Starmer's attack on Reform's irresponsible policies could backfire

The Guardian

2 days ago

For a politician who has done more than most to shape modern Britain, nothing seems to stick to Nigel Farage. Not the chaos of the post-Brexit referendum years; or the contradiction of his closed-border English nationalism combined with a fondness for courting nomad capitalists from Malaysia to Mar-a-Lago.
This is, of course, because the Reform UK leader is the agitator-in-chief. He has prodded successive prime ministers into action, but has not been in the driving seat himself. Things though are changing.
When Keir Starmer turned his guns on Reform last week, blasting the party's 'fantasy economics', he made clear that Farage is now Labour's most serious rival. While Kemi Badenoch has led the Conservatives into increasing irrelevance, Reform has marched on to once traditional Labour ground on the economy, while keeping a rightwing stance on immigration and culture. It is clear that Farage sees an opening to peel support away from both traditional parties at once.
It is no fantasy to suggest that Farage, riding high in opinion polls, could become prime minister. He should expect heightened scrutiny of his policies as a result, not least on economic policy, where there are serious questions marks over whether Reform's tax and spending plans add up.
However, something is lost in the argument about Farageonomics. Not only are the party's numbers hardly better than scribblings on the back of one of its leader's umpteen fag packets, but there is a more fundamental problem: his plans would not help the communities that Reform claims to champion.
Yes, scrapping the two-child limit on benefits, introduced by the Conservatives but maintained by Labour – something Farage promised he would do – would be welcome. At least 350,000 children would be lifted out of poverty overnight, at a cost of £2bn – barely a rounding error in the government's more than £1tn of annual spending.
Why Labour has not taken this step is a mystery. There is the tight position of public finances, but perhaps also a political calculation that Reform-curious voters are among the majority of people who tell opinion pollsters that benefits eligibility is too lax. As is clear from recent weeks, Britain's attitudes are not that simple to triangulate. Labour has made a grave political error in reckoning otherwise.
Farage's other policies remain straight from the right-wing, free-market libertarian playbook. They would help working-class families little, and the super-rich a lot.
Central to Reform's election manifesto was a plan to cut £60bn from income tax. It would raise the personal allowance from £12,750 at present to £20,000 a year, while lifting the 40% higher-rate threshold from £50,271 to £70,000. Unspecified welfare cuts worth £15bn also feature – a sum three times larger than the savings Labour is pushing to find from the disability and incapacity support bill, which has provoked nationwide anger.
Lifting more people out of tax altogether might sound beneficial for poorer households, and for many it would be. However, most of the gains from these vastly expensive policy changes would flow to the rich.
According to analysis by the IPPR thinktank, raising the personal allowance would come with a cost to the exchequer of at least £40bn a year, and hand the poorest 20% of households an extra £380 on average in annual household disposable income. However, the richest fifth would get a vast £2,400 extra.
Changes to the higher-rate threshold would cost the exchequer about £18bn a year, and would benefit the poorest fifth of families by just £17. The richest, again, would get a much bigger boost, of £2,700.
Taken together, the top 10% of households would get 28p for every £1 of cash forgone by the exchequer, while the bottom 10% would receive only 2p.
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Where in Britain would the winners and losers be from these vast distributive changes? For those with the biggest gains, look no further than London, home to 47 out of 50 local areas with the highest incomes before housing costs, according to the latest official figures, including Westminster, Kensington and Chelsea, Wandsworth and Camden.
Of the 50 areas with the lowest incomes, more than half are in Yorkshire and the Humber, with a further quarter in the East Midlands, places where Reform has gained the most ground in the opinion polls. Those in Farage's constituency of Clacton, where average earnings are £25,670 a year, would gain far less than in the leafy London commuter belt seat of Orpington, where the Reform leader has a £1m property and typical pay is £41,385 a year.
In defence of Farage, something resembling an opposition to Labour's vast parliamentary majority is not a bad thing. Starmer should not be surprised that the poorest communities in Britain are deserting Labour. Promising 'change', then continuing as the Tories did, with high-profile benefit cuts, will do that.
Starmer's attack on Farage's fiscally irresponsible stancemay highlight Labour's discipline but could also backfire. Voters are of course keen for the numbers to add up – nobody would relish another Liz Truss moment- but Labour's attack is reminiscent of the ill-fated Project Fear – as opponents named the campaign to stay in the EU – and risks reinforcing a sense that the party has lost its purpose in the depths of a Treasury spreadsheet.
Where the prime minister should focus is on using words and deeds to show the country's poorest communities that Labour can change things for the better, in contrast to the cod working-class values of his shape-shifting opponent.