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Opposition parties have criticized recent inheritance tax (IHT) proposals, arguing that the changes disproportionately benefit the wealthiest individuals in the country. The tax, which is applied to the value of an estate upon death, has become a focal point in the ongoing political debate surrounding fairness and support for ordinary families.
Kemi Badenoch delivered a speech at Birmingham’s Symphony Hall to Conservative Party members, framing the current political climate as a “battle for the soul of the nation.” She emphasized that the Conservative Party is revitalized and determined to regain public trust following its significant defeat in the 2024 general election. Addressing those who have shifted their support to Nigel Farage’s Reform party, Badenoch remarked on the “export boom of drama queens going to Reform,” positioning the Conservatives as the “no drama party” committed to straightforward governance. Despite trailing in recent polls behind Labour and Reform, she acknowledged that while voters are interested, more must be done to convert that interest into genuine support.
Badenoch drew a parallel between the party’s reinvention and the successful adaptation of Marks and Spencer, suggesting that the Conservatives must similarly evolve to resonate better with today’s electorate. She stated, “Just like M&S, we must learn from our mistakes, win back trust and make people feel good about our party again.” Notably, she shut down any prospects of an electoral alliance with Reform, describing many of their supporters as “our people” who had been let down but whom the Conservatives want to reclaim. Badeonch rejected calls to “unite the right,” insisting that the party will uphold standards of “character, conduct, and standards,” and rejecting divisive rhetoric about the identity of her mixed-race children. In a pointed jab, she labeled Labour leader Burnham a “Paddington Bear prime minister” who hopes “the problems will just go away.”
Speculation ahead of Badenoch’s speech suggested that updates to inheritance tax policy would be announced. True to predictions, she declared that the Conservative government plans to reform IHT, which she described as “supposed to be a tax on the super wealthy” but which currently impacts “ordinary middle-class families in every corner of our country.” The new policy aims to abolish inheritance tax on family homes so that no one pays IHT on their residence. Additionally, couples would be able to leave an extra £1 million tax-free, reducing overall IHT bills and halving the number of families who will be liable for the tax. The Conservatives estimate this will cost around £6 billion annually, funding it through £71 billion in government savings, including cuts to welfare.
Current IHT rules tax estates valued over £325,000, or £500,000 if a home is passed to children or grandchildren, at 40% on the amount exceeding the threshold. Assets can be transferred between spouses or civil partners without penalty. In 2023-24, 4.72% of UK deaths resulted in IHT assessments, generating approximately £7 billion for the government. Badenoch further expressed a long-term aim to abolish inheritance tax entirely when fiscally feasible.
The announcement drew criticism from political opponents. Labour’s Bridget Phillipson argued that the Conservatives remain disconnected from ordinary families struggling with social care costs, instead favoring the wealthy. Reform UK’s Robert Jenrick accused Badenoch of retreating from meaningful change, alleging that the Tory Party serves only the top 2% while Reform offers more substantial benefits to all citizens through measures like raising the personal tax allowance.
Beyond inheritance tax, Badenoch’s speech touched upon additional recent Conservative proposals, such as a £10 billion anti-missile defense system, the creation of 50,000 new prison places, and halving employer national insurance contributions for workers aged 21 to 24. The party also pledged to eliminate the “cliff edge” in childcare support affecting families earning over £100,000 annually, as well as scrapping the High Value Council Tax Surcharge (HVCTS). This surcharge, often called the “mansion tax,” was set to start in 2028 and applies to owners of properties in England valued above £2 million. Reactions from other parties included the Liberal Democrat leader Sir Ed Davey accusing Badenoch of making “tons of billions in unfunded promises” while lecturing on fiscal responsibility, and Green MP Carla Denyer labeling the Conservatives as champions of billionaires, inequality, and environmental harm
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