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THEAMERICANCONSERVATIVE (Iain Macwhirter) - Is Kemi Badenoch Reviving Tory Class War? Fri Oct 9 04:11:19 2026

The Conservative leader pledged to eliminate inheritance taxes on family estates. The post Is Kemi Badenoch Reviving Tory Class War? appeared first on The American Conservative .

UK Special Coverage Is Kemi Badenoch Reviving Tory Class War? The Conservative leader pledged to eliminate inheritance taxes on family estates. UK Special Coverage (Gary Roberts/SOPA Images/LightRocket via Getty Images) Last week, Britain’s Prime Minister Andy Burnham, in his speech to the Labour conference in Liverpool, turned the political clock back to the 1970s, complete with nationalization, big social spending, and attacks on landlords. The Conservative leader Kemi Badenoch, at her own party’s conference Wednesday, went even further back—to the Second World War, after which many stately homes and expensive houses had to be sold to pay death duties, helping to kill the Downton lifestyle. Badenoch promised that if the Tories come to power, “nobody” in the UK will ever have to pay inheritance tax on the family home, the death duty of the 21st century. Presumably, Earl Spencer, the brother of the late Princess Diana, will be able to hand on the family pile at Althorp, worth some tens of millions of pounds. Not only that, he will be able to shelter another million or so under Badenoch’s additional proposals for family wealth transfer. This looks highly regressive. Only the wealthiest 5 percent of estates actually pay inheritance tax in the UK, because families can usually shelter around £1 million under the present rules . Inheritance tax is levied at 40 percent on any estate above £325,000, plus an additional £175,000 for homes being passed down to direct descendants. This overall amount is doubled for spouses or where the home is passed to children, hence the potential £1 million shelter (around $1.3 million). This is big money in today’s Britain. The average house price in the UK is less than £300,000. It is only in central London postcodes and country estates that homes are worth significantly more than £1 million. Labour has done the math and concluded the old class-war Tory party is back in action. The Labour-affiliated general secretary of the Trades Union Congress, Paul Nowak, remarked, “This is the same old Tory playbook: cutting taxes for their rich mates and leaving working people to pick up the bill.” Badenoch’s move also undermines her promise to cut borrowing and pay down the national debt. Inheritance tax is scheduled to yield around £15 billion to the UK Exchequer by 2030. This would be vastly reduced by her asset exemption. Labour can legitimately ask where the money is going to come from to fill that black hole. So, why has the Tory leader exposed herself to the charge that she has gone back to leading the “rich bastards’ party,” as the Conservatives used to be regarded in popular culture? Doesn’t she fear losing all those millions of voters who aren’t in the current inheritance-tax bracket? Well, this is first of all a measure to shore up the core Conservative vote in the wealthier parts of the Home Counties of England. She is also banking on evidence that even people who don’t pay inheritance tax think it is unfair. People have already paid taxes on these assets, so why should they be robbed in death? There is something in that. Yet the Badenoch giveaway is almost certain to perpetuate intergenerational inequality. By far the biggest element of inheritance tax is the value of the family home. The inflation of this asset over the last 50 years has been a major contributor to wealth inequality in Britain. If this policy were implemented, inequality would likely be transmitted further down the generations by exempting this key asset from tax. To repeat: Only people with very expensive homes are being rewarded under this plan. It is a major dilution of an asset tax that has been around essentially since the beginning of the last century, though under various different names: Estate Duty, Capital Transfer Tax and, since 1986, Inheritance Tax. So, is class war back? It does kind of look like that. Until perhaps you look across the pond at the U.S., where the federal estate tax has an exemption of $15 million—$30 million for couples—which is 23 times the UK’s exemption. Moreover, inheritance tax does appear to be going out of fashion. It has been abolished in Canada and Australia and even in social-democratic Sweden and Norway (though the latter has a version of wealth tax). This is partly because inheritance tax raises relatively little money and because it discourages saving and investment. Inheritance tax can force family businesses and farms to sell up just to pay the tax. This not only acts as a discouragement to entrepreneurship; it also means that the goodwill and commitment that are built into a family firm or farm are lost to society. The assets are often sold to corporations or to wealthy individuals who live abroad and don’t pay any inheritance tax in the first place.  Moreover, inheritance tax and the British tax regime generally have become a disincentive for rich people to remain in or move to the UK. According to Bloomberg, Britain has lost nearly half of its billionaire wealth since Labour came to power—around £121 billion. Entrepreneurs like steel tycoon Lakshmi Mittal have left the UK, citing inheritance-tax risks. Maybe Badenoch is hoping to lure them back so that the government can recover the lost income-tax revenues. One of the recent departures, Chris Rokos, had been among Britain’s highest individual taxpayers, contributing £330 million to the public purse. No longer. Britons generally seem to hate billionaires, but when they’re gone, they take their taxes with them. Badenoch is also hoping that other measures outlined in her speech—like cutting the benefits bill, cancelling net zero, building new prisons, halting illegal immigration, and building British defences—will appeal to middle-class British voters. Her other objective was to paint the Tories’ main rivals on the right, Nigel Farage’s Reform UK, as racists. “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,” she said. It’s far from clear that Reform does define Britishness on the basis of race, but she is clearly rejecting any taint of ethnonationalism. Reform UK has attacked Badenoch’s inheritance tax proposal as a desperate handout to a tiny wealthy elite, which they have characterized, Reform UK Shadow Chancellor Robert Jenrick’s words , as a policy for “the 2 percent.” Jenrick used to be Badenoch’s main rival for the Conservative leadership. Times change. The post Is Kemi Badenoch Reviving Tory Class War? appeared first on The American Conservative .