Can Nigel Farage and Reform balance the books?

Nigel Farage today sought to position Reform UK as the “party of alarm clock Britain” championing both business and workers.

In a speech in the City of London this morning, the former stockbroker said the country was being “led by human rights lawyers, not entrepreneurs”, and blamed a “political class who are not business people” of wasting the “opportunities to deregulate and become more competitive” offered by Brexit.

Promising to balance the budget, and that the party would “never borrow to spend” if it came to power, “marks the first time Reform has articulated something resembling a fiscal rule”, said the Financial Times. It also raises serious “questions over the spending cuts or tax increases needed to achieve this goal, as well as the precise definition of the pledge itself”.

What did the commentators say?

This is a “big moment” for Reform, said Matthew Lynn in The Spectator. Headline-grabbing promises made at the last election such as lifting the income tax threshold to £20,000, scrapping inheritance tax on estates of less than £2 million, and taking water companies back into public ownership, are set to be junked.

In their place the “new-look ‘Nigel from Accounts’” is promising “a far more sober approach to the public finances”. But still “don’t be fooled: this doesn’t mean that Reform is abandoning the economic radicalism that the UK desperately needs if it is to break out of its doom loop of stagnant growth and rising taxes”.

One area the party appears willing to challenge the status quo is on the pension triple lock. The policy of raising the UK state pension each year by whichever is highest out of inflation, average earnings or 2.5% has “trapped Britain’s two main parties since 2012 in a bind that, for some, has come to symbolise the paralysis of the state”, said Politico’s Dan Bloom.

While economists have long argued this has become unsustainable, successive governments of both main parties have shied away from touching it in fear of angering older voters.

Reform, by contrast, has been “remarkably open” about whether the triple lock would survive, said Bloom. While any decision appears a “long way off”, when Farage does make up his mind, “he has the power to radically alter the political landscape in the UK – and set a new bar for insurgent parties across Europe telling hard truths that the centre cannot”. But saying that, “he would also come under ferocious attack”.

Another major spending area the party appears ready to start a fight over is reforming public sector pensions to bring them more in line with those offered by companies.

When spending is “under control” and borrowing costs down, said Farage, “then, and only then, will I cut taxes to stimulate growth”.

What next?

There is a belief among Reform insiders that the economy is “only going to worsen before the next election,” said The Times, which will mean the Tories “having to abandon many of their promises to cut taxes”.

Farage may choose to keep his cards close to his chest until then, but he is “at least trying to signal a more traditional coding when it comes to the economy, entering the financial stability battleground on which elections are routinely fought”, said Politico’s London Playbook.

“On that front, the insurgent is straining to sound a little more like the opponents he’s trying to banish”.

Right on cue, Labour last night attacked Reform’s claim to be “on the side of working people, whilst also promising to slash the public services they rely on”, saying Farage’s plan would mark “a return to austerity, pure and simple”.

Meanwhile, Mel Stride, the shadow chancellor, said Farage has committed to “extra welfare spending and a huge expansion of the state”, adding it is “impossible to take Reform seriously on the economy when their promises disintegrate after five minutes”.

Herein lies both the danger and opportunity for Reform as it looks to hone its offering to voters on both the left and the right.

Officials were “understandably chuckling at the opposing attacks from each angle – but there’s a serious point here”, said London Playbook. “Each new bit of detail that Farage fleshes out will give his rivals, and the public, more to unpick him on.”