Kemi Badenoch, the newly elected leader of the Conservative Party, has criticised Labour's budget plans as 'fantasy economics', setting the stage for a major political clash over economic policy and public services. Labour, led by Chancellor Rachel Reeves, has challenged Badenoch to support its £40bn tax rises and increased borrowing for capital investment, or face opposition in upcoming parliamentary votes.
Badenoch, who became the first black leader of a major UK party after winning 56.5% of the vote among Conservative members, made no mention of her race or gender in her victory speech. Instead, she focused on the need for her party to be 'honest' about its recent failings and to admit 'the fact that we let standards slip'. She suggested that, with a coherent plan, the Tories could challenge Labour at the next general election.
Labour has insisted that the Tories must now make their own 'big choices' by backing or rejecting the budget in Commons votes. Chancellor Reeves stated: 'If Kemi Badenoch opposes this budget, then she has to tell the country if she opposes investment to cut waiting lists, investment to recruit teachers and investment to build critical infrastructure.'
Since the budget, outgoing Tory leader Rishi Sunak and shadow chancellor Jeremy Hunt have condemned the increase in employer national insurance contributions as a 'jobs tax', while Conservative MPs have attacked increases in inheritance tax for farm owners. Key parliamentary flashpoints are expected in the next fortnight, including votes on national insurance changes and fiscal rule alterations.
Despite criticism from business leaders, the budget has received support from organisations like the International Monetary Fund, which backed its emphasis on long-term investment. An Opinium poll for the Observer found the budget less unpopular than most recent fiscal events, with improved personal ratings for both Prime Minister Keir Starmer and Chancellor Reeves.
