Nigel Farage’s promise to slash taxes if he wins the next general election does not add up, Britain’s top economic think tank has warned.
The Reform UK leader on Tuesday touted plans to hike the threshold for paying income tax and restore winter fuel payments for pensioners as he declared the party as the “true party of workers”.
But, just hours after the arch-Brexiteer’s speech, the Institute for Fiscal Studies (IFS) said his plans would cost tens of billions of pounds and he had failed to say how they would be funded.
Senior economist Stuart Adam told BBC Radio 4’s World at One programme that Reform’s plans to hike the income tax threshold from £12,500 to £20,000 “dwarfed” his other announcements, which included getting rid of the two-child benefit cap and the full restoration of winter fuel payments.
He said the tax threshold plan would cost between £50bn and £80bn and warned that “if they’re going to be a party of government, they would have to make those numbers add up”.
Mr Adam said: “Those are all significant things, and they are high-profile new public announcements, but actually, they are all still dwarfed by some of the big policies that were in the manifesto last year, and today Nigel Farage recommitted to increasing the income tax allowance to £20,000, which – depending on details – might cost £50bn, £60 bn, £70 bn, £80 bn, relative to other policies where we might be talking £1bn, £2 bn, £3 bn each.
“So the big story is still those very big tax cuts and how they would ultimately be paid for.”
He added that the announcements by Mr Farage this morning were much smaller than last year’s “very radical” manifesto published by Reform UK for the general election.
“As it stands, I don’t think they have really set out how they would pay for such big giveaways,” Mr Adam said. “Of course, they don’t have to do that yet, we’re not yet at a general election. But at some point, if they’re going to be a party of government, they would have to make those numbers add up.”
Asked on Tuesday how his plans would be funded, Mr Farage promised Reform would save money by slashing the net zero agenda and cutting the bill for housing asylum seekers in hotels and elsewhere.
Together, the measures would save up to £50bn per year, he claimed. Mr Farage added that Reform could save £7bn per year by cutting the amount spent on arms-length government bodies, or quangos, if it won the next election.
Overall, Mr Farage said the plans would save £350bn over the course of a parliament.
He added: “You can argue about numbers adding up, you can probably argue that at no point in the history of any form of government has anybody ever thought the numbers added up.
“We take a fresh approach to everything. I think what I’ve done today is to give you an idea of the direction of policy, of priorities, of what we think is important, what we think it is going to cost and how we think we’re going to pay for it.
“I don’t think anybody at this stage, with a general election some years away, could frankly do more than that. And I believe what I have presented today is credible.”
Labour attacked Mr Farage’s “fantasy promises” and compared the Reform leader to Liz Truss, warning that he would devastate the finances of families across Britain.
Labour chair Ellie Reeves said: “Those families don’t need to be told what the consequences would be of this nonsense. They live through it every month through the higher mortgages, higher rents, higher prices, and higher bills inflicted upon them by the last government.”
She insisted Labour is delivering in government, warning that “all Reform offer is a return to the chaos of Liz Truss”.
