Badenoch Vows to Shield Family Homes from Inheritance Tax in Conference Pitch

Kemi Badenoch has committed the Conservative Party to removing family homes from inheritance tax and allowing couples to pass on up to £1m free of the levy, using her keynote conference address in Birmingham to draw a sharp dividing line with her political rivals.

The Conservative leader told party members packed into Symphony Hall that a future Tory government would legislate so that no one pays inheritance tax on their family home, describing the current system as one that has drifted far from its original purpose. Inheritance tax, she argued, was intended to target the extremely wealthy but now falls on ordinary middle-class families "in every corner of our country."

Under the plan outlined in her speech, couples would additionally be able to leave £1m tax-free. The Conservatives say the combination of measures would mean every inheritance tax bill is reduced and the number of families liable to pay the tax would fall by more than half. The party estimates the policy would cost around £6bn a year, which it believes can be covered from £71bn of identified government savings, including cuts to welfare.

The current regime allows estates worth more than £325,000 — or £500,000 when a home is passed to children or grandchildren — to be taxed at 40% on the value above those thresholds. Married couples and civil partners may transfer assets between one another, and in 2023-24 only 4.72% of UK deaths triggered an inheritance tax charge, raising roughly £7bn for the Treasury.

Badenoch framed the announcement as an act of long-term ambition rather than an immediate giveaway. She said her ultimate goal was to abolish inheritance tax entirely "as soon as we can afford it," but conceded she could not make that promise now because of existing commitments on defence, prisons and the wider economy. The staged approach allows her to signal direction of travel while deflecting charges of fiscal irresponsibility.

The inheritance tax pledge formed the centrepiece of a 66-minute speech that was as much about political positioning as policy. Badenoch sought to characterise the Conservatives as the "no-nonsense party," contrasting that with what she called the "circus" of Reform UK. She also accused Prime Minister Andy Burnham of wanting to "live in the past," labelling him a "Paddington Bear prime minister" who hopes problems will simply disappear.

Addressing the internal debate on the right of British politics, Badenoch was emphatic that she would not pursue an electoral pact with Reform UK, a stance that drew one of the loudest responses of the afternoon. She said many Reform voters were "our people" who had been let down, adding that she wanted them to "come back home." But she rejected the argument that the right should unite behind a single vehicle, saying: "To those who say 'unite the right', we are not uniting with that."

Badenoch also addressed questions of identity and belonging, saying she did not want to live in a country run by people who "debate whether my mixed-race children are English." The remark, aimed at parts of the political spectrum she regards as peddling narrow conceptions of national identity, underlined her attempt to combine cultural confidence with a broader appeal.

She leaned heavily on a retail metaphor to explain her plan for revival. Comparing the Conservatives to Marks and Spencer, she said the brand had "adapted their style for today's market" and that customers were "flooding back." In the same way, she argued, her party must learn from its mistakes, win back trust and make voters feel good about it again — an acknowledgment that the Conservatives are still recovering from a historic general election defeat in 2024.

Badenoch was candid about the party's polling position, conceding that voters are "looking through the shop window" and "like what they see" but that "not enough of them are buying yet." She described the situation as one that must be fixed, a rare public admission of the gap between the party's self-image as renewed and its standing with the electorate.

The speech also pulled together a series of policies announced in the preceding days, including a £10bn anti-missile defence system, 50,000 additional prison places, and a halving of the rate of employer national insurance on earnings for workers aged between 21 and 24. The party has further pledged to scrap the "cliff edge" that causes parents in England to lose childcare support.

Rival parties were quick to attack the inheritance tax plans. Labour Party chairwoman Bridget Phillipson said the Tories "haven't changed," arguing that Badenoch's choice was to do nothing for ordinary families struggling with the cost of social care while prioritising the wealthiest. The criticism reflects a broader Labour strategy of casting the Conservatives as out of touch on tax and public services.

Reform UK's economy spokesman, Robert Jenrick, a former Conservative MP, said Badenoch had "chickened out of doing anything big" and was governing for "the 2%." He contrasted the Tory approach with Reform's promise of a £500 tax cut for everyone by raising the tax-free personal allowance to £15,000, saying his party was "looking after the country" while the Conservatives looked after "their own in Kensington."

With the Conservatives trailing both Labour and Reform in the polls, the conference speech was designed to serve multiple audiences at once: party members who want a clear sense of direction, voters tempted by Reform, and the wider public that remains sceptical of a party seeking a fifth term in office after more than a decade in government. Whether the inheritance tax pledge and the "no-nonsense" branding can shift those numbers remains the central test of Badenoch's leadership.