Badenoch sets out inheritance tax pledge as Conservatives seek revival
Constantvpn.com – Conservative leader Kemi Badenoch has promised that a future Conservative government would remove inheritance tax from family homes and allow couples to pass on a further £1m without tax.
Speaking at the party’s conference in Birmingham, Badenoch said the longer-term Conservative aim was to end inheritance tax entirely when public finances allowed. She said the party could not commit to full abolition immediately because of competing demands involving defence, prisons and the wider economy.
The next Conservative government will legislate so nobody will ever pay inheritance tax on their family home.
The proposal would represent a major change to the current system, under which inheritance tax can apply at 40% to the portion of an estate above the relevant threshold. At present, the standard threshold is £325,000, rising to £500,000 when a home is passed to children or grandchildren. Married couples and civil partners can also transfer unused allowances between them.
Badenoch said the tax had moved beyond its original purpose.
It was supposed to be a tax on the super wealthy, but it is now a tax on ordinary middle-class families in every corner of our country.
She said the Conservative plan would reduce every inheritance tax bill, while cutting by more than half the number of families required to pay it. The party estimates the policy would cost about £6bn annually. Conservatives say they have identified £71bn in potential public spending savings, including reductions to welfare spending, to support their wider economic plans.
Inheritance tax remains a relatively limited charge in terms of the proportion of estates affected, but it brings in substantial revenue. In 2023-24, 4.72% of deaths resulted in an inheritance tax liability, generating roughly £7bn for the government.
A broader message to voters
The tax announcement came near the end of a 66-minute address in Symphony Hall, where Badenoch tried to present the Conservatives as a changed party following their historic defeat in the 2024 general election.
She told activists they were engaged in a “battle for the soul of this nation” and argued that the party was rebuilding. However, she acknowledged the scale of the task facing the Conservatives while they remain behind Labour and Reform UK in opinion polls.
People are looking through the shop window. They like what they see, but not enough of them are buying yet. We need to fix that.
Badenoch used Marks and Spencer as an example of an established British brand that had refreshed itself and won back customers. The comparison was intended to underline her argument that the Conservatives must learn from past errors, regain trust and persuade voters that the party can again meet modern concerns.
Just like M&S, we must learn from our mistakes, win back trust and make people feel good about our party again.
Reform UK and Labour in the firing line
A central theme of the speech was Badenoch’s attempt to distinguish her party from both Reform UK and Labour. She described the Conservatives as the “no-nonsense party” and dismissed Reform as a “circus”, while arguing that former Conservative voters who backed Nigel Farage’s party should return.
The Conservatives have had an export boom of drama queens going to Reform. This party is now the no drama party, we are the no-nonsense party.
She ruled out an electoral arrangement with Reform UK, a stance that drew one of the strongest responses from party members in the hall. Badenoch said many Reform supporters had once been Conservative voters and referred to them as “our people”, adding that the party wanted them “to come back home”.
To those who say “unite the right”, we are not uniting with that. People deserve better than that and we are going to give them better than that. Character, conduct, and standards matter.
Badenoch also said she did not want to live in a country led by people who questioned whether her mixed-race children were English.
Prime Minister Andy Burnham was another frequent target. Badenoch accused him of seeking to “live in the past” and likened him to a “Paddington Bear prime minister” who hoped problems would disappear without decisive action.
Criticism over who would benefit
Labour and other opponents argued that the inheritance tax package would favour wealthier households rather than families facing immediate pressures on household budgets.
Labour chair Bridget Phillipson said the speech showed that the Conservatives had not changed, accusing Badenoch’s party of failing to offer meaningful help to ordinary families struggling with day-to-day costs.
The inheritance tax announcement gives the Conservatives a clear policy around which to build their appeal to homeowners and families concerned about passing property between generations. But it also raises questions about how the proposed tax cuts would be funded, how quickly they could be introduced and whether voters will be persuaded that the party’s economic priorities match their own.
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