By Hannah McKay
BIRMINGHAM, Oct 7 (Reuters) – The leader of Britain’s opposition Conservatives, Kemi Badenoch, pledged on Wednesday to abolish inheritance tax on family homes and let couples pass on an additional £1 million ($1.3 million) without incurring the levy if the party wins power.
The Conservative Party, which has spent more time governing Britain than any other party, now sits third in opinion polls after years of political chaos and infighting in the aftermath of the 2016 vote to leave the European Union.
On the final day of the Conservative Party conference, Badenoch put tax cuts and growing the economy at the heart of her speech, framing the next election as a “battle for the soul of this nation” and contrasting her economic vision with that of the governing Labour Party.
Badenoch said she would like to abolish inheritance tax entirely when the British government can afford it, which is currently 40% of an estate’s value over £325,000, or above £500,000 if a home is given to a direct descendant.
“I believe the people who work hard and save should be rewarded for that effort,” Badenoch said.
BADENOCH SAYS WORK TO DO TO RESTORE TRUST
Polling suggests a cut in or abolition of inheritance tax would be broadly popular. Inheritance tax is regularly named in polls as Britain’s most disliked levy even though only about 5% of wealthy estates pay the levy.
At its current level, the tax is expected to raise about £14.7 billion by 2030/2031, as rising property prices, particularly in London, mean a greater proportion of people are liable to pay it, according to research by the House of Commons.
In the speech, Badenoch cast herself as a champion of lower taxes and government spending compared to the state-directed economic plans of Prime Minister Andy Burnham’s Labour Party.
Badenoch said Burnham’s policies would make Britain “poorer” and accused him of wanting to spend “money we don’t have on things we can’t afford”.
She also proposed to cut employer National Insurance social security contributions from the current rate of 15% to 7.5% for 21- to 24-year-olds to help them find work.
Badenoch admitted there was “still a lot of work to do” to restore public trust in her party.
“People are looking through the shop window, they like what they see, but not enough of them are buying yet,” she said. “We need to fix that.”
($1 = 0.7560 pounds)
(Writing by Andrew MacAskill; Editing by Alison Williams)
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