Voters now have a real choice between two clear political paths

Editorial: a ‘tax, spend and borrow’ Budget from Rachel Reeves followed by the rise of a right-wing leader of the Conservative Party in Kemi Badenoch leaves the electorate with two clear paths diverging from the once crowded centre ground

As the United States prepares for a landmark election on Tuesday, British politics also stands at a pivotal moment. The Labour government’s first Budget has coincided with the election of a new Conservative Party leader. After Rachel Reeves’s “tax, spend and borrow” Budget and the choice of a right-wing Tory leader in Kemi Badenoch, who rather strangely believes her party “talked right, but governed left” before losing July’s election, both main parties have arguably edged away from the centre ground.

A complaint from many voters that the parties are “all the same” was valid when the big two often engaged in man-for-man marking and the then Labour opposition hugged the Tories close – particularly on the economy, in what proved a successful drive to reassure the public. But in recent days, everything has changed. Voters now have a real choice.

The Independent regrets this did not happen during the election when there was, as the Institute for Fiscal Studies warned at the time, a “conspiracy of silence” about the difficult choices on tax and spending inevitably facing the next government.

In a significant admission during TV interviews on Sunday, Ms Reeves accepted she was “wrong” to say during the campaign that Labour would not need to increase taxes beyond the £8bn proposed in its manifesto, insisting she did not “know everything” about the state of the public finances until she became chancellor. There is, of course, a huge gulf between £8bn and the £40bn tax hike she announced last week.

Such candour is welcome, if belated. Ms Badenoch is promising more of it from the start of her leadership, though her pledge in her acceptance speech on Saturday to be “honest about the fact that we made mistakes” had its limits when she was interviewed by the BBC. She did not want to conduct an immediate “post-mortem” on the leaderships of Boris Johnson, Liz Truss and Rishi Sunak, and was perhaps unwise to describe the Partygate scandal as “overblown”.

The new Tory leader wants to renew her party’s principles before translating them into policies. But she will find decisions coming at her thick and fast; as well as choosing her shadow cabinet, she will have to navigate Commons votes on the Budget, the higher national insurance contributions (NICs) for employers, and Ms Reeves’s new fiscal rules.

Jeremy Hunt, the former chancellor, twice set a trap for Labour by cutting employees’ NICs, which Labour sidestepped by not promising to reverse them – perhaps unwisely, given the row over the Budget’s impact on business. Now the tables are turned, and Labour is already laying traps for Ms Badenoch, challenging the Tories to say which public service improvements and infrastructure projects they oppose.

Labour would love nothing more than to redraw the dividing line of the Blair-Brown era: “Labour investment versus Tory cuts.” Ms Badenoch believes the tax burden was already too high under the Sunak government but insisted on Sunday: “That doesn’t mean that we have to cut public services, it means that we have to look at how we are delivering public services.”

The new Tory leader will need to resist the temptation to focus too heavily on culture wars and her anti-woke crusade. Constantly in her mind should be the Tory voters who switched to the Liberal Democrats and Labour, not merely those who went to Nigel Farage’s Reform UK or stayed at home. There are signs Ms Badenoch will oppose Labour’s plans on net zero, reforms to help renters, and the smoking ban. But the next election will surely be fought mainly on the terrain of the economy and public services, while the Tories will desperately need to appeal to under-50s, and so will need to prioritise issues such as housing.

However, the new political landscape also carries risks for Labour. Ms Reeves has placed a lot of her chips on improving the NHS; if voters do not see tangible progress, her party will be in trouble. Ms Badenoch’s arrival on the scene will put Labour under pressure to turn its rhetoric about public sector reform into reality; that will rightly become an important new battleground. The government will also be judged on living standards and its “number one priority” of boosting economic growth. The forecasts for both emanating from the Budget are not encouraging, and Labour will need to do better.

If Labour fails, Ms Badenoch’s task is to ensure her party is in a position to reap the benefit. That is not a given when a volatile electorate means the days of pendulum politics might be over; other parties are available. Above all, the Tories will need to regain the public’s trust. Ms Badenoch’s forthright style means they will certainly get a hearing.

The Independent welcomes the much clearer choice now on offer to voters; it is better late than never.