Badenoch Vows to Axe Inheritance Tax on Family Homes in 'No-Nonsense' Pitch to Voters

Conservative leader Kemi Badenoch has used her keynote address at the party's Birmingham conference to promise sweeping changes to inheritance tax, framing the Tories as a "no-nonsense" alternative to both Labour and Reform UK.

Speaking at the Symphony Hall, Badenoch committed the next Conservative government to legislating so that no one would ever pay inheritance tax on their family home, while also allowing couples to pass on an additional £1m free of the tax. She said the combined measures would cut every inheritance tax bill and reduce the number of families liable for the charge by more than half.

The proposals represent one of the most significant tax announcements by the Conservatives since their 2024 general election defeat. Inheritance tax, which is levied at 40% on the value of an estate above a set threshold, has long been a target of Conservative activists who view it as a punitive levy on aspiration and family wealth.

Under the existing system, estates valued at more than £325,000 can face the tax, with the threshold rising to £500,000 if a home is left to children or grandchildren. Married couples and civil partners are also able to transfer unused allowances between one another, effectively allowing some households to shield up to £1m already. In the 2023-24 financial year, just 4.72% of UK deaths resulted in an inheritance tax charge, but the levy raised approximately £7bn for the Treasury.

Badenoch's announcement goes further than the current rules by promising to remove family homes from the inheritance tax net altogether. She described the tax as something that was "supposed to be a tax on the super wealthy" but which had become "a tax on ordinary middle-class families in every corner of our country."

The Conservative leader was careful to temper expectations, however. She said her ambition was to abolish inheritance tax entirely "as soon as we can afford it," but stopped short of making that an immediate commitment, citing existing spending pressures on defence, prisons and the wider economy. The party has estimated the cost of its inheritance tax plans at around £6bn a year and claims to have identified £71bn in potential savings across government spending, including welfare cuts, to fund them.

The speech, which lasted 66 minutes, was as much about positioning as policy. Badenoch sought to draw sharp distinctions between the Conservatives, Labour and Reform UK, telling activists they face a "battle for the soul of this nation." She argued her party is "renewed" and "coming back" after its historic defeat, and directly acknowledged the party's struggles in the polls, where it currently trails both Labour and Reform.

Borrowing a retail metaphor, Badenoch likened the Conservative brand to Marks and Spencer, saying the retailer had "adapted their style for today's market and people are flooding back." She added: "Just like M&S, we must learn from our mistakes, win back trust and make people feel good about our party again." She conceded that while voters are "looking through the shop window" and "like what they see," not enough are yet "buying," and said: "we need to fix that."

A significant portion of the speech was directed at Reform UK and its leader Nigel Farage. Badenoch quipped that the Conservatives have experienced an "export boom of drama queens going to Reform," before describing her own party as "the no drama party" and "the no-nonsense party." She ruled out any election pact with Reform, telling the hall: "To those who say 'unite the right', we are not uniting with that." She characterised many Reform voters as "our people," adding: "We let them down and we want them to come back home."

Badenoch also made a personal appeal on issues of identity, saying she did not want to live in a country run by people who "debate whether my mixed-race children are English." The remark appeared aimed at distinguishing her party from the more confrontational rhetoric associated with parts of the right.

Prime Minister Andy Burnham — named in the source text as the Labour leader — was a recurring target. Badenoch labelled him a "Paddington Bear prime minister" who was "hoping that the problems will just go away," and accused him of wanting to "live in the past."

The Conservative leader also referenced other policies announced during the conference, including a £10bn anti-missile defence system, 50,000 new prison places, and a plan to halve the rate of employer national insurance on earnings for workers aged between 21 and 24. The party has additionally pledged to scrap the "cliff edge" that causes parents in England to lose childcare support.

Reaction from rival parties was swift and dismissive. Labour Party chairwoman Bridget Phillipson said: "The Tories haven't changed," accusing Badenoch of choosing "to do nothing to help ordinary families struggling with the cost of social care, prioritising the wealthiest instead."

Reform UK economy spokesman Robert Jenrick — a former Conservative MP — said Badenoch had "chickened out of doing anything big" and was "for the 2%." He contrasted the Tory inheritance tax plans with Reform's proposal to raise the tax-free personal allowance to £15,000, which he said would give everyone a £500 tax cut. "The Tory Party is looking after its own in Kensington, Reform is looking after the country," he said.

The exchanges underline the electoral challenge facing Badenoch. With the next general election still some way off, the Conservatives must simultaneously rebuild trust among voters who abandoned them in 2024 and fend off Reform's encroachment on their right flank. The inheritance tax pledge is designed to appeal to homeowners and aspirational families — a core Conservative demographic — while the "no-nonsense" framing attempts to project competence and seriousness in contrast to what Badenoch portrays as the "circus" of Reform and the drift of Labour.

Whether the strategy succeeds may depend on whether voters believe the numbers add up and whether the party can present a coherent alternative on the issues that matter most to households, from the cost of living to social care. For now, Badenoch has given her party a clear dividing line — and a promise that, if delivered, would reshape how British families pass on their wealth.