Kemi Badenoch has pledged that nobody would pay inheritance tax on their family home under a Conservative government, and that couples would be allowed to pass on an additional £1m tax free.
The Conservative leader made the commitment today in an hour-long speech to her party’s conference in Birmingham, in which she promised to cut “every inheritance tax bill”.
Under the current rules, qualifying estates can pass on up to £500,000, and the qualifying estate of a surviving spouse or civil partner up to £1m, without an inheritance tax liability, according to HM Revenue & Customs. Those thresholds are fixed until the end of the 2029 to 2030 tax year.
The pledge follows Badenoch’s promise last month to restore tax-free shopping for overseas visitors, and comes three weeks before Chancellor John Healey’s Budget on 28 October.
Badenoch said the Conservatives would focus on reducing government borrowing, using half of any policy savings to cut the deficit.
She described the welfare system as “broken” and called for a “tough love” approach. “We spend more on benefits than we raise in income tax,” she said.
The party would build a new welfare system in which everyone who can work will work, she said. People who had not found work within six months would be given a card that could be used only to buy necessities. “No alcohol, no cigarettes, no gambling,” she said.
On youth unemployment, Badenoch said the answer was to “move government out of the way” so that businesses could create jobs.
Badenoch said businesses were being “held back in so many ways”, blaming the planning, tax and energy systems. “Less than one in four major planning applications is decided on time,” she said.
Describing what she believed growth could look like, she said: “It looks like a pensioner doing their food shopping and realising they can afford a little bit more because lower energy prices mean cheaper food.”
She said there would be more cafes and restaurants if rates had been scrapped, and that homes would cost less because the party had removed regulations that drive up building costs. The Conservatives set out deregulation and housing proposals earlier this week, which the party said could cut the cost of a new-build home by up to £50,000.
Badenoch added that it was “time to finally build that third runway at Heathrow”.
She accused Labour of ideas that will “make every single person in this country poorer”, and said a battle of ideas was coming in British politics, going “to the very core of who we are”. She described the Conservatives as a “united team”, said the “drama” of the old party was gone, and said Reform UK voters “deserve better”.
Responding to the speech, Rain Newton-Smith, chief executive of the CBI, said: “Businesses will welcome the Leader of the Opposition’s strong backing for enterprise as the engine of prosperity, as well as her focus on sound public finances and tackling excessive regulation.”
She said the Conservatives were “right to focus on making it easier and cheaper to hire”, particularly young people. She added: “But the bigger prize would be raising the threshold at which employers start paying National Insurance. That would reduce the cost of hiring across the board and give firms greater confidence to create entry-level jobs.”
The CBI called in August for a cut to employers’ national insurance in a report on youth employment. Entrepreneurs also cited the tax after Jeremy Clarkson asked the conference why anybody would set up a business in Britain.
On energy, Newton-Smith said: “With businesses across the country being hamstrung by sky-high energy bills, proposals to deliver cheap, clean and abundant energy will be warmly welcomed.”
