Nigel Farage’s party, Reform UK, has set out a ‘radical’ unfunded wish list of policies to challenge Labour during the next parliament, acknowledging that it will not have many MPs
At the heart of Reform UK’s contract – their equivalent to a manifesto – is a tax plan to raise the income tax starting threshold to £20,000 from the current £12,570 to save the lowest paid £1,500 per year. This would take seven million of the least well-off out of income tax ‘to make work pay and get people off benefits’. The aim is to get one million people off benefits.
The 20% and 40% base and higher rate will be unchanged, but the higher rate threshold would rise to £70,000 from the current £50,271.
All frontline NHS and social care staff would pay zero basic rate tax for three years to ‘help retain existing staff and attract many who have left to return’. There would no longer be training caps for all UK medical students, and Reform wants to write off student fees pro rata per year over 10 years of NHS service for all doctors, nurses and medical staff.
In the core contract, Reform UK said they would spend £141bn a year – at the launch in Merthyr Tydfil in Wales, Farage said the contract was ‘radical fresh thinking on economics, we want change and this isn’t working – nobody has the political arguments… Labour is going to win, this is about who the opposition will be.’
The employers’ national insurance rate will be raised to 20% for foreign workers from the current 13.8%. ‘This would incentivise businesses to employ British citizens whose national insurance rate would stay at 13.8%,’ Reform UK said. Essential foreign health and care workers would be exempt from the tax, as would businesses who employ five staff members and under. They said this would raise £4bn a year.
‘This would boost wages and could raise more than £20bn over five years to pay for apprenticeships and training for young Brits,’ stated the Reform UK contract.
‘The challenges we face are vast. Both Labour and Tory governments have broken promise after promise. They have destroyed trust in our democracy and betrayed the British people,’ said Nigel Farage, leader of Reform UK.
‘Our country is worse off, both financially and culturally. The economy is being wrecked by record high taxes, record high national debt, wasteful government spending and nanny state regulations.’
‘You have to cut out the waste from the back office,’ said Reform UK’s Richard Tice, and will save £50bn from public sector by improving productivity and reducing staff numbers.
‘The bloating of government and quangos since 2016, and in fact since 2019 has resulted in an extra 600,000 staff,’ said Farage. ‘Let’s face reality, we have to have a slimmed down public sector.’
One of the big money raisers would be ending the current system where the government has to pay interest to Bank of England to cover commercial banks on quantitative easing (QE) reserves, which is costing £35bn a year.
It would also focus on tax avoidance with a plan to collect billions in unpaid tax, which HMRC has ‘failed to collect last year due to understaffing and bad management’. Improved HMRC competence would deliver lower taxes to British workers.
Inheritance tax threshold would be increased to £2m and the 40% rate would be reduced to 20% while the threshold for stamp duty land tax on residential property sales would rise to £750,000, with a 2% rate for sales between £750,000 and £1.5m, and 4% over £1.5m.
To address the cost of living, other proposals would lower fuel duty by 20p per litre for both residential and business users, scrap VAT on energy bills and abolish environmental levies.
For smaller businesses, the pledge on corporation tax is to lift the minimum profit threshold to £100,000, reduce the main corporation tax rate from 25% to 20%, then to 15% from Year 3 of any Reform UK government.
Business rates for high street based SMEs would be abolished and would be offset with an online delivery tax at 4% for large multinationals to create a fairer playing field for high streets. They also said they would cut ‘entrepreneurs’ tax to 5%’ although it is not clear who would qualify for this.
There is even a short mention of the overly complex tax code which runs to over 21,000 pages with promises to reform the tax system through major simplification.
It also plans to ‘stop the offshore taxpayer rip off’ whereby ‘some larger care home providers are avoiding tax on hundreds of millions of profits through complex offshore property company structures and high interest shareholder loans. This has to end’.
Reform UK pledged commitment to maintaining the NHS, but also wanted to offer tax relief of 20% on all private healthcare and insurance.
On red tape and employment law, it wants to scrap thousands of laws that hold back British business and damage productivity, adding that the party wanted to ‘make it easier to hire and fire so that businesses can grow’.
To tackle benefit claimants and get up to two million back to work, all job seekers and those fit to work would have to find employment within four months or accept a job after two offers. Otherwise, benefits would be withdrawn. Those registered with severe disabilities or serious long-term illnesses would be exempt from regular checks.
As part of the £141bn package, Reform UK also wants to scrap section 24 for landlords, so the tax system encourages smaller landlords into the rental markets, by reintroducing tax breaks to deduct finance costs and mortgage interest from tax on rental income.