Kemi Badenoch has vowed to abolish inheritance tax on family homes, using her speech at the Conservatives’ annual conference in Birmingham to position them as the party of aspiration again.
Vowing to let voters “keep more of what they earn” if her party returns to power, the Conservative leader also said she would allow a couple to leave £1m to their children tax-free, on top of the value of their home.
The move would mean the number of families paying inheritance tax will fall by more than half, Ms Badenoch said as she accused Labour of being “addicted to welfare” and treating income and savings as “theirs to take and hand out.”
“The Labour Party think it is selfish to pass on what you have earned to your children. We don’t,” she said.
Senior figures in the party confirmed to The Independent that the plan was to “ensure the middle classes do not need to pay inheritance tax”, claiming that under Labour plans, the number of families hit by inheritance tax would leap from about 5 per cent to 16 per cent over the next 25 years because of the price of property.
Inheritance tax is charged at 40 per cent on estates valued above £500,000, while couples can combine their allowances, raising the threshold to £1 million.
The tactic had echoes of George Osborne’s calculated move on inheritance tax in 2007, when his pledge to raise the threshold dissuaded the then prime minister Gordon Brown from calling an early election and paved the way for the Tories to return to government in 2010.
The pledge to slash inheritance tax was the latest in a raft of new policy pledges unveiled at the Tory conference, including:
- Halving the rate of employer national insurance on earnings for people aged between 21 to 24.
- Blocking school leavers from moving straight onto out-of-work benefits in what they describe as a “tough love” approach to boost youth employment.
- Scrapping the so-called “mansion tax” on properties in England with a value higher than £2 million, due to come into effect in 2028.
- Cutting red tape and abolishing arms-length bodies including Natural England in a bid to speed up development and reduce the cost of new homes for buyers.
- Investing £10bn over 10 years in a new “Britannia Shield”, a defence system which would seek to protect Britain and its overseas bases from drone and missile attacks.
Meanwhile, in a passionate speech to the party faithful, Ms Badenoch also made it clear that there would be no deal with Nigel Farage and Reform UK to build a coalition to stop Labour, which has seen a resurgence in the polls since Andy Burnham became prime minister.
“We are going to win, not for ourselves, but for our country. For every hard-working person out there, for everyone who wants to see common sense restored, for everyone who wants to see Britain working again,” she said.
“We are going to win for everyone who wants to see our great country united.”
She mocked Reform for last year “measuring the curtains for Downing Street” to this year “measuring the curtains for their prison cells”, and claimed the Conservatives were united after an “export boom of drama queens” following the defections of a handful of senior figures, including Robert Jenrick and Suella Braverman, to Nigel Farage’s party.
Highlighting the recent controversy in Reform UK over “dodgy donations”, she said: “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.”
Ms Badenoch needed a tub-thumping speech after recent polling suggested her party was stagnating, with a survey from More in Common showing the Conservatives down one point at 21 per cent, with Reform up three to 24 per cent and Labour on its highest level for almost two years, up two to 29 per cent.
She received a standing ovation and plaudits from outside the conference hall for directly taking on the rise of racism and so-called ethnonationalism in the UK inspired by Reform and Rupert Lowe’s Restore Britain.
The speech contrasted strongly with her make-or-break address at the conference last year, where her leadership was still uncertain. Instead, in Birmingham this year, Ms Badenoch was clear that the party was hers and she hailed the “unity” of her shadow cabinet after years of plotting and civil war.
The Tories have put the economy at the top of their agenda at their conference this autumn, focusing less on the so-called “culture wars” that dominated previous years.
Ms Badenoch said the party would adopt a “tough love” approach to slash the benefits bill and get more young people into work.
“We need to put the fair back in welfare,” she said. “It is morally wrong to tell people suffering bouts of mild anxiety that they are disabled and cannot work.”
Attacking the Labour government, she said: “It’s the same old high tax, high spend Labour. No common sense.
“Addicted to welfare. Drowning our country in debt. Choking our economy with taxes.”
Reviving the economy would be the “central organising principle” of a future Conservative administration, she said, but political opponents have accused the Conservatives of playing “fantasy economics” by understating the cost of their plans, which the Tories insist are fully funded.
Labour chair Bridget Phillipson 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.”
Liberal Democrat Leader sir Ed Davey claimed to have found a £33bn black hole in Ms Badenoch’s The Right way document published ahead of the conference.
Sir Ed said: "This £33bn black hole proves that 'Kemistry' is just Trussonomics 2.0. Kemi Badenoch is lecturing the country on fiscal responsibility while making tens of billions in unfunded promises - a dangerous experiment destined to blow up the public finances.”
Questions also linger over the Tories’ long-term commitment to the triple lock, which Mr Burnham has pledged to adjust in order to help fund a new national care service.
Mrs Badenoch has said current Conservative policy is to keep the state pension guarantee but said it would be “difficult” to commit to reinstating the policy if Labour changed or scrapped it.
