Kemi Badenoch has announced the Conservatives would abolish inheritance tax on family homes if elected, prompting immediate criticism that she is prioritising cutting taxes for the rich. The Tory leader also said couples would be able to leave behind an additional £1m tax-free 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 5% do so – would fall by more than a half, Badenoch said, with the plan expected to be paid for from £70bn in savings the party says it has identified.
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. It also prompted accusations that 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.” Reform UK suggested Badenoch’s inheritance tax plans would only affect 2% 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.” The Labour party chair and cabinet minister, 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.” The TUC’s general secretary, Paul Nowak, said: “This is a tax paid only by the very richest estates – 95% pay no inheritance tax at all.
Cutting it would do nothing for ordinary people. This is the same old Tory playbook: cutting taxes for their rich mates and leaving working people to pick up the bill. They are a party for inherited wealth, not workers.” 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 their catastrophic 2024 election defeat, faced a long path to recovery.
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,” she said. Senior Tories have been urging Badenoch to focus more on the economy, which they hope will help them to win back millions of votes in their traditional heartlands, and to pivot away from culture wars and migration. In her speech, Badenoch said 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.
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