Nigel Farage walks back on tax cut pledges after predicting ‘economic collapse’
Nigel Farage has abandoned several major tax cut pledges as the Reform leader predicted an “economic collapse” would trigger a general election as soon as 2027.
Farage distanced himself from the party’s previous promise to introduce tax cuts worth £90bn, including by raising the tax-free personal allowance to £20,000, blaming the u-turn on ballooning government debt.
“We are being mature, we are being sensible, and we are not over-promising,” Farage said.
“For us not to take account of the dire state of our public finances, that I think would be irresponsible.
“We can’t have massive tax cuts until the markets can see we’ve at least got these things in hand.”
Farage said he was convinced that a marked decline in the health of the UK economy would cause ructions within the Labour party over spending plans, sparking a general election in 2027.
“The markets are getting nervy,” he said.
“My own view is in two budgets’ time, the markets will actually force the Chancellor into what will be a genuine austerity Budget, at which point the left in the Labour party won’t buy it.
“And that’s why I still stand by the prediction that there will be a general election caused by economic collapse that will happen in 2027.”
Farage bids to woo the City
The gloomy predictions were made as part of a speech Farage gave at Bankers Hall in the Square Mile at which the Reform leader vowed to be “the party of small business” and “the party of risk takers.”
In his pitch to the City, Farage pledged to pare back financial services regulation, including reversing onerous EU rules anti-money laundering rules, which he said had led to hundreds of thousands of Brits to be “debanked.”
The MP for Clacton said stringent banking regulations had led to banks “not being able to act as they should,” changes which spawned the booming private credit market that “will come back to bite us very, very hard.”
“Markets need sensible regulation that users can trust…they don’t need a whole lot more than that.”
Farage stopped short of calling for an end to the independence of the Bank of England over monetary policy decisions but poured scorn over the Bank’s quantitative tightening (QT) programme, which he said was “unnecessarily” handing money to the banks.
Economic battle lines
Labour said Mr Farage’s new proposals would “take us back to austerity”.
A party spokesperson said: “We’ve seen from the councils Reform run that they’ve failed to deliver the savings they already promised and are cutting services and raising taxes as a result.
“They’ve said themselves that those councils are a shop window for what a Reform government would do nationally – we know that this is more empty promises and no real plan.”
Conservative shadow chancellor Sir Mel Stride said Reform could not be taken seriously on the economy “when their promises disintegrate after five minutes, and they remain committed to extra welfare spending and a huge expansion of the state”.