Five Takeaways from Conservative Party Conference

The Conservative Party’s annual conference which concluded this week was much-watched this year, for many reasons: it represented Liz Truss’ first party conference as Prime Minister; it followed a ‘mini-Budget’ in which significant fiscal policy changes were announced; and it represented a chance to gauge party support for the new Government’s Growth Plan, ahead of Parliament’s return next week.

The conference was also an opportunity for Truss, Chancellor Kwasi Kwarteng, and their Cabinet colleagues to present further flagship policies and announcements which they hope will characterise their government.

Above all, growth was framed as the key enabler of public services. Without growth, argued the Chancellor in his speech to conference, Britain could not sustain the same public services needed and cherished by the British public.

Below, we outline five key public service policy takeaways from the 2022 Conservative Party Conference.

1. Funding public services through growth

Despite the reversal during conference of the planned abolition of the top 45% income tax rate, the Prime Minister made abundantly clear during her keynote speech that ‘growth, growth, growth’ remained her priority. Growth, Truss said, had historically been the UK’s route to funding public services, and by pursuing a pro-growth agenda, she declared her government was securing the future of Britain’s public services[1]. Her Chancellor had, two days prior, expressed similar sentiments, arguing that only a strong economy could deliver well-funded public services. Kwarteng also pledged to create the conditions for UK business to thrive, with lower taxes they would create jobs, raise wages and ‘contribute more to public services’[2]. With these announcements, Truss and Kwarteng made plain the fact that growth, rather than higher taxation, will be the enabler funding public services under their administration.

2. Public spending cuts

The fiscal statement of 23 September entailed a significant increase to state spending: this, combined with the Energy Price Guarantee which has frozen power bills at £2,500 for two years, means government borrowing is on track to reach £190 billion this year[3]. With both Truss and Kwarteng emphasising their commitment to fiscal responsibility, it would appear the Government is preparing to make significant reductions to public spending to balance the books and fund the permanent tax cuts announced in the fiscal statement: indeed, Levelling Up Secretary Simon Clarke last week spoke of the need for government departments to ‘trim the fat’, reduce the welfare state and align public spending with the Government’s pro-growth aspirations[4].

3. Immigration: a harder line

Home Secretary Suella Braverman has made no secret of her ambition to bring down illegal immigration: at conference, she reaffirmed her support for the Rwanda resettlement scheme and for ending the European Court of Human Rights’ jurisdiction over British immigration policy, and pledged legislation to ensure nobody arriving in the UK illegally would be eligible for asylum[5]. However, Braverman also signalled a change in policy from the previous Government in regard to legal migration, saying that it was her ‘ultimate aspiration’ to achieve former Prime Minister David Cameron’s objective of reducing annual net migration to below 100,000. Braverman also suggested her Home Office would seek to limit the number of low-skilled workers legally entering the UK[6].

4. Defence

Defence Secretary Ben Wallace’s conference speech was focused chiefly on the threat from Russia. Condemning the Kremlin’s illegal annexation of parts of eastern Ukraine, he warned of the danger Vladimir Putin posed to the West, and promised that the UK would always stand by Ukraine, sentiments later echoed by Truss in her conference speech. To that end, Wallace pledged that Britain would train 20-30,000 Ukrainian troops in the next year. However, British security was also touched upon: Wallace revealed that the UK Government had acquired two specialist ships to defend British infrastructure, pipelines and cables from the kind of ‘mysterious’ damage done to the Nordstream pipelines. He restated his commitment to cost-of-living support for the men and women of the Armed Forces, pointing to the newly introduced free childcare and cap on rent increases for service personnel. And, above all, he reaffirmed the Government’s commitment to increasing defence spending to 3% of GDP by 2030. The message on defence, therefore, would appear to be one of continuity, with Britain continuing to support Ukraine, servicepeople and boost defence spending[7].

5. Health

Health Secretary Thérèse Coffey restated her department’s focus on ‘ABCD’: Ambulances, Backlogs, Care, and Doctors & Dentists. She outlined work to rapidly expand the NHS workforce by allowing unretiring doctors to continue to practise, reforming NHS pension arrangements, expanding accreditation for clinicians and dentists, and recruiting 50,000 more nurses by 2024. Coffey promised also to shorten ambulance waiting times by increasing the number of 999 call handlers and maintaining a ‘laser-like focus’ on the most challenged NHS trusts. Finally, she pledged £500 million to enable cooperation between local authorities and NHS trusts to handle delayed discharges and expedite the rollout of community diagnostic centres[8].

Despite the Government’s shelving of plans to axe the 45% income tax rate, the message from conference was clear: Liz Truss and her ministers will relentlessly focus on economic growth and free markets. In doing so, they revealed their vision of a UK in which public services are funded by growth rather than taxes on individuals and corporations. But economic growth takes time to materialise: in the meanwhile, with the Chancellor determined to see government debt falling in the medium term, savings of between £37-47 billion will need to be made, similar to the cuts made under former Chancellor George Osborne’s austerity programme. Some commentators, such as Nick Davies at the Institute for Government, have warned that there exist few opportunities for efficiency savings without endangering public services’ ability to keep pace with demand[9].

However, there is another way. Independent research by Capital Economics for the Serco Institute has found that applying 5-15% savings across all UK government services not currently subject to competition could save the taxpayer £29-86 billion; moreover, raising UK spending on procurement to similar levels to OECD countries such as the Netherlands could save the Government £5-15 billion annually[10]. With ministers looking to cut departmental spending, savings on government services in these amounts should not be dismissed.