Conservative Party Conference Day 1: A Conference in search of an idea

Hello,

We hope this finds you well. We are writing this live from Manchester, where the Conservative Party have gathered for their annual party conference. With numerous Cabinet Secretaries giving speeches in the main hall and a long list of receptions ahead of us, we wanted to write about our first 24 hours at Conservative Party Conference. We'll keep it brief (but slightly longer than normal):

One line summary: A smoother and better attended conference than expected, but one that still needs a key message for the Conservative election machinery to campaign on.?

One line question: Will Boris weigh in??

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Summary and comment:?

PM Rishi Sunak began his first Conservative Party Conference as leader facing calls for tax cuts from a small group of vocal MPs that backed his predecessor, Rt. Hon. Liz Truss MP. The goal of this group of MPs, some of whom took part in a “rally for growth” on Monday 2 October ahead of the Chancellor's conference speech, was to prompt journalists to ask HMG Ministers whether there would be tax cuts ahead of the next election in the hope that they could pressure HMG to publicly commit to doing so. Tom Tugendhat MP, Security Minister, and Michael Gove MP, Levelling Up Secretary, said on 1 October that they would like to cut taxes, but HMG's priority was to reduce inflation, a key theme of PM Sunak’s premiership thus far, while focusing on long-term decision-making. Many attendees have referred to PM Sunak’s policy messaging as “place holder policies,” and reinforces our view so far that this is a conference in search of an idea while hoping to avoid controversy.?

Conference is busier and more upbeat than last year, which happened shortly before then-PM, Liz Truss MP, resigned. Most fringe events and speeches are well attended, and much of the Cabinet and many influential MPs have chosen to attend this year, in contrast, again, to last year’s conference where few MPs joined. So far, there is little in the way of overt briefing against i.e. low level rebellion against PM Sunak’s policy and political agenda by anonymous MPs to the media. Many of the MPs we have spoken to are focused on getting through conference without any big gaffes because the Labour Party, in contrast to normal procedure, are hosting their conference next week. There is low level disgruntlement amongst many special advisors that this is a “gift to Labour” and one that PM Sunak did not have to give. HMG controls the timetable in Parliament, so, theoretically, the Conservatives could finish their conference and recall Parliament, scuppering Labour’s party conference, although Labour contacts have told us that this negotiated arrangement predates Sunak's premiership. At present, a Parliamentary recall seems unlikely, and many SpAds are concerned that this is a dangerous precedent for the future, again implying many still expect to be in power at this time next year. ?

On the party circuit, much of the conversation has focused on what comes next. Most Conservative politicos are primed and in early election mode, but acknowledge that PM Sunak’s focus on “long term decisions” leaves much to be desired in terms of generating enthusiasm amongst the Conservative Party election machinery. Many Conservative Party members are fairly neutral about PM Sunak. Although there is the usual preference for tax cuts and lower immigration, there is less of an emotional outcry for both compared to last year, where PM Truss had just become leader after winning a gruelling contest with now-PM Sunak. There is a broad sense from many corporate attendees that there are still things to get out of HMG at Conference, with many coming with key asks, although it seems much of the usual short coffee meetings have been foregone this year, as many MPs have opted to speak on different panels in order to build their own profile and advocate for PM Sunak’s policies, again in an indication that the Conservative Party has entered a long haul election mindset. This is likely a product of PM’s Sunak’s reshuffle last month, which saw more loyalists take high office, such as his former SpAd, Rt. Hon. Claire Coutinho MP, who is now Energy and Net Zero Secretary and a prominent face on the fringe and reception speaking circuit.?

Although party discipline is much more solid compared to under former PM Truss, there are still two main contenders auditioning for the role of next party leader: Suella Braverman MP, Home Secretary, and Kemi Badenoch MP, Business and Trade Secretary. Both have been regular features of the fringe drinks reception circuit and have taken different approaches to building support amongst key political constituencies, many of which serve as the key inputs to the media cycle via quotes, reports, receptions, and alumni in Parliament and Government. Badenoch has positioned herself as a keen advocate of Brexit, but focused on the economic and trade opportunities it affords the UK (as she sees them), leaning on the UK’s ascendancy to CPTPP while she has been Trade Secretary. Badenoch is transitioning from operator to stateswoman, and although she made a few speech gaffes at different fringe events last night, she was warmly welcomed by many fringe audiences. Braverman’s approach has been more combative, as she continues to campaign on the UK’s withdrawal from the European Convention on Human Rights, a perennial bugbear amongst the Conservative Party membership. At present, many of the attendees we have spoken to do not see any potential for an immediate leadership challenge to PM Sunak. Many are treating Badenoch and Braverman’s auditioning as their own long-term campaign to become leader, should the Conservatives lose the upcoming election and seek to replace PM Sunak.?

The Chancellor of the Exchequer, Rt. Hon. Jeremy Hunt MP, made a speech on 2 October targeted to markets rather than conference, seeking to?maintain HMG's fiscal credibility. Hunt trailed no new tax changes and focused on public sector productivity increases as a way to reduce the fiscal deficit. The speech, especially early attacks on Sir Keir Starmer, the leader of the Labour Party, was positively received, although there was not as much enthusiasm amongst the membership as in previous years when tax cuts had been trailed ahead of the Autumn Statement or Autumn Budget.?

Almost immediately before the Chancellor's speech, former PM Liz Truss made a speech calling on PM Sunak to lower taxes as a way to stimulate growth; much of the media at Conference attended, outnumbering members at the event by approximately 3:1. Truss' only publicly scheduled speech was well received by the audience (57% of the Conservative Party membership voted for Truss over Sunak in 2022), and is one of the first firm intraparty schisms developing ahead of the general election. Most Conservative MPs will be in favour of tax cuts, but the bulk of Conservative MPs are currently supportive of PM Sunak's approach, having seen the meteoric rise and fall of Truss during her short tenure as PM. Nevertheless, as Truss positions herself at the head of the low tax wing of the Conservative Party, PM Sunak will find it difficult to maintain his current preferred stance of obfuscation and delay on the question of tax cuts. Sunak is likely opting for this approach in order to keep HMG's fiscal credibility intact and to prevent market volatility too far ahead of the next election, creating a clear dividing line between himself, his predecessor(s), and Labour.?