Kemi Badenoch to Pledge Inheritance Tax Cut in ‘Battle for the Soul of the Nation’ Conference Keynote

Kemi Badenoch will use her keynote speech at the Conservative Party conference in Birmingham on Wednesday to promise cuts to inheritance tax and employer national insurance, pitching the next election as a “battle for the soul of this nation”, according to advance briefings of the address reported by The Times.

The Conservative leader, who is due to speak at 11:15am, will tell delegates that voters face the starkest choice over the direction of the country since Margaret Thatcher’s 1979 election victory, as she begins to construct the party’s election strategy, The Times reports.

Badenoch will announce a cut to the 40 per cent inheritance tax, which currently applies to the value of estates above £325,000 — or above £500,000 where a home is left to a direct descendant. She will also halve employer national insurance for workers aged between 21 and 24, cutting the rate to 7.5 per cent in an attempt to tackle the youth unemployment crisis.

According to the party, the youth national insurance proposal would cost £2.3 billion a year and save companies an average of £1,545 for every young worker they employ, with the Conservatives estimating it would create 33,600 jobs by the end of the decade.

The policies will be paid for, the party says, by more than £30 billion in welfare cuts under what it calls the “Conservative savings plan” — cuts that would also contribute toward paying down Britain’s £3 trillion debt.

“Our children will already inherit a more dangerous world,” she is expected to say. “They should not inherit our bloated debts as well.”

In extracts briefed ahead of the speech, Badenoch contrasts the Conservatives’ approach of cutting government spending to fund tax cuts and deficit reduction with what she calls the Labour government’s “reckless” handling of the public finances. “There is a fight coming that we have not seen in this country for more than half a century,” she will say. “It will be a battle for the soul of this nation that goes to the very core of who we are and what kind of country we want to be.”

“On one side, we have a government that thinks that your income, your pension and your savings are theirs to take and then hand out as they see fit. On the other side is us, a Conservative Party fighting for the belief that what people earn belongs to them, not government,” she will say, according to The Times.

The speech puts the economy firmly at the centre of the Conservatives’ agenda at this year’s conference, with the party focusing less on the culture-war themes that dominated previous gatherings. Badenoch will accuse Andy Burnham’s Labour of wanting to “wind back the clock to failed ideas of the past” and warn that “something is going to break” without better economic growth, the Leigh Journal reports.

The inheritance tax pledge follows remarks Badenoch made to the Sunday Times ahead of the conference, in which she called cutting the levy “morally right”, arguing: “It is morally right that people don’t get taxed twice. It is morally right that if you work hard and want to give something to your children the Government doesn’t take it away.” But she has stressed that she would not announce tax cuts unless the party can show how it would pay for them.

Speaking to BBC Breakfast on Tuesday, the day before her keynote, Badenoch acknowledged the tension directly. “People know I want to cut inheritance tax,” she said, adding that she had been influenced by farmers taking their own lives amid the dispute over Labour’s changes to inheritance tax relief on agricultural land. “We have to find the money to pay for it. We can’t cut taxes willy-nilly,” she said.

In April, the Labour government changed the law to force farmers to pay inheritance tax for the first time when they pass on an estate worth £2.5 million or more, a change that has become a persistent point of political contention.

The speech caps a conference in which the Conservatives have rolled out a string of policy announcements: an end to the childcare “cliff edge” that stops parents earning more than £100,000 from qualifying for free childcare, estimated to cost £700 million a year; the scrapping of the so-called “mansion tax” on English properties worth more than £2 million; a £10 billion “Britannia Shield” national missile and drone defence system; and a promise to build 50,000 prison places in England and Wales.

The party enters the final months of the year trailing in the polls — behind Labour and narrowly behind Reform UK — making this conference Badenoch’s most important platform yet for setting out a government-in-waiting programme.

Why It Matters

The structure of this announcement is as revealing as its content. By pairing two tax cuts with a headline £30 billion in welfare savings, Badenoch is attempting to solve the credibility problem that sank Liz Truss: unfunded tax cuts. Her repeated refrain — that she will not cut taxes without showing how they are paid for — is designed to inoculate the party against the charge of fiscal recklessness. The test, however, is specificity: £30 billion of welfare cuts is a vast figure, and the political cost of identifying them in detail has historically been where such plans meet reality.

The choice of taxes is equally deliberate. Inheritance tax touches relatively few estates but runs unusually deep as an emotional issue — the sense of being taxed twice, once in life and once in death. That is why Badenoch frames it as a moral question rather than an economic one. The youth national insurance cut, by contrast, is aimed squarely at a group the Conservatives have struggled to reach: younger voters, who face a genuine unemployment problem and who have drifted decisively away from the party.

There is also a flank to guard. The Conservatives are polling narrowly behind Reform UK, and “battle for the soul of the nation” is language that tries to speak to Reform-curious voters without the party moving its official position. Whether tax-cutting economic policy can compete with Reform’s harder-edged cultural offer is an open question — and one the coming weeks of polling will begin to answer.

Watch for three things: the full text of Wednesday’s speech, Labour’s immediate response on the costing gap, and whether the party publishes a breakdown of the £30 billion savings plan. If that breakdown never materialises, the pledges will be judged less as a programme for government and more as conference-season positioning.

Sources

• The Times — Kemi Badenoch to pledge inheritance tax cut in conference speech
• The Times — Kemi Badenoch promises tax cuts in ‘battle for the soul of this nation’
• Leigh Journal — Badenoch says Tories will ‘battle for soul of nation’ in tax-cutting speech
• Leigh Journal — Badenoch hints she is open to inheritance tax changes as Tory conference begins