Nigel Farage promises a lot – but do Reform's sums add up?

Telegraph

27-05-2025

Nigel Farage was in giveaway mode on Tuesday as he promised a Reform UK government would nearly double the personal income tax allowance, restore winter fuel support for pensioners and scrap the two-child benefit cap.
The policies are appealing to voters, but are they affordable? Farage admitted people would be ' lined up in droves ' to ask how, or even if, his party could bankroll such policies.
If Farage were prime minister, the promise to increase the personal income tax allowance from £12,570 to £20,000 a year would alone force him to find anything from £50bn to £80bn, the Institute for Fiscal Studies (IFS) estimates.
Benefits giveaways would add billions on top of that. Scrapping the two-child benefit cap would cost £3.4bn a year, the IFS has estimated, while restoring the winter fuel allowance would cost around £1.5bn per year. A promise of a transferable tax allowance for married couples hasn't been costed.
Farage has repeatedly attacked the Starmer Government for being 'hopelessly adrift' on public debt, which is hovering at about 95pc of GDP. He therefore wouldn't be borrowing his way towards honouring his pledges if he moved into Downing Street.
Instead, the Reform UK leader has promised 'big savings'. 'Big' is no exaggeration. At the lower end of the IFS estimated cost of the income tax change alone, he's looking for savings equivalent to the Government's annual spending on defence, or on the entire disability and child benefit system. At the £80bn top end, it's more than the Government spends on schools each year, or, to take another measure, almost half the central government payroll.
He probably isn't going to sack every second civil servant on day one. So how will he pull off the feat of balancing the books, when it has eluded governments of the Left and Right for decades?
Farage has promised full details next year. In the meantime, his downpayment is a claim that ' scrapping net zero ' would save £45bn a year – a 50pc increase on the £30bn estimate that Reform MP Richard Tice floated as recently as two weeks ago.
Ripping up public-sector diversity initiatives would yield another £7bn a year, which sounds as vague as it is optimistic.
The traditional bonfire of the quangos will reap £13bn a year. Asylum seeker hotels would also go, which Reform says will yield £4bn a year despite the fact National Audit Office figures suggest the party might claw back less than half of that.
In an interview with The Telegraph last week, Tice acknowledged that a Reform UK government taking office in 2029 would need a much clearer set of plans than this. 'These are the tax cuts I want to get to,' he said. 'But we can't implement them until I've proven that I can produce the savings.'
Those comments came after stockbroking firm Panmure Liberum said the £80bn funding gap – which it had identified even before this week's fresh promises – could trigger an 'immediate and violent' sterling crisis, reminiscent of the market meltdown after Liz Truss's mini-Budget.
Labour also invoked the spirit of Truss on Tuesday, with party chairman Ellie Reeves saying Farage's 'tens of billions of pounds of fantasy promises … are exactly how Liz Truss crashed the economy'.
Unlike the impatient Truss, though, Farage seems ready to play a longer game. And he'll need to. As IFS deputy director Helen Miller said on Tuesday, cuts of the magnitude he envisions can't be achieved by scrapping the odd superfluous quango or diversity programme, as Farage seems to suggest.
Instead, it requires a 'debate ... about the vision of the state and what role the government should play in coming years,' she said.
In other words, Farage may theoretically be able to make the sums add up on his slate of policy promises but only if the state cuts back on, or even drops, huge amounts of what it does.
This is a debate that Tice, at least, seems up for. In an article for The Telegraph last week, he was even prepared to take on the Westminster shibboleth that the NHS must remain untainted by the private sector.
A tax break would encourage wealthier people to go private, he said, and the NHS should buy 'millions more' appointments from private healthcare providers. These appointments would still be provided free to NHS patients, so they would come at a cost to taxpayers.
Tice's bet must be that the private sector would get bigger and more efficient as a result, making the service cheaper overall.
Clearly, much more detail is needed. It may be hard, in many quarters, for Farage and Tice to get a hearing for any plan to fundamentally rewire the British state – if they come up with one. But it's a debate Labour should welcome, rather than seek to smother.
Chancellor Rachel Reeves is boxed in, and constantly at risk of running out of fiscal headroom. If there is a politically palatable path to disrupting the fiscal status quo, she hasn't found it yet either.
Farage says that what he offers is a chance to think differently. 'We're not ideologically tied to the same ideas upon which we believe the Conservative and Labour governments have gone so wrong over the course of the last few years,' as he put it.
Reform UK wants to embrace a low-tax and high-benefit society, combining two positions that have traditionally been diametrically opposed in Britain.