Sunday, June 01, 2025
Farage’s £80bn tax cuts would benefit the richest most
The paper says that the Reform leader has sought to entice Labour voters to his cause by outlining up to £80bn of welfare and tax handouts without saying how he would fund them, however economists have warned that these pledges are unfunded, would cause economic chaos, and would benefit top earners far more than those on the lowest incomes:
The centrepiece of Mr Farage’s tax plans was a pledge to lift the tax-free income allowance from £12,570 to £20,000, which would cost between £50bn and £80bn per year.
Stuart Adam, a senior economist at the influential Institute for Fiscal Studies (IFS), said that the “biggest beneficiaries [would be] the top 10 per cent”. “It mainly benefits the better off,” he told The Independent.
He added: “We are talking about the upper middle [class] being the biggest beneficiaries as a percentage of income, and the best-off being the biggest beneficiaries in cash terms.”
Mr Adam said that around a third of adults already earn too little to pay income tax, while the changes would also penalise those on universal credit, as any uplift in their take-home pay would be clawed back in lower welfare payments.
He said a better way of targeting specifically “working people” with the tax cut would be to target employee national insurance, which is only paid by those in work.
Calculations for The Independent by the research institute Policy Engine reveal that Mr Farage’s plans to hike the tax-free income allowance would boost the incomes of the bottom tenth of earners by 1.3 per cent.
By contrast, the calculations show that the top 10 per cent of earners would see their incomes boosted by 4.2 per cent under Reform’s plans.
Max Mosley, senior economist at the New Economics Foundation, told The Independent that Reform’s attempts to appear progressive on issues such as winter fuel payments and the removal of the two-child benefit cap are “a distraction”.
He said: “It comes as part of a wider set of reforms, which include regressive tax changes and cuts to public services working people rely on. When we put all [of Reform UK’s] policies together, it is the wealthiest households that benefit the most, and the poorest who will see the smallest difference in their standard of living.
“Being a ‘party of workers’ does not mean giving pennies to the poorest and pounds to the richest.”
So very much like Donald Trump, then.
