As Nigel Farage prepares to abandon pledges of up to £90 billion in tax cuts, there will be plenty of people arguing that his Reform party is giving up on its free market, small state roots. Other critics may say this is proof that Reform is shifting further to the left and pandering to its new voters in the old Labour heartlands. A few critics may well even accuse it of joining the ‘uniparty’. Perhaps so. And yet, with its dominant lead in the polls, Reform also had to get rid of a set of policies that often gave the impression they had been scribbled on the back of a fag packet close to closing time. The crucial question will be whether it can come up with a credible plan for the economy instead.
Reform had to get rid of a set of policies that often gave the impression they had been scribbled on the back of a fag packet
In a major speech on the economy in the next few weeks, Farage is expected to promise not to reduce taxes before cutting spending, making deep cuts to the civil service and implementing a ban on borrowing.
‘Reform will never borrow to spend, as Labour and the Tories have done for so long; instead, we will ensure savings are made before implementing tax cuts. I will have more to say on all this in the coming weeks,’ Farage has said.
This is a big moment for Reform. In the last election, the party promised to lift the threshold for income tax to £20,000, and scrap inheritance tax on estates of less than £2 million. Apparently all that will go, with the new-look ‘Nigel from Accounts’ promising a far more sober approach to the public finances. But don’t be fooled: this doesn’t mean that Reform is abandoning the economic radicalism that the UK desperately needs if it is to break out of its doom loop of stagnant growth and rising taxes. As it prepares to form a possible government, Reform needs to work out a credible economic strategy. Raising tax thresholds and scrapping IHT are, as it happens, both good ideas, but it is hard to see them surviving a general election campaign, especially as it may well be fought against the backdrop of a fiscal crisis.
The party’s opponents will rip into its plans, accusing it of destabilising the economy. Indeed, the Tories are already doing just that: Kemi Badenoch’s party has spent the last week or so laying into Farage’s economic policies. And, as for the bond markets, they don’t care much about stagnation, but they do care a lot about the debt interest getting paid on time. If Reform doesn’t tread carefully on its journey to power, the markets will start to sell off gilts – a situation that could cause trouble for a future Reform government if things spiral out of control.
A platform that might work for a small insurgent party is not going to work for one that may well be about to assume power. So, Farage’s pledge to offer a grown-up economic plan is a smart move. But the real challenge for Reform will be coming up with a plan that will survive an election, and, perhaps more importantly, allow it to govern effectively if it takes power. It has plenty of good ideas. Ditching the Net Zero targets will save a lot of money. Redeveloping the North Sea, and allowing fracking will generate lots of wealth and tax revenue (the Gainsborough trough in Norfolk alone could add 5 per cent to GDP). What’s more, the UK is so over-taxed that it may well be at the point where cuts pay for themselves, although no one will know for sure until they try. But if Reform is to defy the critics it still has to pull all that together into a coherent plan. Ditching the ‘fag packet economics’ is a good place to start.
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