Kemi Badenoch has just thrown another massive political grenade into the Westminster gossip machine – and this one involves your family home, £1 million and a very unhappy Reform UK.
The Conservative leader has unveiled a major promise that could see inheritance tax scrapped on family homes if the Conservatives return to government.
And she didn’t stop there.
Under the proposed changes, couples would also be able to pass an additional £1 million tax-free to their children.
The whole package is expected to cost around £6 billion.
“Nobody’s Taking Mum and Dad’s House!”
Badenoch made the announcement during her Conservative Party conference speech in Birmingham, where she leaned heavily into the Tories’ traditional home-owning credentials.
Her message was pretty simple: people work hard to buy their homes, so they should be able to pass them down to their children and grandchildren without the taxman taking a slice.
The proposed change would remove the value of a family home when calculating an estate for inheritance-tax purposes.
And for couples?
There’s an extra £1 million tax-free allowance on top of that.
Basically, Badenoch is saying:
“You’ve built the house. You’ve paid for the house. Now your children can have the house.”
Cue applause.
But There’s a £6bn Price Tag…
Of course, Westminster never gets a juicy tax announcement without someone immediately asking:
“Who’s paying for all this?”
The Conservatives say they’ve identified around £70 billion in savings, with £35 billion earmarked for reducing the deficit.
Badenoch also made clear that she wasn’t promising to abolish inheritance tax altogether at least not yet because the Conservatives say other priorities, including defence, prisons and deficit reduction, have to be funded first.
So the message is basically:
Inheritance tax isn’t going completely… but your family home could get a VIP exemption.
Reform UK Immediately Has Something to Say
And naturally, Reform UK wasn’t going to sit quietly in the corner.
The party claimed that 98% of homeowners would not actually benefit from Badenoch’s proposal, based on its analysis using Savills figures.
Reform also pointed out that couples can already pass up to £1 million, including their home, free of inheritance tax under existing rules.
Robert Jenrick didn’t exactly hold back either.
He accused Badenoch of failing to go far enough and argued that Reform’s proposal to increase the personal tax allowance would benefit a much wider group of people.
So, in other words…
The Tory-Reform family feud continues.
Labour Is Not Clapping
And then Labour entered the chat.
Labour chair Bridget Phillipson accused the Conservatives of prioritising wealthy people rather than ordinary families struggling with the cost of living and social care.
The argument from Labour is that Badenoch’s proposal isn’t really about helping the average household – it’s about giving another tax advantage to people with valuable estates.
Ouch.
But Economists Aren’t Exactly Throwing Confetti
Economist Paul Johnson, former head of the Institute for Fiscal Studies, was particularly unimpressed.
He described the proposal as a “very, very bad policy”, arguing that it could encourage wealthy older people to remain in large properties rather than downsizing.
His concern is that the policy could create an incentive for people to hold onto valuable homes simply because they know those properties can eventually be passed on without inheritance tax.
So while Tory activists were applauding…
Economists were basically standing at the back saying:
“Hang on a minute…”
And Badenoch Had Plenty More to Say
The inheritance-tax announcement was only one part of a speech packed with attacks on her political rivals.
Badenoch took aim at Reform UK and Nigel Farage while simultaneously telling Conservatives that they need to win back voters who have abandoned the party for Reform.
She also attacked Labour and Andy Burnham over public spending and promised a low-tax, low-spending Conservative government if her party wins the next election.
And judging by the atmosphere inside the conference hall, Conservative members were loving it.
There were up to 15 standing ovations during the speech.
Is Kemi Finally Feeling Like the Boss?
There’s definitely been a different mood around Badenoch compared with the last Conservative conference.
She appeared confident, received plenty of applause and seemed much more comfortable leading the party.
But here’s the awkward bit…
The Conservatives are still trailing badly in many opinion polls and remain behind Reform in several measures of support.
So a room full of cheering Conservative activists is one thing.
Convincing the entire country?
That’s the real challenge.
For now, though, Badenoch has thrown down the gauntlet:
No inheritance tax on family homes. An extra £1 million for couples. A £6 billion price tag. And a very clear message to Reform that the Conservatives intend to fight for those voters rather than surrender them.
Westminster, grab the popcorn.
This Conservative-Reform drama clearly isn’t over yet.
