Revealed: How Farage’s £80bn tax cuts would benefit the richest most

Nigel Farage’s claim that Reform UK is the “party of workers” has been called into question as figures show his plans to slash taxes would benefit the richest most.

The Reform leader on Tuesday outlined up to £80bn of welfare and tax handouts – without saying how he would fund them – in a bid to entice Labour voters, declaring that “Reform really are now the party of working people”.

But economists have warned that the billions of pounds’ worth of unfunded pledges would cause economic chaos, and say Mr Farage’s plans would benefit top earners far more than those on the lowest incomes.

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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.

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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.”

Reform UK said its plans would “undoubtedly help working people and benefit the lowest earners”.

A spokesperson said: “Our plans to scrap the two-child benefit cap will lift 350,000 children out of poverty, while raising the tax-free salary allowance to £20,000 will save every worker almost £1,500 a year, putting an extra £30 per week back in people’s pockets.

“This is in stark contrast to this government, who hiked national insurance for working people and stripped winter fuel payments from over 10 million pensioners.”

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But it came after an extraordinary speech on Thursday in which Sir Keir Starmer directly attacked Mr Farage’s tax plans, revealing the severity of the threat Sir Keir believes Labour faces from Reform.

The prime minister said: “The question you have to ask about Nigel Farage is ‘Can you trust him?’

“Can you trust him with your future? Could you trust him with your jobs? Could you trust him with your mortgages? Your pensions? Your bills?

“He gave the answer on Tuesday – a resounding ‘no’.

“He set out economic plans that contain billions upon billions of completely unfunded spending, precisely the sort of irresponsible splurge that sent your mortgage costs, your bills, and the cost of living through the roof.

“It’s Liz Truss all over again.”

Sir Keir said Labour was elected to clean up the mess left by Ms Truss, adding: “We are once again fighting the same fantasy – this time from Farage.”

Labour MPs lashed out at Mr Farage over his party’s plans. Dover and Deal MP Mike Tapp, one of Mr Farage’s most prominent critics in the Commons, said: “Nigel Farage is a rich bloke who is trying to trick the public into thinking he is a working-class hero.

“His policies speak the truth: [he’s] in it for himself and his rich mates. Reform have voted against all of Labour’s policies standing up for working people. Don’t be fooled.”

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Bury North MP James Frith added: “Farage’s plans would prioritise those at the top and be a hammer-blow for family finances through a return to the chaos of Liz Truss. Only the Labour government can be trusted to drive growth in every part of our country to give working people the security they deserve and our country the renewal it needs.”