Reform, the party/company owned by a multimillionaire may try to sounds like they’re a party of the people for the people – the poor beleaguered working man et al. But in reality, when it comes to economic policy, they’re a party of the rich, for the rich, wanting to see the uber-rich become even richer at the expense of everyone else.
The New World’s article “The car-crash cost of Farageonomics” provides several examples of their chicanery.
Reform is planning a series of colossal giveaways. These are “financed” – if that is the right word – by a series of cuts to public spending. Their menu of economic policies includes: increasing the personal tax allowance from £12,570 to £20,000; the abolition of inheritance tax; raising the VAT limit for small businesses from £90,000 to £150,000 and slashing corporation tax.
And then there’s the Britannia card.
Reform plans to sell a “Gold Britannia card” to foreign nationals. They will pay a one-off fee and after that they will not have to pay any tax on their foreign wealth, or any inheritance tax.
How will they fund these cuts? Well, via the famous magic money-tree if you take what they say remotely seriously.
All of this would be paid for with a Trump-inspired purge of public spending, which is completely fanciful. Scrapping net zero would save £40bn, claims Reform, even though it costs nothing like that much – most of the money spent is not the government’s and the green technology we are developing will make a net profit by 2050. Reform even suggests that ending diversity policies will save £7bn – and so, delusionally, on. The figures are ridiculous, obviously invented and bear no relation to reality. Which means the enormous tax giveaways aren’t backed by any corresponding savings – and they are truly staggering in scale.
They’re clearly either incompetent or liars, or both.
As we’ve covered before, increasing the income tax threshold to £20,000 a year is an astronomically expensive policy – perhaps costing £50-80 billion of public money.
Attractive as it might sound to people on the sort of incomes that would no longer have to pay any income tax under that scheme, it’s actually far more beneficial to the folk who already have high incomes.
The biggest gainers from this would be the highest earners. The low paid would make around £600 a year from the increase in thresholds, but the wealthiest 10% of the population would make £6,000 a year.
Inheritance tax is very unpopular with many Britons, so perhaps the majority of the country would be happy to see it go. But there’s already a substantial threshold under which you don’t have to pay it – so the reality is that they only people who would benefit at all are the people lucky enough to be inheriting a pretty huge amount of stuff in the first place.. Very few Britons are in this position.
Poor people and even reasonably wealthy people don’t pay inheritance tax either. You have to die with assets of more than £325,000 if you are single, £650,000 for couples plus a housing allowance of £175,000 – so that’s £825,000 in total. Which means that 94% of all Brits are too poor to pay this tax, which brings in around £9bn a year.
Raising the VAT limit obviously only benefits people who own a business which makes substantial money, which isn’t most of us. And they also want to lower corporation tax – a tax that the largest businesses are supposed to pay. Once again, it benefits the richest companies a lot more than the poorer ones, and sucks large amounts of money out of the public purse.
Reform is also promising to lower corporation tax to 15%. The cost of that cut alone would be well over £30bn, and the largest companies would benefit the most
Then we come onto the Britannia card. Foreign nationals will be able to pay a 1-time fee of £250,000 to avoid having to pay certain types of tax they would otherwise be expected to pay ever again in the future – “it is a straightforward exercise on tax dodging”, says the New World. After all, if you weren’t going to pay more than £250,000 tax then you obviously wouldn’t buy the (optional) card.
It will therefore cost billions more than it raises and will be a massive tax cut for some of the richest people in the world.
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In fact, this policy is so expensive it would collapse under its own weight. It would offer £30bn plus of tax giveaways to the richest tax dodgers in the world over five years, or £6bn a year. Many of the winners from this scheme already live here and will get enormous tax cuts. Many more tax dodgers will come here to milk the system
The £250,000 each card brings in is supposed to be distributed to the lowest paid 10% of full-time workers. This is of course potentially a welcome redistribution compared to the rest of the pro-billionaire policies above. But it’s still not helping those most in need even on paper – the poorest citizens of the UK aren’t in full-time work.
So what the cost of these dangerous, inequality-enhancing, pro-the-rich-establishment policies likely to be? The New World estimates it at an astonishing £130 billion a year.
To put that in context, that is more than double the defence budget, more than the whole education budget or almost every single OAP’s state pension, gone for ever.
The markets didn’t like it last time a rogue Prime Minister wanted to do a massive giveaway with no plausible method of funding it. And this is so muhc worse.
Liz Truss crashed the markets with an unfunded giveaway of £160bn spread across five years. Farage’s giveaway will be £130bn a year, every year, for ever. I wonder what could possibly go wrong?
So all in all, it’s the same old story with Reform. What they claim to be doesn’t remotely resemble what they are – and at the end of the day, most of us would suffer were they to get into power and try and actually enact these mad policies.
Nigel, the friend of the poor, put-upon, hard-working, low-paid, left-behinds, is in fact proposing huge tax cuts for the wealthiest, paid for by huge cuts to the services that the poor use most.