Kemi Badenoch has announced that the Conservatives would abolish inheritance tax on family homes if elected, prompting criticism that she is prioritising cutting taxes for the rich.
The Tory leader also said couples would be able to leave an additional tax-free sum of £۱m to their families as the party attempts to shore up its traditional base in southern England.
The move would mean the number of families paying inheritance tax – currently less than ۵% do so – would fall by more than a half, Badenoch said, with the £۶bn cost to be paid for by cuts the party says it has identified, including to the welfare bill.
“My ambition is to abolish inheritance tax altogether, as soon as we can afford it,” she told the Conservative party conference in Birmingham. “I believe the people who work hard and save should be rewarded for that effort. So this is my guarantee: no stamp duty when you buy your home, no mansion tax when you live in your home, and no inheritance tax on your home when you pass it to your children or grandchildren.”
The Tories’ policy plans announced this week – also including support with childcare for those earning more than £۱۰۰,۰۰۰ and repealing the mansion tax – have been firmly focused on affluent middle-class voters, many of whom deserted the party at the last election.
They have been welcomed by Conservative MPs and activists, who are relieved that Badenoch appears to be trying to shore up the party’s core support despite her natural proclivity to lean into culture wars on the right.
However, the inheritance tax plans are likely to raise fears about overheating the housing market, giving elderly homeowners an incentive to stay in large family homes rather than downsize. The move also prompted accusations the party was favouring the rich over struggling families.
In a statement, Tax Justice UK said: “Kemi Badenoch has just announced a massive inheritance tax giveaway to some of the wealthiest people in Britain. This is a reckless policy that will deprive public services of cash when they most need them.”
Stuart Adam, a senior economist at the Institute for Fiscal Studies, said: “The biggest beneficiaries would be those with the highest wealth and the most valuable homes. These will mostly be people living in London and the south-east.”
Reform UK suggested Badenoch’s inheritance tax plans would only affect ۲% of houses, the majority in London. Its finance spokesperson, Robert Jenrick, added: “The Tory party is looking after its own in Kensington, Reform is looking after the country.”
Bridget Phillipson, the Labour party chair and minister for equalities, said: “The Tories haven’t changed. Kemi Badenoch has shown that the Tories’ choice is to do nothing to help ordinary families struggling with the cost of social care, prioritising the wealthiest instead.”
Despite the Tories appearing more united this week than they have done for years, Badenoch did acknowledge in her speech that the party, still polling lower than at the time of its catastrophic ۲۰۲۴ election defeat, faced a long path to recovery.
She issued an appeal to Reform voters to back her. “We let them down and we want them to come back home. They deserve better than Reform politicians,” she said. “We have changed our party. There is still a lot of work to do. People are looking through the shop window. They like what they see, but let’s be honest, not enough of them are buying it. We need to fix that.”
Senior Tories have been urging Badenoch to focus more on the economy, which they hope will help them to win back middle-class swing voters in their traditional heartlands, and to pivot away from culture wars and migration.
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Badenoch added that economic growth would be the “central organising principle” of the next Conservative government, cutting red tape in areas such as planning, building a third runway at Heathrow and implementing a new energy policy, while also creating jobs.
Most of her speech, however, was devoted to attacks on her opponents, with the Tories desperate to edge ahead of Reform in the polls and be seen once again as the main opposition party on the right.
Badenoch rejected calls from within her own party to “unite the right” by striking a deal with Nigel Farage’s party – reflecting warnings from her closest allies that doing so would risk toxifying the Conservative brand irrevocably.
She said: “A year ago, those politicians were measuring up the curtains for No ۱۰. Now, some of them are measuring up the curtains for their prison cells.
“The circus goes on and on, and it will never stop because this is who Reform politicians are. So, to those who say ‘unite the right’, we are not uniting with that. People deserve better and we are going to give them better than that: character, conduct and standards matter.”
Badenoch also drew a sharp dividing line with Reform on race, after Suella Braverman, the former Conservative home secretary who defected to Farage’s party, suggested that minority ethnic people could not be English.
“I don’t want to explain to my son when we’re watching our brilliant England team play football that some people don’t think our black players are English,” she said. “I remember back in the day when Ian Wright and John Barnes were playing. Nobody was questioning whether they were English. We certainly didn’t have sitting MPs questioning whether they were English.
“We must not let these people take us backwards. That is not the country we are. Reform MPs are openly questioning people’s identity. I don’t know whether you’ve noticed, but I am black. I am British. I am proud of my country. I’m proud of our history, all that we have done, and all that we will do in the world.”
Badenoch acknowledged that last year her leadership of the party had been under intense pressure. But she added: “Let me tell you, I’m not someone who gets written off, and neither is the Conservative party. There is a reason our party is still here after ۲۰۰ years. We have adapted to every single challenge and every single age, and we are doing it again.”
