Labour’s big budget and Kemi Badenock’s victory reset politics

“This is like week zero,” one government insider said. There is a new Conservative leader today. Wednesday’s Budget is a huge one.

Add those two things together, and it feels like everything changes this week—the clock starts over again.

A cabinet member told me the tram line was now ready for the battle ahead. The Labor government now makes no secret of the big choices it has made, and the winners and losers they have chosen.

The new Conservative leader, Kemi Badenoch, has made no secret of what has hitherto been unsettling to the party’s softer fringes.

Perhaps we have entered a new era, where the fabled political heartland feels a bit empty and the divisions between the two major parties are more acute.

The consequences of the Budget are still unfolding, and the real effects won’t be felt for months. No major issues have arisen yet, but ministers are still very clear that they still need to explain this, which is why tomorrow morning you’ll see Chancellor Rachel Reeves in the studio with us, and today Labor is positive The elements went out to campaign.

If your doorbell rang this afternoon and it was a grinning man with a red rosette and a flyer, you’d know what they were up to.

The party knows these decisions, particularly the decision to impose billions on employers’ national insurance, are causing anxiety among some voters. This will also impact GP surgeries and charitieswhich shows people are worried about the cost of change – and that no government wants to go to war with them.

After promising not to raise National Insurance at the election, no minister was willing to defend a decision that many voters and their rivals saw as misguided.

The government rejects the charge, insisting it has only promised not to increase National Insurance contributions paid by employers rather than employees.

But Labor must understand what it feels like to be criticized. Indecision on major decisions can have politically disastrous consequences. In Downing Street, there is widespread confidence.

Insiders say No 10’s focus group – which has been asked about the Budget over the past few days – has understood the decisions, reporting some complaints but not much sign of anger.

A government source said: “People looked at the budget and said, ‘This makes sense’. This is the platform we can build on.

These decisions, and the government’s true motives, are now out in black and white. “This is the first time — certainly in government, probably in the entire program — that we’re able to show, not just tell,” the source said.

However, after Labor’s much chatter about business and their election emphasis on economic growth, it was somewhat surprising that these arguments were not as compelling on Wednesday.

Sources said the first phase will focus on public finances and public services, with subsequent parts putting more emphasis on economic growth, with Rachel Reeves due to deliver a major speech at City Hall soon.

One senior business leader told me, “They’ve done the first part very well in a more traditional Labor way, but to really take shape they need a very strong second part… to create vision, energy and concreteness. of incentives and programs for growth and wealth creation – which still requires work.

Labour’s union supporters, on the other hand, are happy with extra cash for some public services and changes to borrowing rules so that more money is available for long-term projects.

But there are fears employers’ National NI pay rises will be “raised in every negotiating room” as an excuse to lower wages, as one leader put it. Frustration on the left over the cap on second-child benefits and the winter fuel allowance remains – with a judicial review of the decision to pay these pensioners imminent.

But forget about the inevitable skirmishes and stress. The Budget fills in many gaps about this government, answering part of the frequently asked question: What does Keir Starmer really stand for?

The response could almost be a line from Gordon Brown’s past budgets – economic stability, more public spending, with schools and hospitals a priority.

Starmer’s supporters say the discipline of day-to-day spending – and even cuts to some departments – make it different from past Labor budgets, claiming they have inherited the Tory mantle as the party that can be trusted with public money .

But there is no doubt that the Budget sets out the priorities of classic Labor instincts, not the weak centres.

A government source said none of this should come as a surprise.

“The traditional centre-left arguments were all present in the election – ending non-Dominions, private schools VAT – overall it passes the fairness test, which is the most important thing.”

“Work is in the blood,” said one cabinet minister. In the coming weeks, Labor will publish its so-called “Plan for Government” which will make this even clearer.

The sharper shape makes life both easier and more difficult for brand-new Conservative leader Kemi Badenoch.

If Labour’s stripes were redder, then the Conservatives could paint themselves as a darker blue, perhaps more directly.

Kemi Badenoch is deliberately light on policy, but her principles are clear. She believes in free markets and smaller countries. For her, drawing comparisons with the government is not difficult. “This is back to the future,” one Conservative source told me.

“We can go back to first principles, just like we did in the 1970s and early 2000s” by opposing larger government and higher taxes.

Another senior party figure said the Budget had charted a clear path, telling me: “The government has positioned itself as distinctly post-New Labour.

“It’s workersist, it’s not good for farmers or rural areas – for pensioners and farmers you’re going to see you have a coalition in which the Conservatives can regain 250 seats. “

Badenock’s supporters are convinced she can fulfill the opposition’s top priority, which is to attract attention. Opposition parties have no automatic right to attention.

One supporter is convinced that “no matter what happens, she will be a compelling figure.” But Labor believes their budget choices pose a number of pitfalls for the new leader.

It seems natural for the Conservatives to vote against government tax increases in the Budget. But opposing additional funding for public services is less comfortable.

It is one thing to object to VAT being charged to private schools. But will the Conservatives oppose new teachers in public schools supported by tax increases? This is a harder argument to make.

Labour’s decision means that despite Badenock’s heavy-handed approach, the Conservatives are expected to have some say on schools and hospitals – services the public rely on.

One senior Tory warned that this week “a public services parliament was set up… If you rely solely on atmosphere you won’t get through a sustained period.”

as Chris wroteBadenock’s task was daunting. Not just because their numbers were decimated by the July blow, but also because the Conservatives have been at each other’s throats for years.

Sources described the party as “grumpy” and “deeply skeptical”. Getting rid of leaders has become almost the norm.

One contender for the post joked as they campaigned for votes, with one former minister even telling them: “I’m more interested in the leadership race in two years’ time.”

Badenock won a clear mandate, but the lead was smaller than in previous games.

There’s no doubt she’s a standout politician, with another Conservative saying, quoting an old TV advert: “She has the potential to be a Heineken and reach parts of the electorate that other Conservatives can’t.”

But her style also comes with risks – “like a can of Heineken, if you shake it too much, you get foam everywhere” and a mess. We’ll see – Kemi Badenoch joins us exclusively tomorrow, live on BBC One.

But today we begin a new chapter. One Tory source said we were back to the “classic left-right era”.

The Labor government has expressed its priorities in terms of big borrowing, big spending and big taxes, confident that the public will support them, with budgets at home and in Whitehall having been under such pressure for years.

The new leader of the opposition believed something completely different. Of course, don’t forget the smaller parties, with the Reform Party, Lib Dems, SNP and Greens also playing a big role.

But the outlines of the central race now feel clearer.

For years, politicians, both Labor and Conservative, have liked to suggest that we could move to lower taxes while still having the kind of public services that the government spends more cash on as a country.

Perhaps this week might mark the moment when our politicians stop telling us we can have it all.

Now we will no longer be like a “stepping stone” between the United States and the rest of Europe, a former cabinet minister said. Politics is an ever-changing kaleidoscope, but Labour’s massive budget has set new conditions.

With the new Conservative leader taking office, we have entered a new era. Marking the date, as one government source noted: “This is the week we’ll find out about the politics of this parliament.”

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