The Conservative Party unveiled a new round of tax pledges aimed at wealthy households at its Birmingham conference. Shadow chancellor Andrew Griffith vowed to scrap a planned "mansion tax" surcharge and set an ambition to end a 60% marginal tax band, while leader Kemi Badenoch signaled a future cut to inheritance tax once funds allow.
Griffith targets the "mansion tax" and high earners
Shadow chancellor Andrew Griffith said on Monday he would reverse a planned council tax surcharge on homes worth more than £2mn if the Conservatives win the next election, calling it "Labour's family homes tax." He has also pledged to extend subsidised childcare to parents earning more than £100,000, ending a "cliff edge" that currently cuts off support for parents earning £1 above that threshold.
Griffith additionally set an "ambition" to end the effective 60% marginal tax rate on earnings between £100,000 and £125,140, though he said eliminating those rates will take time. The pledges form part of a push by Badenoch's party to win back voters in prosperous areas who switched to the Liberal Democrats at the 2024 election.
Badenoch weighs an inheritance tax cut
Speculation is building that Badenoch could use her conference speech on Wednesday to announce cuts to inheritance tax, which currently affects only 5% of estates yet remains unpopular. George Osborne drew a similar playbook in 2007, boosting Tory popularity with a pledge to cut the tax — a policy later vetoed by the party's Liberal Democrat coalition partners. Badenoch's allies say she wants to cut the tax, but only once funds are available.
At the weekend, Badenoch told the Sunday Times: "It is morally right that people don't get taxed twice." Griffith told reporters that cutting inheritance tax would help stem the departure of wealthy individuals from the UK.
The price tag behind the pledges
Inheritance tax is levied at 40% on estates worth more than £325,000, with the threshold rising to £500,000 when family homes pass to direct descendants; a couple can combine allowances to pass on up to £1mn tax-free. The tax is forecast to raise roughly £14bn in 2029-30, similar to the amounts the government collects from alcohol duties or environmental levies.
A 2023 Institute for Fiscal Studies estimate found that about half the benefit of outright abolition would go to the top 1% of estates. Government figures show that cutting the standard rate by one percentage point would cost just under £0.3bn in 2028-29. The party follows a fiscal policy "golden rule" on tax cuts. Any such cut must be met by spending savings split between deficit reduction and further tax cuts. Griffith claims the £400mn cost of scrapping the mansion tax could come from £900mn a year saved by cracking down on unpaid student loans owed by foreign nationals.
Source: Financial Times
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