Badenoch pledges to end inheritance tax on family homes

Conservative Party leader Kemi Badenoch has announced a plan to remove inheritance tax on family homes and increase the tax-free threshold for couples to one million pounds. Speaking at the party’s annual conference in Birmingham, she outlined measures intended to reduce the number of households liable for the tax by more than half. The proposals represent a significant shift in the party’s fiscal platform as it seeks to distinguish itself from both the Labour government and Reform UK ahead of the next general election.

In her keynote address, Badenoch stated that the next Conservative government would legislate to ensure that no individual pays inheritance tax on their primary residence. In addition to this exemption, she proposed that couples would be permitted to leave an additional one million pounds tax-free. The party estimates that these changes would result in a reduction of inheritance tax bills for all affected parties. Badenoch described the current system as a tax on ordinary middle-class families rather than the super wealthy, arguing that it has become a burden on households across the country.

The Conservative leader acknowledged that the full abolition of inheritance tax remains a long-term objective. She stated that her ambition is to scrap the tax entirely as soon as the public finances allow. However, she noted that immediate implementation is not possible due to existing spending commitments on defence, prisons, and the broader economy. The party has calculated that the proposed changes would cost the Treasury approximately six billion pounds per year. To offset this expenditure, Badenoch said the party has identified seventy-one billion pounds in potential savings, which would include reductions in welfare spending.

Badenoch used the speech to position the Conservatives as a pragmatic alternative to their rivals. She contrasted the party’s approach with what she described as the circus of Reform UK, while accusing Prime Minister Andy Burnham of wanting to live in the past. She referred to Burnham as a Paddington Bear prime minister who hopes problems will resolve themselves without action. The leader also addressed the issue of voter defection, noting that many former Conservative supporters have moved to Reform. She described these individuals as the party’s people and expressed a desire for them to return, while firmly rejecting calls to unite the right with Reform UK.

Rival political parties responded swiftly to the announcements. Labour Party chairwoman Bridget Phillipson argued that the proposals prioritise the wealthiest individuals while doing little to help ordinary families struggling with the cost of social care. She maintained that the Conservative Party has not fundamentally changed its approach. Robert Jenrick, the economy spokesman for Reform UK, criticised Badenoch for failing to make bold commitments. He stated that the party is catering to the two per cent and suggested that Reform’s proposal to raise the personal allowance to fifteen thousand pounds would be more beneficial to the general public.

Sir Ed Davey, the leader of the Liberal Democrats, accused Badenoch of lecturing the country on fiscal responsibility while making unfunded promises worth tens of billions of pounds. Carla Denyer, a Green Party MP, described the Conservative Party as pro-billionaires and pro-inequality. Despite the criticism, Badenoch maintained that the party is renewed and returning to prominence. She cited the retail brand Marks and Spencer as an example of how to adapt to modern markets and win back consumer trust, a strategy she intends to apply to the party’s political brand.

The speech also included references to other policies announced recently, such as a ten billion pound investment in an anti-missile defence system and the creation of fifty thousand new prison places. The party pledged to halve employer national insurance contributions for workers aged between twenty-one and twenty-four. Additionally, Badenoch confirmed plans to remove the childcare support cliff edge for parents earning over one hundred thousand pounds and to scrap the high value council tax surcharge, commonly known as the mansion tax, which is scheduled to take effect in 2028.