Reform’s sums don’t add up on income tax
They are pledging to spend up to £80 billion but their ‘savings’ don’t stack up
Reform UK’s plans to raise the income tax threshold would cost up to £80 billion, according to the respected Institute for Fiscal Studies.
In a speech today, Nigel Farage claimed that this would be paid for by:
- Scrapping net zero, which he claims is costing £40 billion per year
- Scrapping “the DEI agenda”, which he claims is costing £7 billion per year
There are two problems here. The first is that these numbers only add up to £47 billion, not £80 billion. The second is that the estimates are not based in reality.
Reform’s net zero figure is taken from the Institute for Government, but they say that it includes a large chunk of private-sector spending, which can’t be cut by governments.
Additionally, net zero is not simply a ‘cost’, since it is also a huge saving compared to the effects of letting climate change rip – for example flooding.
As the Office for Budget Responsibility (OBR) has put it: “The costs of failing to get climate change under control would be much larger than those of bringing emissions down to net zero.”
Reform already has a track record of over-estimating savings from DEI (diversity) initiatives, pledging to scrap schemes that turn out not to exist.
Where Reform’s estimate of £7 billion for DEI spending comes from is anyone’s guess. Even the right wing Taxpayers’ Alliance put the figure at £52 million over three years – over 400 times less than the Reform UK estimate.
So the sums don’t add up. And also, having just pledged their entire supposed savings from scrapping net zero on cutting income tax, be on the look out for Reform trying to ‘spend’ that same money again on other policies in future.