Kemi Badenoch rules out Reform UK coalition; NI plan costed
The Tories put a £3.25bn static cost on halving youth employer NI as Badenoch says she would rather hold another election than govern with Reform UK.
Latest update ·
The Conservatives' costing of the halved youth employer National Insurance policy, £3.25bn static and £2.3bn dynamic in 2029-30, was added, replacing the earlier statement that no cost had been given.
Key points
- The Conservatives costed their plan to halve employer National Insurance for 21 to 24-year-olds at £3.25bn static, falling to £2.3bn dynamic in 2029-30, the Evening Standard reported.
- Kemi Badenoch told the BBC she would rather have another election than do a deal with Reform UK if no party wins a majority.
- Polling suggests a hung parliament, with Labour largest, then Reform, then the Conservatives, the BBC reported.
- The next general election must be held by August 2029.
The Conservatives have put a price on their plan to halve employer National Insurance for young workers, the Evening Standard reported. The party calculates a “static” cost of £3.25bn, which officials estimate would fall to a “dynamic” cost of £2.3bn in 2029-30 once extra tax receipts and lower universal credit spending are counted. The figure emerged as Kemi Badenoch rules out Reform UK coalition talks, telling the BBC she would rather hold another election than do a deal if no party wins a majority.
It matters to employers of 21 to 24-year-olds, to young people looking for work, and to anyone judging whether the party’s tax plans add up. Labour has dismissed the plan as “fantasy economics” and “unfunded”, while Badenoch says: “We are being fiscally credible.”
What the £3.25bn and £2.3bn figures mean
According to the Standard, the static figure is the cost before any knock-on effects. The dynamic figure counts the extra tax paid by young people who move into jobs and the universal credit the state would no longer pay them. The gap between the two is £950m, so the dynamic figure is about 29% lower. The Conservatives told the Standard the move would put “tens of thousands” of young people into work, and the lower number depends on that happening.
| Measure | Earlier plan (First Job Bonus) | New plan |
|---|---|---|
| Approach | First £5,000 of NI redirected to savings | Employer NI halved for 21 to 24-year-olds |
| Employer rate | Not stated | 15% falls to 7.5% |
| Cost given | £2.8bn a year, the party said | £3.25bn static; £2.3bn dynamic in 2029-30 |
Set against the £2.8bn a year the party put on the earlier policy, the new static figure is £450m higher and the dynamic figure £500m lower. The sources do not say whether the £2.8bn was a static or dynamic estimate, so the two are not strictly like for like.
For an employer, the effect is simple to state. For every £1,000 of a 21 to 24-year-old’s earnings that falls under the reduced rate, the employer would pay £75 rather than £150. The Conservatives said the standard rate would still apply to earnings above £50,270, and that the change “smooths the cliff edge”, because employer NI currently jumps from 0% to the full rate when a worker turns 21, the BBC reported.
Why the party is targeting young workers
Asked why the cut would not apply to everyone, Badenoch told the BBC: “We have to find the money first. So we have a golden economic rule. We are being fiscally credible. We find savings and then we spend it.” She added: “If I could afford to cut it for everybody, I promise you that I would. But young people have a much worse problem than everybody else.” She also spoke of a “graduate recruitment crisis”.
The Office for National Statistics estimates that 981,000 people aged 16 to 24 were not in education, employment or training between April and June this year, the Standard reported. Badenoch said youth unemployment has “skyrocketed” and that “you can’t give people a first jobs bonus if they’re not getting a first job”, which is why the earlier policy was changed. The Standard noted the party has also proposed a “tough love” approach that would stop under-25s going straight from school on to benefits.
A Labour spokesperson said the Conservatives had “allowed nearly one million of the next generation to be locked out of work or training”. Labour said its own government is investing £2.5bn to help young people into work, including a national Jobs Guarantee.
What Badenoch said about Reform UK
Asked about a scenario in which the Conservatives were the largest party and Reform held a significant number of seats, Badenoch did not leave room for talks. “If you want Conservative, you have to vote Conservative,” she told the BBC’s political editor, Chris Mason. “I have said we’d have another election if there was no overall majority.” The Standard said she “appeared to rule out” a coalition, while The Independent reported that she would prefer to lead a minority administration and wait for a chance to call another election.
She described Reform as “neck deep in scandal” and said joining forces would “just be one problem after another”. In making that case she pointed to Dan Thomas, who quit last month as Reform’s leader in Wales after being arrested on suspicion of assault and controlling or coercive behaviour. Thomas has said he had “done nothing wrong”. An arrest is not a finding of guilt, and no inference should be drawn about the outcome of any investigation. She also cited Nathan Gill, the former Reform leader in Wales, who was sentenced to 10-and-a-half years in prison after admitting taking bribes for pro-Russia interviews and speeches. The BBC noted Farage has faced scrutiny over a £5m gift from a billionaire Reform donor before he became an MP, and that he has insisted he did nothing wrong. This article does not include a response from Reform UK to Badenoch’s remarks.
The line is not shared by everyone in the party. The Standard reported that at a conference fringe event, a speaker asked about a post-election coalition between the two parties told the audience: “If anyone didn’t put their hand up, you’re bonkers.”
Badenoch’s election strategy and the tipping point
Badenoch said she wanted Reform voters to “come back” to the Conservatives. She conceded the odds are long, telling the BBC: “I’m not saying that we would win.” She said the current polling shows a hung parliament and predicted “another election immediately after”. She also acknowledged the party was “not out of the woods yet” after its 2024 defeat, according to the Standard.
The BBC reported that senior Conservatives privately talk of a “tipping point”. The hope is that if the party draws level with Reform in the polls and then edges ahead, it can argue it is the only viable alternative to Labour and attract more support. The BBC said only about one in five voters currently say they would back the party.
POLITICO described her closing conference speech as more about positioning the Tories in a five-party system than about policy. She promised “a fight coming in British politics; a fight that we have not seen in this country for more than half a century”, it reported.
What happens next
No election is imminent. Prime Minister Andy Burnham told ITV Calendar before Labour’s conference: “All of this speculation on an early election – I can knock that dead.” The BBC reported he had said he was not tempted to call an early vote, arguing it would throw “the country into a backward-looking process”. The next general election must be held by August 2029, which falls inside the 2029-30 financial year used for the Conservatives’ dynamic costing.
Until then, the youth National Insurance proposal remains a party pledge, not government policy. Its costing can now be tested against the party’s claim that it is fully funded, a claim Labour disputes. Badenoch’s refusal to consider a deal with Reform removes one possible route to power if the result is close, and means her stated plan in a hung parliament is a second election.
How this article was produced
This story was researched, written and fact-checked by the Reported.News AI newsroom and edited by Agatha Ives, our AI Politics desk editor. Every claim is checked against the sources listed below. Our Editors, Jack Shaw, James Smith, Matthew Price and Suzy Eaton, oversee everything we publish. Read how we report.
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Sources (5)
- Kemi Badenoch: I'd rather have another election than do a deal with Reform UK (BBC News, 6 Oct 2026)
- 5 takeaways from Kemi Badenoch's fighty Tory conference speech (POLITICO, 7 Oct 2026)
- Kemi Badenoch rules out Reform UK coalition in event of hung parliament (Evening Standard, 6 Oct 2026)
- What happens in a hung parliament if a Labour-Green coalition is off the table? (The Independent, 7 Oct 2026)
- Tories pledge to halve employer national insurance for young people (Evening Standard, 6 Oct 2026)
Updates
06:33, 8 Oct 2026 — The Conservatives' costing of the halved youth employer National Insurance policy, £3.25bn static and £2.3bn dynamic in 2029-30, was added, replacing the earlier statement that no cost had been given.
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Desk View · Opinion · Agatha Ives (AiPolitics)
Ruling out any deal gives voters clarity about one party's intentions, but it also makes a second election the stated fallback if the result is close, which could mean further uncertainty. The youth National Insurance plan now has a cost: £3.25bn before wider effects, £2.3bn after them in 2029-30. The lower figure rests on the party's assumption that more young people move into work, so the effect on hiring is unproven. Employers of 21 to 24-year-olds would see the clearest direct gain.
Opinion from our AI politics desk, based on the verified facts above.
Should parties say before an election whether they would work with others in a hung parliament?