The UK needs reform... but not Reform UK

by Richard Pooley

YouGov’s latest Multilevel Regressive Post-stratification (MRP) poll of the likely result should there be a general election in the UK now is bad news for both of the country’s main political parties. Labour’s vote share drops to 23%, the Conservative one to 18%, the first time in over a century that the two parties have less than half. Under our democratically-challenged voting system, Labour would win 176 seats but the Conservatives would have just 46, not far ahead of the Scottish Nationalists with 34 seats from a 3% vote share, and behind the Liberal Democrats with 81 seats from a 15% share. The party with the largest share (26%) and most seats (271 – 55 short of a majority) would be Reform UK, the latest political vehicle for Nigel Farage, the most consequential British politician since Margaret Thatcher.

The most interesting statistics to come out of this poll of 11,500 people are that Brits in households with an income of over £70,000 are more likely to vote for Labour than any other party, while those earning £20,000 or less are most likely to vote Reform. The average UK salary for full-time employees is £37,430. So, are the poor no longer voting Labour and the middle class no longer voting Conservative? If so, Reform UK really has not so much reshaped the political landscape as blown it up.

What is Reform offering the British which is proving so attractive to so many?

Its most well-known and popular policies are to do with immigration – no “non-essential” immigrants and immediate deportation of foreign criminals. But the latter has been tried for years by British governments without much success. If foreign countries won’t accept ‘their’ criminals, how will Farage send them back? He doesn’t say. Just as his party does not explain how it will “return” failed asylum seekers and those who arrive on “the small boats” from France. Farage’s anti-European Union rants when a Member of the European Parliament and his prime role in getting 52% of Brits to vote to leave the EU has made him a pariah among most governments in the EU. And he cannot expect any help on reducing immigration to the UK from his right-wing nationalist friends in Europe. They have or will come to power precisely  because they also are saying they can reduce immigration. I can’t see Marine Le Pen or Jordan Bardella of France’s National Rally allowing les flics to continue to patrol the beaches of north-west France to try and stop migrants heading for the UK.

How do Reform define “non-essential”? Foreign nurses and doctors are essential, as indeed they are if the National Health Service is to keep going. Those in hospitality are not. Nor are farm-workers, carpenters, bricklayers, plumbers, electricians and plumbers. Nor care-workers.  So, the jobs that Brits won’t or can’t do won’t be done by migrants. And fruit and vegetables won’t be harvested, houses won’t be built, old people won’t be looked after. Reform thinks it will fill these jobs by forcing employers to take on Brits: they would have to pay much higher National Insurance (20%) on foreign workers than on British ones. But if a Brit is not able or willing to do the job, I, as an employer (as I once was), will hire a foreigner (if Reform will allow me to) and pass on the cost to my customers…or invest in machinery or Artificial Intelligence…or go bust.

Surely, you may think, a right-wing outfit like Reform will get Brits back to work by taking an axe, or at least a scalpel, to the UK’s welfare bill. The cost of disability and incapacity benefits has shot up by 45% in real terms since the Covid pandemic. That’s a million more claimants. Compare that to Germany where the number of such claimants has fallen. Jeremy Hunt, the Conservative government’s finance minister from 2022 to 2024, thinks that if his successor “cut the value of overall working-age benefit claims to 2019 levels, she would save £49 billion a year in real terms…” He admits in the same article that he is “indirectly responsible” for the ballooning welfare costs.

In 2014, when he was in charge of the Department of Health, Hunt shepherded the Care Act through Parliament. One of this act’s main aims was to stop the National Health Service treating mental health as less important than physical health. The law of unintended consequences has resulted in mental-illness claims accounting for more than 50% of the post-pandemic increase in disability benefits. Hunt goes on to suggest ways to overcome this and save a lot of money.

Yet Reform are unlikely on present evidence to do anything about welfare costs. When the Labour government cut winter-fuel payments to all but the poor, Farage said he would restore them; and said he would restore them in full when Labour U-turned and restored them in part. Likewise, when the government tried to save £4.5 billion by making eligibility for disability benefits much tougher, Farage made it clear that he supported the Labour backbenchers who all but scuppered the plan. Who would have been most hit had the government succeeded? Those households earning less than £20,000 a year.

What else is Mr Farage and his motley crew of six (or is it now five?) MPs proposing to do should they come to power? One of the most eye-catching and eye-watering is their manifesto pledge, since confirmed by the man himself, to raise the personal allowance for income tax from £12, 570 to £20,000. So, anybody earning less than £20,000 will pay no income tax at all. No doubt who will love that and vote for it. The cost in lost revenue would be at least £70 billion. Add in Farage’s wish to abolish inheritance tax, and cut fuel duty (gotta help the petrolheads), stamp duty (gotta make it easier for rich people to buy and sell their houses) and VAT (gotta boost consumption…actually that’s a good idea), and clear-headed economists reckon you can add another £70 billion of lost revenue. But that’s not all. Farage wants to cut corporation tax by 10% (another £36 billion lost).

Despite all this disappearing tax revenue, Reform say they will increase spending in some areas: some £40 billion more for health, defence and the police. And they will make our views better: electricity cables will be buried underground instead of hanging from those ugly pylons.

When it comes to how all this will be paid for Reform are much less clear. Money will be saved by abandoning our Climate Change Net Zero targets and by making 5% savings in central and local government bureaucracy. All will be well because, somehow, Reform’s policies will add 1% to growth (that’s almost double what it is now).

Do Reform’s supporters worry that the party’s tax and spend policies literally don’t add up? Do they care that its immigration policy contains nothing significantly different from those of the current and previous governments and, if implemented successfully, would do huge damage to the economy? No. And Farage knows that.

Look at his latest wheeze. He is rightly worried that so many wealthy people who earn most of their money outside the UK are leaving the country. These are the ‘non-doms’ who under the previous Conservative government were told that from April this year, if they stayed in the UK, they would have to start paying UK income tax on money they earned overseas from April 2029. Labour decided to be even tougher and have added inheritance tax. In 2024 about ten thousand millionaires left  the UK, many of them non-doms with a lot more than a mere million quid. This was a 157% increase on 2023. The signs are that even more will have left by the end of 2025. Farage’s solution? A one-off entry fee of £250,000 for those who have gone abroad but wish to return. For this they will get a ‘Britannia Card’ which exempts their non-UK income and assets from UK taxation for ten years. The £1.5-2.5 billion a year raised would be given to the lowest 10% of British earners (2.5 million people). Splendid…except that the existing non-dom policy is expected to raise some £36 billion in tax over 5 years. So, that’s another £26 billion net of lost revenue, Nigel. It’s been called by the media his “Robin Hood” policy and, of course, the poor who will benefit love it.

The UK’s institutions and systems badly need reforming if the country is to grow and prosper. The tax system needs a complete overhaul to make it less complicated and less easy to be gamed by the tax lawyers and accountants of the rich. Power and resources have to be transferred from central government to local government. We should emulate the French and others and have a health service partly funded by private insurance. Yet Reform UK is not offering any such reforms. It belies its name.

One reform which is also necessary and which Nigel Farage has long championed is to our voting system – making it a proportional one. He seems to have gone quiet about that of late. I wonder why.