Conservative members and MPs are happier than I have seen them for a very long time. Because they have stopped sinking, as they had been doing both before the general election and for a couple of years since. The risk that they would drown, that Reform would replace them as the only serious party of the right, is now low. There are two reasons. First, the perennial chaos in Reform - the constant controversies around funding and money, the endless gaffes by councillors, aides and members - means it is a long way from showing the kind of competence that a party pretending to government must demonstrate. Second, the Tory leader Kemi Badenoch has found a voice, a set of simple ideas and poise. The question is whether she can turn “we’re still here” into “ignore Reform, we are again the main party of opposition.” The point, which I assume Badenoch grasps though not many of her slightly euphoric members here at the Tory conference in Birmingham appear to do, is that the polls show voters are prepared to listen to the Tories again, but they still see Reform as their main vehicle to challenge both Labour and a Westminster status quo which many of them hate. Burnham gets this. His devolution and anti-privatisation agendas, and his Livercunian accent, are conscious appeals to those who feel ignored and hurt by the British way of governing since around 1979. Badenoch will today attack him as a throwback to the political and economic mayhem of the 1970s. And if he cannot soon demonstrate he has a credible modern answer to the only question that matters - how to make the economy grow again for the benefit of the vast majority in this AI era - he will soon have a problem or many. But she is also a throwback, and deliberately so. She is trying to regain her party’s reputation for economic competence, after 14 years of Tory led governments when the economy stagnated except for the near heart attack under Liz Truss. With businesses, she is doing this by promising to shrink the state and allocate half the savings to reducing the government’s increasingly unaffordable debts - and also by halving the national insurance cost for them of employing 21-to-24 year olds. Badenoch is also trying to woo richer voters, old and young, who would traditionally have voted Tory, but have despaired and gone to the LibDems, Reform and even Labour. For them there are pretty transparent bribes - though I should say Badenoch passionately denied this to me, claiming hers were rational growth inducing tax reforms. Whatever. In practice, her proposed abolition of all child-care means testing and of stamp duty disproportionately helps those with well-above average incomes in their first round and direct impact. Though she is correct that they should stimulate economic activity that is of wider benefit. But her expected cut in inheritance tax would be a huge boon to the children of the 5% of British households with most assets- and in its case, I cannot see an argument that it stimulates economic growth. Per contra, it seems awkwardly timed both from a social justice point of view and for the imperative of shrinking the government’s deficit. As the OBR points out, by 2030 the number of estates paying any inheritance tax would double to 10% and very useful billions would surge to the Treasury. Here is the important demographic backdrop. For those born at any point from around 1930 to 1975, it was super easy to buy a home when they were in their 20s or early 30s, because there were more houses available for fewer people. This was their good luck, not their wealth-creating genius. The corollary has been a massive relative shift of wealth from young to old. 1/2

I came away from Andy Burnham’s pre-conference interview thinking he may well promise to fund his new free system of care for the elderly (at least in part) by reforming the expensive triple lock guarantee for above-inflation increases in the state pension. Here were the clues in his chat with the bbc. First he said that the plan would not be implemented in this parliament. It would be in Labour’s next general-election manifesto. And his reason was that he would not break Starmer’s manifesto, which promised to keep the triple lock. Second, he said everyone would contribute to the funding of social care, but that the funding mechanism would be different from that of the NHS. In other words he would not use general taxation to pay for his new national care service. And to state the obvious, if the rate of increase in the state pension becomes less generous - up-rating by inflation perhaps rather than the higher of inflation or earnings, with a floor of 2.5% - this would have an impact both on current pensioners and future ones. All of us would contribute, either now or in the future. Third, he has been listening to what I and others have been querying, which is whether he is prepared to take tough decisions that upset and enrage important sections of the community, when he believes doing so is in the national interest. He made a point, in the context of how he would fund social care, in saying he would show his mettle, his backbone. And to state the obvious, opposition parties and some older people will be angry if he abolishes the triple lock. So why might he choose to make the rate of increase in state pensions less generous? I’ve rehearsed these arguments before. But here they are again. It’s hard to find an economist who believes the triple lock is sustainable given all the other competing claims on government resources. As the Institute for Fiscal Studies says, keeping it would add anywhere between £5bn and £40bn a year to public spending by 2050, with the central estimate being £20bn. This might be fair if there had not been a massive transfer of income and wealth between younger and retired people over the past 20 years. But that transfer is painfully real for working age families struggling to earn enough to pay rent, let alone buy a home. The clincher, for senior members of this government, is that a new free-at-the-point-of-use care service would disproportionately benefit older people (obviously!). And help all of them. So it would be reasonable, they say, to pay for it by adjusting another part of the state’s universal support for them. Finally, Burnham said today he and the Chancellor would show the nation’s creditors - some of whom are sceptical - that they are prepared to take unpopular though rational decisions to slow the growth of the national debt and the public sector’s interest bill. Reforming the triple lock would be the most symbolically powerful manifestation of that fiscal resolve. As I say, Burnham dropped all these hints today. Am I certain that is his plan? Not really. Though he said he would tell us more in his conference speech on Tuesday, and I am struggling to think of another funding plan that is consistent with everything he set out.