Fine everybody that's conservative (3,5)
I believe the answer is:
all right
'fine' is the definition.
('all right' can be a synonym of 'fine')
'everybody that's conservative' is the wordplay.
'everybody' becomes 'all' (I've seen this before).
'that's conservative' becomes 'right' ('right' can be similar in meaning to 'conservative').
'all'+'right'='ALL-RIGHT'
(Other definitions for all right that I've seen before include "never sinister?" , "Completely one-sided" , "100% agreement" , "Very well, I agree" , "Very well, as you wish" .)