Conservative leader Kemi Badenoch has unveiled plans to abolish inheritance tax on family homes if her party wins the upcoming election, a proposal that has drawn immediate criticism for favoring wealthier voters. At the party conference in Birmingham, Badenoch also announced that couples would be allowed to pass on an additional £1 million tax-free to their heirs under the scheme, which aims to strengthen support among affluent voters in southern England.

Currently, fewer than 5% of families pay inheritance tax, and Badenoch estimates that her plan would cut that number by more than half. She indicated the policy would be funded through £20 billion in savings the Conservatives claim to have identified. “My ambition is to abolish inheritance tax altogether, as soon as we can afford it,” she said. “I believe the people who work hard and save should be rewarded for that effort. So this is my guarantee: no stamp duty when you buy your home, no mansion tax when you live in your home, and no inheritance tax on your home when you pass it to your children or grandchildren.”

The inheritance tax reduction is part of a wider policy package targeting wealthier middle-class voters, including childcare support for households earning more than £100,000 and a repeal of the so-called mansion tax. These measures reflect an effort to reclaim voters who deserted the party in the last general election.

However, the inheritance tax proposal has sparked concerns about its potential effects on the housing market, with critics warning it could discourage elderly homeowners from downsizing, thereby exacerbating affordable housing shortages. Opponents also argue the plan unfairly benefits the wealthy at the expense of public services.

Tax Justice UK described the proposal as a “massive inheritance tax giveaway” that would reduce funding for essential public services at a time of need. Paul Nowak, general secretary of the Trades Union Congress (TUC), said inheritance tax is paid only by the richest estates and called the policy “the same old Tory playbook” of cutting taxes for the wealthy while ordinary workers bear the burden.

Badenoch acknowledged the challenges facing her party, which continues to trail in the polls following a severe defeat in the 2024 election. “We have changed our party. 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.

While senior Conservatives have urged Badenoch to focus more on economic issues to regain lost ground, her conference address divided much of its attention between policy proposals and attacks on political opponents. She rejected suggestions that the Conservatives should collaborate with Nigel Farage’s Reform UK party, warning that such an alliance would damage the Conservative brand irreparably.

“A year ago, those politicians were measuring up the curtains for No 10. Now, some of them are measuring up the curtains for their prison cells,” she said. “So, to those who say ‘unite the right’, we are not uniting with that. People deserve better and we are going to give them better than that: character, conduct and standards matter.”

Badenoch also confronted controversial remarks from former Conservative Home Secretary Suella Braverman, who defected to Reform UK and suggested that minority ethnic people could not be English. Badenoch, who is Black, emphasized her pride in being British and condemned attempts to question the national identity of ethnic minorities.

“We must not let these people take us backwards. That is not the country we are,” she stated. “Reform MPs are openly questioning people’s identity. I am proud of my country, I’m proud of our history, all that we have done, and all that we will do in the world.”

Reflecting on her leadership, Badenoch said she has faced intense pressure but expressed confidence in both her own resilience and the Conservative Party’s longevity. “Let me tell you, I’m not someone who gets written off, and neither is the Conservative party. There is a reason our party is still here after 200 years. We have adapted to every single challenge and every single age, and we are doing it again.”