The rise of Reform UK is the result of a profound failure by the two main parties to convince voters that they are on their side.
The utter loss of faith in mainstream politics is laid bare by the new British Social Attitudes survey, which shows that just 12 per cent of people in this country trust governments to put the country’s interests before their own.
This feeling seems strongest on the right, given that the Conservatives are struggling to break 20 per cent in the polls at the moment. Life-long Tories are questioning whether their party has a future.
“The Tories are utterly on their knees,” one influential Conservative insider tells me. But adds: “The problem is that Reform are not serious.”
Reform’s rise has so far has been built on a flimsy policy platform – its general election manifesto last year was much thinner that any other party’s – and Nigel Farage knows that now is the time to start changing that.
One of his allies says: “We absolutely know that right now, we are not worthy of a majority in the House of Commons – but we want to be. And the self-knowledge that we are not worthy is something not shared by the other parties!”
This week’s launch of what Reform claims is a new “Robin Hood” tax to transfer cash from the coffers of wealthy foreign expats into the pockets of low-income British workers is part of this push for seriousness. Unfortunately, it achieves the opposite of its aim: it shows the party’s economic policy platform is a joke.
The plan would involve a “Britannia card” which could be purchased for £250,000 by foreigners who wish to live in the UK for 10 years without having to pay tax on their global income – in effect, resurrecting the former non-dom regime – with all the proceeds going as handouts to people in full-time work on low pay.
There is a genuine issue here that Reform is trying to solve: there is clear evidence that the number of ultra-rich individuals leaving Britain has picked up in the past year.
But the party’s suggested solution is impractical for a number of reasons. It would allow multi-millionaires who have no plans to quit the UK to save big by paying a one-off £250,000 fee to shield their worldwide assets, saving them hundreds of thousands of pounds a year.
It would create a new income stream for poorer workers, but that income would vary wildly from year to year depending on how many non-doms have bought a card. And it would incentivise those same workers to avoid getting a pay rise, in case they lose eligibility for the handouts and see their overall earnings fall.
Tax expert Dan Neidle has calculated that the Exchequer would lose £34bn over five years if this policy were implemented. The Institute for Fiscal Studies is more polite, but warns it is “far from clear” that the plan would raise any money for the Treasury at all.
Similar is a proposal to scrap “gold-plated” pensions for public-sector workers, and switch to a pay-as-you-go model of pension contributions. Yes, the growing gulf with the private sector is probably unsustainable – but Reform’s solution would leave a shortfall of £200bn which needs to be paid for.
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This is a pattern. Reform wants to hike the threshold at which people start paying income tax to £20,000 from its current level of £12,570 – another staggeringly expensive idea, with most of the gains going to those who are already comfortably off. The party would not only remove net-zero obligations from businesses – which would arguably have some merit – but would actively prevent companies from investing in clean technology, with taxes on solar farms and a ban on battery storage.
This incoherence is partly a result of deep divisions within Reform about whether it is the flag-bearer of the Thatcherite free-market right, or a broader populist outfit nabbing ideas from across the political spectrum. One MP from another party comments: “They are totally split on the economy. Richard Tice is a libertarian, some of the others are basically ethno-nationalists, and Farage is a shapeshifter.”
To be fair, Reform is not alone in being economically incoherent. The Labour leadership is struggling with its own MPs to deliver on its welfare plans; the Conservatives hardly have any policies at all; and the Liberal Democrats oppose every tax rise, every spending cut and every increase in borrowing.
And Reform has time to improve. The Centre for a Better Britain, a think tank closely associated with the party, is meeting regularly with the Prosperity Institute – formerly the Legatum Institute, a right-wing think tank – to work out a more considered economic plan before the next election.
But for now, despite Farage’s success in the polls, there is no evidence he and his colleagues are ready to run the world’s sixth largest economy.
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