Badenoch pledges no inheritance tax on family homes

Kemi Badenoch has used her closing speech at the Conservative Party conference in Birmingham to promise that no family will pay inheritance tax on its home. She said the next Conservative government would legislate so nobody ever pays inheritance tax on their family home. Couples would also be able to leave an additional £1 million tax-free, and she said every inheritance tax bill would be cut, with the number of families paying the tax falling by more than half. She set out an ambition to abolish inheritance tax altogether as soon as it is affordable.

The package also includes a promise of no stamp duty when people buy a home, no mansion tax when they live in it, and no inheritance tax when they pass it to children or grandchildren. The mansion tax referred to is Labour's proposed levy on homes worth more than £2 million, which opponents say would cost around £2,500 a year. During the conference, the party had already promised to scrap that levy and to cut taxes. Other announcements included a cut in employer national insurance for younger workers, with briefings focusing on 21 to 24 year olds and a pledge to halve contributions for under-25s. Badenoch also repeated support for building a third runway at Heathrow.

Badenoch had earlier declined to confirm that she would abolish inheritance tax. In an interview before the speech, she said she had not announced abolition and called inheritance tax a problem that affects the middle class. She argued that only around one in 20 estates pays the tax, but that rising house prices have dragged more ordinary families into it, while the very wealthy can use trusts. She said any tax cuts would have to be paid for, and that the Conservatives are the party of fiscal responsibility.

Her speech framed the next election as a battle for the soul of the nation and a battle of ideas. She said Labour wanted to wind back the clock to failed ideas of the past, and that it treated people's income, pensions and savings as theirs to take and hand out. She set out a golden rule under which half of any savings found would go to cutting the deficit and half to projects that could drive growth. The party says it has identified around £70 billion of savings, though questions remain about whether the sums add up.

Reaction was divided. The conference hall gave her a long ovation, with reports of 15 standing ovations during a speech lasting an hour and five minutes. Labour said she was prioritising the wealthy. Reform UK's economic spokesman Robert Jenrick said she was helping the top 2 per cent, while Reform would help the other 98 per cent. The Liberal Democrats described the plans as Trussonomics and said the sums did not add up.

Badenoch also used the speech to rule out any deal with Reform UK. She said she would rather have another election than govern without an overall majority, and urged Reform voters to return to the Conservatives. She attacked Reform over recent scandals and said character, conduct and standards matter. She said she did not want to explain to her son that some people do not think black England players are English. Her comments followed criticism of remarks by Suella Braverman and Zia Yusuf.

The Conservatives remain well behind in the polls, with one YouGov poll putting them around 20 per cent, lower than their general election result. Badenoch is more popular than her party, and the conference mood has been described as more upbeat than a year ago. But the party faces a large mountain to climb, with Labour polling better under Andy Burnham and Reform still competing for right-leaning voters. The big parties have now finished their conferences, with the SNP due to meet next week.