Mel Stride: We will never do a deal with Reform

Telegraph

9 hours ago

Sir Mel Stride has vowed the Tories will never make a pact with Reform as he attacked the party's 'fantasy economics'.
The shadow chancellor said Nigel Farage's party would put the economy on 'the road to ruin' and said: 'I don't want to be a populist that runs around saying we can do this, that and everything else for you without any plan behind it. I just think that's recklessness.'
Sir Mel also attacked Rachel Reeves's 'huge borrowing splurge' to fund spending plans until the next election, but warned that Reform's pledges were even more 'dangerous'.
While some influential Tories have called for the parties to work more closely together, Sir Mel said the Conservatives would never strike a deal under his watch.
'I don't want to get involved with a party that peddles fantasy economics,' he told The Telegraph.
'Why would I want to do that? I want to be with a party that is going to be four-square behind fiscal responsibility and manage our economy in a way that doesn't imperil the livelihoods of people up and down our country.'
His comments come as the Conservatives seek to fight back against Reform, which has surged past the party in the polls to take the position of Labour's de facto main opposition.
Many observers believe the Tories are still paying the price of Liz Truss's mini-Budget of unfunded tax cuts, which triggered the market chaos that led to her downfall. The Conservatives' polling numbers collapsed in the wake of the crisis and have never recovered.
Sir Mel has chosen to disavow the policies of Ms Truss as the Conservatives seek to rebuild. He also warned that a Reform victory may lead to a sequel.
Reform's central election pledge is to raise the amount people can earn before they start paying tax to £20,000. The Institute for Fiscal Studies (IFS) has estimated this could cost up to £80bn, although Reform has insisted its plans would be fully funded by sweeping cuts to Whitehall departments and said it would not cut taxes until it had slashed spending first.
However, raising the tax threshold is just one of several costly promises made by Mr Farage's party. Reform has also pledged to cut corporation tax and abolish the two-child benefit cap that restricts payments to families with three or more children.
Sir Mel said: '[They're] promising everybody everything they want to hear, without any credible plan as to how they're going to pay for any of this. Certainly, if Reform were in No 10 now, I think the economy would be in a very dangerous position.'
While he now spends much of his time in attack mode, Sir Mel offers up little of substance when it comes to policies of his own.
He says Britain is failing the young and suggests the Government should do more to crack down on Mickey Mouse degrees that do little to increase people's job prospects. But just as he suggests universities may have a role in sharing the financial burden of dead-end degrees, he stops himself to insist the proposal is just 'blue-sky thinking in an interview'.
This caution has allowed Reform to steal the limelight with its eye-catching proposals as the Tories struggle to get their mojo back.
Sir Mel, who almost lost his Central Devon seat at the last election, admits his party 'lost connection entirely with the British electorate and we have to win that back – and that will take time'.
For now, he believes the best way to do that is by highlighting the flaws in Reform's policy platform.
'What we've got to do is be out there making the case that people need to think long and hard about whether the numbers add up, because if they don't, that is the road to ruin,' Sir Mel says.
'Right now, Reform is ahead in the polls [and] they are out there saying they will take everybody out of tax up to £20,000 at a cost of £50bn to £80bn – about a third of what we spend on the NHS every year, with its 1.3m employees. Really? How are they going to fund that?'
The Conservatives' slump in the polls had to put pressure on Kemi Badenoch but Sir Mel said she was 'absolutely' the right person to lead the party.
This is Sir Mel's 11th interview of the day and he's only halfway through his commitments. Stationed in the shadow cabinet room in Westminster, he's armed with two copies of the cornflower blue spending review book, one of which is covered in scribbled notes that include a reminder to talk about GDP figures out that morning to attack lines such as 'summer of speculation, fear of what will come'.
Sir Mel, a self-confessed history buff, suggests the Tories would be prepared to take the tough decisions to slash the size of the state if they got back into power.
The man who led a series of sweeping reforms to the benefits system insists 'we need to get a grip on welfare' as he opened the door to a conversation about the NHS.
While qualifying that the health service is an 'absolutely vital part of what we are as a civilised society', he signals there will be choices to come 'around what the health service does'.
Sir Mel says: 'What is possible at different points in time changes. For example, the idea of my grandparents going to hospital, getting both hips replaced and leaping around like a mountain goat within weeks would have been entirely fancy. We have drugs today that can do things that we didn't have the drugs to do in the past. So it will be an evolving terrain.
'But my fundamental point is that if you run a health service that is not productive, that is consuming ever larger levels of resources and is not really producing in the way that it can, then you're not serving the British people properly.'
While he is reluctant to talk specific policies, he suggests one of his priorities is to address tax traps that can leave people facing punishing tax rates for every extra hour worked, including the so-called 60pc trap where people who earn above £100,000 gradually have their personal allowance withdrawn.
'There are definitely aspects of the complications within the tax system that slow economic activity,' he says. 'The personal allowance gets withdrawn above a certain level of income and that leads to high marginal tax rates.
'The interaction with the benefit system can produce similar effects to the withdrawal of child benefit where you can actually reach marginal tax rates of 70pc or more. So there are all sorts of things that we need to think very deeply about within our tax system.'
Young people are also firmly on his mind, with Sir Mel frequently citing the fact that the average Tory voter is 63. He wants to change that.
'We have to have a big, bold, credible offer that shows younger people that they can have the opportunities that I had as a young man. The education that will lead to higher-paying jobs so they can get on the housing ladder.'
He has put forward a proposal for a 'Headstart' scheme under which a person in their first job would see their first £5,000 of National Insurance paid not to HMRC but into a personal savings pot which they could use as a down-payment for a house.
Before he can be drawn on detail, he steps back again, saying the proposal is 'just one idea we're discussing'.
'We will have the answers through time,' he insists. 'I'm not the Chancellor, I'm not in the Treasury.'
Judging by the polls, he will have to work hard to change that.