(MENAFN) Conservative Party leader Kemi Badenoch is expected to announce a new economic “golden rule” centered on lowering government borrowing and reducing taxes, according to reports from the party conference.

Under this proposed rule, a future Conservative government would direct half of any budget savings toward reducing the national deficit — the shortfall between government spending and tax revenue — while using the other half to fund economic growth initiatives, including tax reductions.

Badenoch will argue that her party is the only one “with a plan to get our economy back on track.” She will emphasize the need for “fiscal responsibility,” adding, “We have to get the deficit down and we must also show how every tax cut or spending increase is paid for.”

In her speech, Badenoch will accuse the Labour government of endangering the UK’s financial stability through excessive borrowing and taxation, describing its approach as a “borrowing and tax doom loop.” She is expected to call Labour’s economic policies “not sustainable,” claiming that heavy government borrowing is equivalent to “stealing from our children and grandchildren.”

At the conference, the Conservatives have pledged to identify around 63 billion dollars in annual savings through reductions in welfare spending, the civil service, and foreign aid. They have also laid out £9 billion in new spending commitments, including a $6693 tax rebate for young people and the abolition of business rates for High Street retailers.

Badenoch’s address aims to reestablish her party’s economic credibility and further distance her leadership from former Prime Minister Liz Truss, whose 2022 mini-budget triggered market turmoil and her eventual resignation.

The Conservative leader also intends to reclaim the reputation for financial prudence that Labour has worked to project since coming to power, positioning itself as the party of stability and “sound money.”

However, the current Labour government faces a difficult autumn Budget. A previous rebellion within the party disrupted attempts to save billions in welfare spending earlier this year.

Economic analysts have warned that tax increases may be unavoidable if Chancellor Rachel Reeves intends to meet her own borrowing and spending limits for public services.

The Conservatives are focusing on reducing public sector net borrowing (PSNB) — the measure of the gap between total spending, including investments, and total tax revenue. According to the latest figures from the Office for Budget Responsibility, PSNB is forecast to drop from $183.8 billion (4.8% of GDP) this year to $99 billion (2.1% of GDP) by 2029–30.

Party insiders say the Conservatives remain wary of the overall size of the national debt and the growing burden of interest payments. They also express doubt that Labour’s deficit reduction strategy or the OBR’s optimistic forecasts will prove accurate.

Reducing the deficit has been a defining Conservative policy goal since the era of David Cameron’s coalition government in 2010. Under Badenoch’s leadership, the party appears to be returning to that fiscal stance, with her rhetoric echoing that of former Chancellor George Osborne, who presided over deep spending cuts in pursuit of balanced budgets.

Meanwhile, Reform UK has pledged to make large savings to finance extensive investments in tax cuts, healthcare, and defence. Conservatives at the conference have dismissed those promises as unrealistic, labeling Reform UK “socialist” for its proposals to expand public spending and nationalize certain industries.

Badenoch’s speech comes amid rising internal and external pressure. This conference marks her first as party leader following her election last year, which came after the Conservatives’ heavy defeat in the 2024 general election. Despite her efforts to rebrand the party, recent polls show the Conservatives trailing far behind both Labour and Reform UK, a situation made worse by poor results in the latest local elections.

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