payable, unless there are hundreds of hectares of land that are and have lain fallow for years

 

[takno]

Your post seems to suggest that this is a year on year tax that is permanently payable.
Inheritance tax will only become payable on change of ownership via death.

As has been suggested, a farm that makes only £32k profit per year is unlikely to fall within the bracket of IHT being payable, unless there are hundreds of hectares of land that are and have lain fallow for years

The assumption is that people subject to paying the tax will do so over 10 years, since that's allowed with certain illiquid assets like farms and private companies.

Part of the problem is that a large part of the reason for inheritance tax is to stop wealth forming over generations in rich families. For things like large family businesses the point of that is to give the descendants a bit of time to sell off part of the business or bring in external investors.

Advisors aren't generally pitching it that way though - they're essentially recommending that clients expect to cover it by taking an additional 2% out of the business every year for 10 years. This leads to a very simple, very false and very damaging calculation which anybody can do to give themselves a misleading impression of how much tax their descendants might have to pay in the future.

In farming terms the essential problem is that farmland has pretty arbitrary values based on the fact that very little of it is bought and sold, and most of what is being sold is being sold as an arbitrary asset for tax avoidance or land for development, both of which command completely arbitrary prices which are nothing to do with the underlying value. This has been compounded over time because in the absence of IHT there has been very little reason to ascribe realistic valuations to untraded land.

What is likely to happen is that over the next 2-3 years farms which don't have great development potential will start to receive more realistic valuations. There is an ongoing potential issue with farms in areas with development potential, but ultimately they are mostly not going to be there in 2 generations anyway, regardless of the inheritance tax, and the descendants of the current owners are not going to be losing out financially.

 

[Tetragon213]

Ah yes, attacking the British institution that is the sandwich and talking about having someone bring you steaks for lunch. Badenoch is sure to win back working class voters this way by being so in touch with them!