Nigel Farage has delivered a speech on his economic priorities. While it did not announce any new policies as such, it marked the most detailed explanation yet of what a Reform UK government might prioritise. Below are six areas he discussed.
Tax cuts – or the lack of them
As recently as the buildup to May’s local elections, Reform was pledging to raise the threshold at which people start paying income tax from £12,570 to £20,000, bringing many thousands out of tax but costing the exchequer more than £40bn a year.
Amid increasing scrutiny about how or if this could be paid for, Farage has rolled back. Quizzed after the speech on whether the policy still stood, he said he would “want” a £20,000 threshold but this was an eventual aspiration.
It was, he said, impossible to know what state the economy would be in by the time of the next election, meaning most firm promises would need to wait for now. There was one exception – Farage said he would reverse Labour’s changes to inheritance tax on farms.
Whatever Labour achieves over the rest of the parliament there will be a difficult inheritance. But raising the tax threshold is difficult to justify when it mainly benefits richer taxpayers who can earn more before they hit the 40p tax rate.
Two-child benefit cap, wages and pensions
At a press conference last week, Reform said it could save £9bn a year by tightening eligibility for personal independence payments, or Pip. Asked about another benefit-related policy – the party’s pledge to scrap the two-child limit on payments of some benefits such as universal credit – Farage said this would happen for UK nationals only where both parents worked, which notably limits its generosity.
As part of his wider reluctance to spell out specific policies, Farage declined to commit to the so-called triple lock on guaranteeing significant annual increases to pensions – but was willing to say that the minimum wage was possibly “too high for younger workers”.
Most economists recommend tackling mental health issues before the withdrawal of benefits. They would also be concerned at the discriminatory effect of raising the two-child cap only for UK nationals., but would welcome equivocation over the triple lock. The Institute for Fiscal Studies has proposed reverting to the earnings link with a safety net, saving the government billions of pounds over the next 30 years.
Rich people and entrepreneurs
While polling regularly shows that the cost of living is one of the biggest priorities for voters, Farage paid little attention to this, beyond passing references to fuel bills and the supposed impact of migration.
There was, however, a lot of talk about an alleged exodus of wealthy people and young entrepreneurs amid a punitive tax regime, a narrative not backed up by much evidence. Such types, whom Farage called a different economic “breed” to ordinary mortals, should be cherished at all costs, he said.
Even more leftwing Labour MPs would accept the role of entrepreneurs and other wealth-creators in generating growth. But repeated talk about the vital role of the rich – even if Farage also took pains to talk up the role of all small businesses – might feel some distance from his talk a few months ago about Reform being the party of workers and unions.
Pensions
While public sector workers might not always be Reform’s primary target group for support, if they are to win the election they need to spread the net wide. As such, the party’s hints at possibly scrapping defined benefits pensions for public sector workers might not go down so well, even if (like the triple lock) it is a conversation most parties will be having in private.
Asked about this, Farage was somewhat coy, saying only that the party was committed to reducing the fees paid by councils to administer pension schemes, something its deputy leader, Richard Tice, has talked about before.
Labour has put in train plans to consolidate council retirement schemes and reduce the fees, and in so doing, might have stymied Farage’s plan by 2029.
Energy and net zero
Keeping with the theme of “Reform-favourite policies which don’t necessarily poll hugely well with voters more widely”, Farage used a long section of his speech to condemn what he called the “lunatic” push for net zero, promising instead to prioritise new drilling for fossil fuels in the North Sea.
While the idea of lower energy costs, as promised by Farage, would be popular, there is very limited evidence that a new drilling push in the North Sea would achieve this. And for all that some rightwing papers and commentators talk as if the government’s net zero targets are hated, polling generally suggests otherwise.
That said, Ed Miliband may need to slow the pace of solar and wind projects, neutering this line of attack. The energy secretary is under pressure to alleviate the burden on business from high energy costs made wore by net zero subsidies.
Diversity and inclusion
On economics, as with other policies, Farage is generally careful to keep some distance from Donald Trump, who is a distinctly niche proposition for UK voters. But in one area he is fully onboard with the UK president – diversity policies.
A fairly large section of Farage’s speech lambasted what he called the massive over-regulation of the UK economy, including a swipe at what he called the “one booming sector” of HR and compliance.
Farage looked back to his era as a City metals trader and the lack of diversity programmes then: “When I worked here, it didn’t matter what religion you were, didn’t matter where you came from, didn’t matter what class you were, didn’t matter what colour you were … It was based on, are you good enough?” It is possible that some women, not to mention people of colour, who worked in the City at the same time might disagree.
