Tax cut costings are out by 'tens of billions of pounds per year'

Pledges made in Reform UK’s election ‘contract’ today have been ripped to shreds, whether that’s over the unspecified welfare savings, vastly inflated figures or Liz Truss style tax cuts. 

Nigel Farage announced the party’s general election vision for Britain, which includes tax cuts costing nearly £90bn per year and spending increases of £50bn per year. 

Among the Reform promises are; a vow to leave the European Convention on Human Rights, scrapping the UK’s environmental goals, freezing ‘non-essential’ immigration, cut back ‘office waste’ in the NHS to spend more on frontline services and promising to detain and deport ‘illegal’ immigrants. 

To pay for this Reform said it could save £150bn a year through; cutting bureaucracy, cutting the foreign aid budget by 50%, stopping the Bank of England paying interest to commercial banks on quantitative easing reserves and collecting billions in unpaid taxes. 

However economic experts from the Institute for Fiscal Studies (IFS) have said the sums just don’t add up and the tax cut costings are in fact out by ‘tens of billions of pounds per year’.

Responding to the pledges, Carl Emmerson, deputy director at the Institute for Fiscal Studies (IFS) said: “Regardless of the pros and cons of shrinking the state, or of any of their specific measures, the package as a whole is problematic. 

“Spending reductions would save less than stated, and the tax cuts would cost more than stated, by a margin of tens of billions of pounds per year. Meanwhile the spending increases would cost more than stated if they are to achieve their objectives.”

He goes on: “Even with the extremely optimistic assumptions about how much economic growth would increase, the sums in this manifesto do not add up. 

“Whilst Reform’s manifesto gives a clear sense of priority, a government could only implement parts of this package, or would need to find other ways to help pay for it, which would mean losers not specified.”

James Murray, editor-in-chief of BusinessGreen highlighted further flaws in the calculations. 

Murray said on X: “The Reform manifesto is basically ‘the Liz Truss tax cuts that crashed the economy, but bigger and with an even less feasible plan for funding them’.”

He added you could “go mad” trying to work out the party’s maths for example when claiming it could save £30bn a year of public spending by scrapping all net zero policies.

Hannah Davenport is news reporter at Left Foot Forward

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