Nigel Farage’s economic plans make Liz Truss look prudent

One of the very few advantages of Reform’s surge in the local elections is that the party has to move from just being a protest party to one with polices, and now those polices can be costed and analysed. Nigel Farage has been quite honest in the past about what economic policies he would introduce, but no one bothered looking at them because he was never going to be PM.

He has now committed them, or at least some of them, to print in the Daily Mail and what a mess they are. Even Liz Truss would never be this stupid.

Still, Farage was not being totally honest as he laid out his plans. He seems to have forgotten he is in favour of an insurance-based health service and now just says that a Reform government would run the NHS better with no new money, to which the only sensible response is, “the best of British luck to you”. The NHS has been chronically underfunded for years now and needs a lot more cash. Thinking otherwise is a fool’s paradise.

But it’s the Farage economics that is really frightening. He thinks Britain can afford:

To raise the threshold for paying income tax from circa £13,000 a year to £20,000;

To abolish Inheritance tax for all estates below £2 million;

To reintroduce the winter fuel allowance.

To reverse the inheritance tax on farms;

To pay the farmers even more subsidies and increase their income by “making supermarkets pay farmers a fair price”. I am not sure how you make supermarkets do that, but it will mean higher food prices for everyone in any case.

Let’s have a look at the costs of these policies. Increasing the level at which you start paying income tax to £20,000 would cost £41 billion a year. It would make the poorest 20% of households £380 a year better off, while the richest 20% would be £2,400 better off. So much for helping the poor workers.

But then, Reform also wants to increase the higher tax bands by £20k too. The cost of that is another £18 billion, with 80% of the benefit going to the well-paid who would gain another £2,700 per year. The poor don’t pay a higher rate of tax and will be lucky if they are £17 a year better off.

That is a grand total giveaway of £59 billion a year, most of which goes to the wealthy. Economic madness. Changing NI contributions to the same level would cost many billions more.

Raising the inheritance tax (IHT) threshold to £2 million would virtually abolish a tax which brings in £8.3 billion a year. A tax that the vast majority of people never pay because the current allowances are so generous.

Abolishing the lower IHT rate on farms will cost another £500 million, so let’s call the cost a round £9 billion per year. Farm subsidies already cost £2.5 billion a year, but we have no idea how much Reform would increase them by.

Reintroducing the winter fuel allowance, most of which goes to wealthier pensioners who don’t need it, will cost another £1.3 billion.

My calculations are that Nigel Farage is committing his party to £76.3 billion a year in lower tax receipts – and that does not include his previous commitments like halving corporation tax, another £36 billion or “simplifying company taxation” or increasing defence and police spending.

All in all, Farage is promising Reform will deliver over £110 billion a year in tax cuts and probably much more. How will it be paid? Not by cancelling “woke” schemes or putting asylum seekers in tents.

Farage’s plan is for yet more austerity. His last manifesto had even more tax cuts and even more dodgy “savings” to pay for them.

The Economist calculates there would be a £100 billion a year gap in the government’s finances under Reform. Which could only be paid for by borrowing, already stretched to the limit.

Liz Truss managed to crash the markets, hike interest rates, almost destroy the pensions industry, and end her political career with a £45 billion black hole. Farage is planning to go one better and more than double that.

It means that if his party ever looks like winning a general election, the markets will fall off a cliff, government borrowing costs will soar, and the British economy will implode.

Vote for Nigel and you will look back fondly on the financial rectitude of Liz Truss.