Reform's manifesto promises tax cuts so big even Liz Truss might think them gung-ho

ITV News Business Editor Joel Hills breaks down the Reform manifesto and it's massive tax cuts

A combination of high debt interest costs and low economic growth means whoever forms the next government is likely to find money is very tight.

But Reform’s manifesto is definitely not shy. It proposes tax cuts and spending increases worth £141 billion a year.

There’s more money for defence (with a pledge to raise spending to 3% of national income) and a lot more money for health, along with a commitment to eliminate the NHS waiting list altogether - something that has never happened ever since the NHS was formed.

The tax cuts are eye-catching. Reform says it would take 7 million people out of paying income tax by raising the threshold to £20,000 a year.

It would scrap VAT on energy bills, cut fuel duty, abolish Inheritance Tax and reduce Corporation Tax for businesses.

The scale of the cuts is huge. Almost £90 billion a year, according to Reform.

The plans make the Tories’ election offering look timid.

By contrast, Labour and the Lib Dems plan to increase taxes, although Labour has ruled out increasing tax in any of the big three (income tax, National Insurance and VAT).

Too big to be credible? Well, even Liz Truss might think Reform’s tax cuts are a little gung-ho.

She served up £45 billion of cuts in her Mini Budget - it was enough to spook the markets and bring down her government.

Truss’s problem was she didn’t really explain how her tax cuts would be paid for.

Reform does. It says it would save £150 billion by cutting spending elsewhere - to public services and working-age benefits in particular.

Reform says the savings will be closer to £160 billion because their policies would raise economic output by 1%, generating higher tax receipts.

The problem is the Institute for Fiscal Studies (IFS) - which specialises in UK taxation and public policy and is widely seen as both expert and politically independent - says Reform’s plans “do not add up”.

The IFS says cutting £50 billion from government departments would almost certainly damage the quality and the quantity of public services.

And that blocking the Bank of England from paying interest to commercial banks would raise less than half of the £35 billion Reform is banking on.

“The tax cuts would cost more than they expect. The spending reductions wouldn't save as much as they expect to the tune of tens of billions of pounds a year,” says Carl Emerson, deputy director at the IFS.

“In addition, their aspiration to eliminate waiting lists would be more expensive, even if it can be achieved. Overall, the package as a whole does not add up.”

The IFS’s analysis puts Reform’s manifesto back in Truss territory, which is not a place any politician would like to be.

The front page of Reform’s manifesto shows Nigel Farage in Downing Street.

If he were to lead the next government - which he says he won’t - the IFS believes he would find it impossible to deliver on all of the promises Reform has made.

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