Learn to live within your means, says Gillian Keegan

“Labour politicians have tried to redefine this as ‘austerity’. I prefer to call it living within your means. Perhaps it takes a simple northerner to call things by their proper names.”

She quoted her political heroine Mrs Thatcher, who once said: “Pennies don’t fall from heaven, they have to be earned here on earth.”

The speech has been interpreted in Whitehall as Mrs Keegan setting out her stall as a potential future leadership candidate if the Conservatives lose power at the next election.

It comes as Rishi Sunak was threatened with a potential Tory mutiny last week after Boris Johnson, Nadine Dorries and Nigel Adams all said they were standing down immediately, triggering three by-elections at a time when the Conservatives are well behind Labour in the polls.

‘Fairy-tale economics’

Mrs Keegan said that like Mrs Thatcher, she learnt about the economy while working in a shop at the age of 14.

She said that pursuing tax cuts before sorting out fundamentals such as high inflation was “fairy-tale economics” in an apparent swipe at former Downing Street residents Liz Truss and Kwasi Kwarteng.

She said: “Financing expensive projects or pursuing tax cuts without sound money and fiscal discipline is fairy-tale economics.

“Forget that simple lesson, and we forget Thatcherism.

“Plus selectively choosing bits of the legacy, dressing it up as Thatcherism, is a betrayal of her great legacy. It is not enough to look the part, you need to play the part, understanding how the real economy works to deliver real, lasting change.”

Building on her reputation for taking a tough stance on strikes, she quoted Mrs Thatcher as saying “much as we would like to do many things in the public sector, there is nothing sound or moral in spending other people’s money that we haven’t got”.

Mrs Keegan has refused to meet with teaching unions after they rejected an offer of a £1,000 one-off payment for the present academic year and an average 4.5 per cent pay rise next year. Unions are threatening coordinated strike action in July and further walkouts in the autumn term.

Mrs Keegan said that if inflation doesn’t come down, then teachers, parents and children will “all suffer”.

Working-class family in Liverpool

She said: “It’s a spiral that makes us all poorer, but it appears that some unions are more focussed on their narrow interests and not our wider well-being as a society.”

In a highly personal speech, she presented herself as a Westminster outsider who grew up in a working-class family in Liverpool and had a successful career in business before becoming a politician. She was elected as MP for Chichester in 2017.

She said she adopted her husband’s surname when she stood as a Tory candidate to protect her family in the Labour stronghold of Liverpool.

Mrs Keegan, who left school at 16 to become an apprentice in a car factory, said the Government is “getting rid of the soft bigotry that says courses in technical education are not equal to academic education”.

She cited the Government’s promotion of degree apprenticeships, where students learn while working in industry, as an attempt to demonstrate that universities aren’t viewed as “the only route to a good life”.