Maitland Political Insight Conservative Party Conference 2014
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Maitland Political Insight Conservative Party Conference 2014
Conservative Conference
2014
Maitland Political Insight – Edition VI
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Conservative Conference
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September 2014
Contents
Introduction ……………………………………………………………………………………….3
Economy ……………………………………………………………………………………….....4
Business……….…………………………………………………………………………………..4
Welfare…..........................................................................................................................5
Health……………………….…………………...………………………………………………...5
Foreign Affairs & Defence………………………………………………………………………..6
2
Conservative Conference
2014
Introduction
As Party Conference season continues, last week it was the turn of the Conservative Party in
Birmingham.
It‟s safe to say that #CPC14 (as it was known on twitter) didn‟t get off to the start the Leadership
would have wanted with the news of Mark Reckless, MP for Rochester and Strood, defecting to
UKIP breaking on the eve of the conference. Conservative Party Chairman Grant Shapps MP was
firm in describing the move as “completely illogical”, but there was a definite purple cloud hanging
over Birmingham at the start of the conference.
That said, all was forgotten when Leader of the House, William Hague MP took to the stage on
Sunday afternoon. In what many labelled as his last hoorah, Hague‟s speech was an emotional
goodbye to the party he once led and labelled as a “party for everyone” as evidenced by him. This
speech was to kick of a series of substantive contributions from the party leadership as they set the
course for the 2015 General Election.
Monday saw some of the Cabinet heavyweights take to the stage. Chancellor George Osborne MP
announced £23,000 benefit cap and the Conservatives‟ plan to cut the deficit. Minister for the
Cabinet Office, Francis Maude MP spoke about the continuing Government efficiency reform
programme that would take place in the next Parliament. The afternoon was capped off by Work
and Pensions Secretary, Iain Duncan Smith MP, who had the hall on their feet when he broke free
from the autocue to address party unity.
Home Secretary Theresa May stole the show on Tuesday with a composed performance which
focused on tackling extremism and reform of „stop and search‟. It was a tough act to follow, but
Boris Johnson threw everything into it, including a brick. There is no doubt the London Mayor won
the line of the conference award, declaring that the new Conservative fisheries policy was "to chuck
Salmond overboard, then eat Kippers for breakfast!"
Then it was the turn of Prime Minister David Cameron MP who took to the stage to close the
conference on Wednesday. Looking back on the year past, Cameron paid homage to those who
fought on D-Day. He was not bashful when making a joke at Ed Miliband‟s expense, referencing
the Labour leader „forgetting the deficit‟. Key policy announcements included the raising of the
personal allowance and raising the 40p tax rate from £41,900 to £50,000 by 2020, which was
criticised by Labour as an unfunded tax cut. The Prime Minister also committed English votes on
English issues in Parliament by the next election. Whilst this was a traditional Conservative speech
in many respects, some announcements did indicate a tack back to the centre ground ahead of
next May‟s general election.
This is the third edition of the Maitland Political Conference Insight, providing you with detailed
analysis of the major announcements from the Conservative Party Conference 2014.
3Conservative Conference
2014
Economy
As was expected the economy formed the centrepiece of the conference, with a raft of tax and
spend measures being announced. The Conservatives are hoping the economy becomes the
crucial battleground at the next election, due to their long-held poll lead over Labour on the issue.
The Chancellor of the Exchequer delivered his speech from the podium on Monday. He opened on
an optimistic note saying “I believe it is perfectly possible for Britain to be the most prosperous
major country on earth.” He then moved on to trumpet the Government‟s economic record, referring
to Britain as “the fastest growing, most job creating, most deficit reducing nation on earth”.
The Chancellor then took aim at the Labour Party opposition, enjoying a cheeky jibe at Labour
leader saying “Ed Miliband made a pitch for office that was so forgettable that he forgot it himself”.
He then announced the speech‟s headline message, saying deficit reduction requires a further
£25bn of public spending cuts in the first 2 years of the next parliament. The announcement was
meant to ease the electorate into the idea of further public spending cuts should the Tories win in
May next year.
If George Osborne MP‟s public spending cuts announcement portrayed him as the „bad cop‟, then
David Cameron MP intended to be the „good cop‟ with tax cuts at the heart of his conference
address. He began by saying in plain terms that “If you work hard, we will cut your taxes…but only
if we keep on cutting the deficit, so we can afford to do that”. He moved on to pledge the lowest
corporate taxes in the G20, a nod to the pro-business instincts of many Tory activists.
The Prime Minister‟s speech then got into full swing with a commitment to raising the tax-free
personal allowance from £10,500 to £12,500, a policy which has been touted by the Lib Dems for
some time now. He went on to say how this would take a person earning minimum wage and
working 30 hours a week out of income tax altogether. “So with us if you work 30 hours a week on
minimum wage, you will pay no income tax at all. Nothing. Zero. Zilch”.
The Prime Minister moved on to perhaps his most surprising announcement, that the
Conservatives would raise the threshold at which people pay the 40p tax rate to £50,000 by the
end of the next parliament. He said “The 40p tax rate was only supposed to be paid by the most
well-off people in our country but in the past could of decades, far too many have been dragged
into it”. The total cost of these tax cuts amounts to £7bn, with the Conservatives yet to outline how
they are to be funded.
Both the Prime Minister and Chancellor have set out their economic stall ahead of next May‟s
election, believing it will be enough to sway the electorate their way.
4Conservative Conference
2014
Business
The Conservatives have often been characterised as the most business-friendly party and at its
Conference in Birmingham the party sought to show how it intended to honour that accolade. As
Chancellor George Osborne said during his speech: “the future for Britain is to be a pro-business
country.”
The most eye-catching announcement was made by Prime Minister David Cameron MP in his
speech on Wednesday, saying a Conservative government “will always have the most competitive
corporate taxes in the G20.” At the same time, Cameron referenced Chancellor George Osborne
MP‟s speech given on Monday, and warned companies that the UK does expect companies to pay
the tax they are due to pay. Osborne had singled out major technology companies in particular as
an example of aggressive tax avoidance. He said his “message to those companies is clear: we
will put a stop to it. Low taxes, but low taxes that are paid.”
He gave some details of this clamp-down, which has been dubbed the “Google tax”, but more
details will be announced in the Autumn Statement on 3 December. The new measure will
specifically target the “Double Irish” - a transfer pricing scheme. This involves transferring profits
internally, first to Ireland, and then to another low-tax jurisdiction, to limit a firm‟s tax liability.
Companies using this strategy will be made to pay tax on profits as if they were incurred in the UK.
The party also set out plans to invest in apprenticeships, aiming to increase the total number
between 2015-2020 to 3 million. This increase will be funded by lowering the household benefit
cap from £26,000 to £23,000. The plan also sees access to Jobseeker‟s Allowance for 18-21 year
olds abolished and replaced with a Youth Allowance, time-limited to six months, after which young
people will have to take an apprenticeship, a traineeship, or do daily community work for their
benefits.
On infrastructure, Cameron has sought to re-assert the Conservatives as the party of the
homeowners, announcing that up to 100,000 new homes would be offered to first-time-buyers
under the age of 40 at a discount of 20%, by exempting them from certain taxes and regulations, if
the Tories win the next election. The houses would be built on brownfield land that has already
been earmarked for development but which is not needed for commercial use.
In more broad-brush strokes, Osborne summarised the Conservative plan that is partly underway
already under the Coalition Government: “we will tap the shale gas, commission nuclear power and
renewables, and guarantee our energy for the future. We will build the high speed rail, decide
where to put a runway and support the next generation with starter homes in a permanent Help to
Buy.” He also said in response to concerns over the dominance of London that “the answer is to
build up the rest of our country”, in particular creating a Northern Powerhouse of cities, connecting
up the South West and putting the Midlands at the centre of a manufacturing revival.
5Conservative Conference
2014
Welfare
Welfare formed a significant part of the Conference agenda, with both Chancellor George Osborne
MP and Work and Pensions Secretary, Iain Duncan Smith MP, making a series of announcements.
With welfare reform also prominently on the agenda at Labour‟s conference last week, it is set to be
an important battlefround in next year‟s general election.
Osborne‟s announcement that the household benefit cap would be lowered was trailed heavily in
the media. The plan would also abolish Jobseeker‟s Allowance for 18-21 year olds and replace it
with a Youth Allowance, time-limited to six months. After six months, young people would have to
take an apprenticeship, a traineeship, or do daily community work for their benefits. The money that
would be freed up with this reform would be invested in apprenticeships, aiming to increase the
total number between 2015-2020 from 2 million to 3 million.
The second announcement was that working age benefits would be frozen for two years. The
Conservatives have long supported this policy but could not get agreement from their Coalition
partners to implement it. Osborne said that the freeze would come into effect in April 2016 and
would include Jobseeker's Allowance, Income support, tax credits, Housing Benefit and Child
Benefit but it would not affect pensions, disability benefits and maternity pay. The benefits freeze
will save £3.2bn over two years and the money saved would be used to cut the deficit. The
rationale is that earnings of those in work have risen more slowly than working age benefits: if the
benefits are frozen then by the end of the two years, earnings will have risen to match benefits.
When Iain Duncan Smith took to the stage he set out a number of further reforms. After a number
of delays in the roll-out of the flagship Universal Credit policy which rolls together most benefits, he
said that the Government will be accelerating the roll-out: “Universal Credit is going nationwide –
we are going to finish what we started.”
His major announcement, however, was that the Government is testing prepaid cards, on which
benefits are loaded and can only be used in certain shops. This harks back to Duncan Smith‟s days
at the Centre for Social Justice, where he tried to tackle the root causes of benefit dependency and
poverty in the UK. In his speech, he argued that he has “long believed that where parents have
fallen into a damaging spiral – drug or alcohol addiction, even problem debt, or more – we need to
find ways to safeguard them – and more importantly, their families, their children (…) That means
benefits paid should go to support the wellbeing of their families, not to feed their destructive
habits.”
This was a strand throughout Duncan Smith‟s speech and something he has tried to convince the
public off: the welfare reforms are compassionate, as they are designed to support those who want
to get back into work and not be something that people are given and left with for the rest of their
lives, regardless of their changing circumstances or their capacity for more. It will be an important
message of the election and something he received a lot of support for in the hall.
6Conservative Conference
2014
Health
Last week‟s Labour conference was widely thought to have done well on the issue of health, setting
a challenge which the Conservatives needed to respond to. Labour hold a 30-point lead over the
Conservatives as the party with the best policies on healthcare and it could indeed prove the trump
card that wins them the 2015 election.
The Health Secretary Jeremy Hunt MP made his pitch on Tuesday with a speech that contained no
real „rabbit out of the hat‟ announcements, but that did carry some significant pledges. He told
delegates that the Conservatives would „train and retrain an additional 5,000 GPs‟, as well as
confirming „extending GP access to weekends by 2020 and giving patients access to their GP
records by April‟. In addition he said a future Conservative government‟s health plans would include
greater use of the independent sector, though insisting this did not represent privatisation.
Summing up his political approach to the health budget he said any increase in spending had to be
accompanied by reform declaring „securing the NHS budget is not about an extra billion here or
there‟.
With the NHS shaping up to be a major battleground at the election the Prime Minister made it one
of the central planks of his speech and he made it clear that he will cede no ground to Labour
saying “the one thing that matters above everything is having a functioning National Health
Service”.
Addressing conference in his keynote speech Cameron committed a future Conservative
government to protect the NHS spending budget from 2015-2020. He linked this pledge on the
health budget with the economy saying „you can only have a strong NHS if you have a strong
economy‟ and in a direct challenge to Labour said his strong record on the economy means that he
can afford to protect spending on the health service.
In the most passionate and emotional section of the speech he said „understood very personally‟
the importance of the NHS after the experience he went through was his late disabled son Ivan.
Close to tears he talked about how the NHS was a „personal issue‟ saying “I am someone who has
relied on the NHS and whose family knows more than most just how important it is”.
He went on to tear into the Labour party‟s criticisms of his management of the NHS “how dare they
suggest I would ever put that at risk for other people's children? How dare they frighten those who
rely on the National Health Service?” Following the powerful comments, he received loud applause
and a standing ovation from the packed hall in the ICC.
The focus on health from the Conservatives shows that they will not lightly concede this ground to
Labour in next year‟s general election.
7Conservative Conference
2014
Foreign Affairs & Defence
Just days after Parliament voted to take military action in Iraq, Foreign Secretary Philip Hammond
MP and Defence Secretary Michael Fallon MP were clear that the Conservative Party‟s priorities
were security at home and confronting a growing number of challenges abroad.
Both men identified Islamic State and Russia‟s involvement in Ukraine as the central concerns of
British security policy. Hammond argued that the government had no choice but to join the
international coalition against IS. He said: “When evil rears its head, we have the courage to
confront it…they can and must be driven out of Iraq. And in Syria, we will continue our support for
the moderate opposition”.
IS also took a prominent role in the Home Secretary‟s speech. Theresa May struck a defiant tone,
highlighting the threat to Britain and pledging to “defeat the ideology that lies behind the threat”.
She said the government would introduce new counter-terror legislation in November and begin
removing passports from Britons travelling to fight for the group.
Hammond was equally scathing in his assessment of Russian President Vladimir Putin and
indicated that there would be no let-up in the pressure being applied through sanctions. This was
echoed by Fallon, who spoke of his efforts to “re-galvanise” NATO in the face of continuing conflict
in the Middle East and the danger posed to Eastern Europe by Moscow. He praised “the first formal
public commitment by our allies to reverse the decline in defence spending.”
Fallon went on to announce that £164bn would be spent on the military over the next ten years;
£3bn worth of investment was earmarked for naval bases in Portsmouth and the Clyde, in unison
with new fighters and transport aircraft for the RAF and vehicles for the army. As well as this, the
pair sought to reaffirm their support for the international aid budget despite popular calls for the
current funding pledge to be dropped.
Turning to the European Union, Hammond said his primary political concern in the run-up to the
election is to “lay the groundwork” for negotiations and convince “every single EU member of the
need for change”. He made the case for the Prime Minister‟s planned re-negotiation after accusing
Brussels of “hovering up powers that properly belonged to the nation states”. Asking delegates to
imagine the reforms a „proper Conservative government‟ could deliver, he called for a Europe of
open markets where there was “free movement, not freeloading” and which could out-compete the
rest of the world without being weighed down by red tape and regulations.
Concluding, Hammond pressed home the message, vital if the Tories are to see off the electoral
danger posed by Nigel Farage and UKIP, that only David Cameron MP is able to offer an in/out
referendum in 2017 saying “only we, the Conservatives, will deliver that referendum. No ifs; no
buts.”
8Maitland Political is part of the wider Maitland Consultancy Group,
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