The Economist isn't exactly a neutral source but since it largely follows the genius' Truss masterplan...
Unfortunately the article is hidden behind a paywall
When Reform UK sent five members to Parliament last July, Nigel Farage, the populist party’s leader, called it a “bridgehead”. Thumping wins across England’s local elections on May 1st marked the next stage of the assault. Now, Reform is neck and neck with Labour in the polls.
Success means scrutiny. As a protest party, Reform, like earlier Farage ventures, was distinguished mainly by a penchant for scandal and an uncanny ability to nudge the Tories into unforced errors. Now, the notion that Reform could be a party of government no longer seems fanciful. Its ideas should be taken seriously.
Unfortunately, the mishmash on offer so far is highly alarming. Reform’s policies add up to an agenda of fiscal recklessness that rivals, and may well exceed, the disastrous 49-day, hair-raising, market-tanking premiership of Liz Truss in 2022.
Reform’s manifesto from the 2024 election is a starting-point. The party has since crab-walked away from the document, but it remains the only entry under “Policies” on its website. More tellingly, Mr Farage has specifically reaffirmed, or expanded on, nearly half the tax cuts listed in recent months. The manifesto puts Reform’s giveaways at £140bn ($190bn, 5% of GDP) per year, but claims to offset them with savings worth £160bn. Even on a generous-but-realistic accounting, The Economist estimates that the annual costs are in the region of £200bn and savings around £100bn (see chart). The gap between the two would amount to a colossal fiscal shock, blowing up the deficit and straining the gilt market to its limits.
Why the mismatch? Take taxes first. The changes are so vast that precise costings are futile. But Reform has made serially generous guesses. The party claims its personal-tax cuts cost £70bn a year. But the proposed lift to income-tax thresholds alone would cost at least that much, probably more, based on rules-of-thumb from HMRC, the tax agency. Adding cuts to fuel duty, stamp duty, VAT, inheritance tax and more adds tens of billions.
Recently, Mr Farage has doubled down on his single costliest pledge, to lift the personal allowance for income tax from £12,570 to £20,000. And he now wants to fully abolish inheritance tax. The manifesto promises businesses £18bn of giveaways too. But the promise to cut corporation tax by ten percentage points alone is worth double that. And the realistic take from one of Reform’s main revenue-raisers, dropping some interest payments on Bank of England reserves, is a mere fraction of the £35bn stated.
Then comes spending. Reform wants £30bn-40bn more for health, defence and fighting crime. To pay, and cover tax cuts, the party relies on hand-waving and austerity. Questionably, it asserts that its policies will add one percentage point to growth (a near-doubling) and take 1m Britons off benefits. In addition, it suggests a 5% cut across government (austerity not far off the 2010s), plus unfathomably vast savings from ending net zero.
Delivering even the viable cuts would be hard. Reform’s leaders act Thatcherite, but many of their voters are big-staters. An early test was Labour’s cuts to winter-fuel payments—an unnecessary subsidy to richer pensioners. Reform has loudly campaigned to restore them. Outside of tax-and-spend, its wider agenda of (net) zero migration and expensively burying electricity pylons is hardly more promising. The general election is still years away, but at some point sooner the infrastructure investors Labour hopes to woo will start pricing in the risk that Reform could be serious about implementing these ideas.
Britain has to keep bond vigilantes onside to fund its borrowing habit. Ms Truss’s recklessness and the Brexit saga have already strained patience. More such episodes would start to look not like aberrations, but parts of a pattern. Even the man Mr Farage calls his “friend” in Washington lost a staring match with the bond market over tariffs. Reform now has four years to choose between a serious rethink or the risk of a fiscal calamity if it wins. Maybe being no-hopers wasn’t so bad after all.
