By Jacob Reid and Chloe Chaplain | Updated on Oct 07, 2026 at 02:09 PM
Conservative leader Kemi Badenoch pledged to halve the number of people paying the UK’s inheritance tax, as she seeks to re-establish the opposition party’s tax-cutting credentials and draw clearer lines with Labour and Reform UK.
Badenoch said she would exempt family homes from inheritance tax and increase to £1 million ($1.3 million) the value of other assets that couples can leave to their families tax-free. The Conservative leader framed it as part of a broader package of measures to support homeownership, following a pledge last year to abolish the stamp duty on house purchases.
“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,” Badenoch told Conservatives gathered in Birmingham for the party’s annual conference.
Badenoch said she couldn’t immediately endorse the full abolition of inheritance tax, something that she had declined to rule out in interviews and appearances ahead of the speech. “Conservatives will not announce a tax cut without telling you how we are going to pay for it,” she said.
The change inheritance tax would cost £6 billion, according to figures released by the Conservative Party after her speech. She would pay for the lost revenue with a package of £70 billion of savings, half of which would come through cuts to welfare.
The proposal was the latest step in the Conservatives’ efforts to rebuild their political brand after suffering the most comprehensive election defeat in the party’s centuries-old history in 2024. The party’s four-day conference in Birmingham has seen the party attempt to get back to basics, including promising a raft of tax cuts, even as Badenoch moves its agenda on things like immigration and the environment further to the right.
The 46-year-old party leader faces a fight on two fronts, with Prime Minister Andy Burnham at the helm of a resurgent Labour Party and Nigel Farage’s Reform UK continuing to draw many of the voters who helped power the Tories to their last election win in 2019. Both Burnham’s efforts to tack Labour to the left and Reform’s scandals over financial contributions have created an opening for the Tories.
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The party of Margaret Thatcher and David Cameron needs to rebuild its reputation for sound money after the so-called mini-budget that prompted Liz Truss’ resignation as prime minister after just seven weeks. While executives, investors and other attendees at the conference in Birmingham welcomed the commitment to cutting taxes, they’ve said they want to see more evidence that the party will ease pressures on businesses and has the organization and ideas necessary to return to government.
“The Conservative Party hasn’t learned a single lesson since they were kicked out of office,” Labour Party Chair Bridget Phillipson said in response to the speech. “Their credibility on the economy remains in tatters.”
Badenoch has criticized previous Conservative governments for increasing the tax burden. While the public identify the Conservatives as the most trusted party on the economy, they also hold the party responsible for the current economic situation and associate them more with high than low taxes, polling shows.
At the conference the party has also pledged to restore benefits to families within the top 5% of earners, and halve the tax · businesses pay on employees in their early 20s. Badenoch also announced a £10 billion air defense program her party dubbed the “Britannia Shield.”
In the speech that lasted more than an hour, Badenoch also ramped up her criticism of Reform UK, citing donation scandals and statements about race as reasons why her party will not “unite” with them. Having moved toward the party on issues such as immigration and net zero, she’s now trying to highlight how her party differs with its populist rival for a shot at No. 10 Downing Street.
“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, referring to ongoing investigations into their financial affairs, including a £5 million donation to Farage, plus the resignations of two of the party’s Welsh leaders.
Badenoch — who was born in the UK and spent part of her childhood in Nigeria — also made one of her most personnel appeals yet on race issues, trying to separate them from immigration, where she had led her party toward a more hard-line position. Reform Member of Parliament Suella Braverman, who defected from the Conservatives, said last week that she considers herself British, but not English, since she’s of “Asian origin.”
“I don’t want to explain to my son when we’re watching our brilliant England team play football that some people don’t think our black players are English,” Badenoch said. “I don’t know whether you’ve noticed, but I am Black. I am British.”
“To those who say ‘unite the right’, we are not uniting with that,” she said, addressing people who think the two parties should form an electoral pact before the next general election, or prepare for a coalition government.
Elsewhere in the speech, Badenoch: