Nigel Farage is making big promises – lower taxes, higher benefits, and sweeping cuts. But behind the soundbites lies a financial black hole.
Let’s take a closer look.
Last week, the country got to watch a livestream of Farage, leader of a party with only five MPs, telling us about his plans for the future.
He told us he wanted to reinstate the winter fuel allowance to all (~£1.5 Billion per year), remove the two-child benefit cap (~£3 Billion per year), raise the personal allowance to £20,000 (£50-80 Billion per year) and expand tax breaks for married couples (£2-4 Billion).
Those policies all sound great on paper – as populist policies often do – but the issue comes with how he plans to pay for policies that amount to £80+ billion per year.
Farage said:
‘If we win the next election, we will scrap net zero, something that is costing the exchequer an extraordinary £40bn plus every year.
‘There will be no more asylum hotels or houses of multiple occupancy. People who come here illegally across the channel or on the back of lorries will not be allowed to stay.
‘We will scrap the DEI agenda, which is costing the taxpayer up to £7bn a year throughout the public sector.’
And yes, I know that political manifestos often don’t entirely add up, and usually include the elusive “savings from cutting down on tax fraud” or “efficiency savings”, but what I want to highlight today is not only that Reform’s plans aren’t even remotely financially literate, but what his ‘savings’ would mean in practice.
Scrapping Net Zero Policies
Reform appears to be going hard on the idea that net-zero policies are hugely costly, and if only we just gave up on them and re-embraced fossil fuels, we’d all save lots of money. There is so much wrong with that idea that I need to unpack.
A 2022 London School of Economics report highlighted that the costs of climate change to the UK economy under the policies at the time were projected to increase from 1.1% of GDP to 7.4% by 2100.
But they also calculated that strong global efforts to reduce global warming could bring that down to only 2.4 per cent of GDP.
I won’t go into all the details, but you can read the report here. Extreme weather events, increased heatwaves, increased droughts, increased flooding and rising sea levels will have negative impacts on farming, fishing, coastal communities, communities near rivers, health and productivity, not to mention the impacts from global events such as Island nations becoming uninhabitable, widespread droughts etc.
Last year, insurance companies paid out a record £585 million for climate-related events in the UK, breaking the previous record in 2022.
The damage being caused by climate-change-related events costs money.
The LSE report highlighted that while the cost of net-zero could be 2 per cent of GDP, the benefits of enacting those policies will have a net benefit of 4 per cent of GDP.
Of course, you can ‘save’ money in the short term by scrapping preventative measures – but it will always be more costly in the long run if you ignore the problem. For instance, it’s cheaper not to build flood defences, but the inevitable flooding will be far more expensive.
Farage claimed that Net Zero policies are costing £45bn per year, based on a 2021 Institute for Government report.
However, what he failed to read in that report is that the vast majority of that funding comes from private investment – cancelling net-zero projects being paid for by private companies won’t save the UK treasury money! And of the costs paid for by the government, many of them are capital investments with long-term returns.
He also failed to factor in the tens of billions of SAVINGS that will come from transitioning to green energy.
Wind and solar are far cheaper than gas, even when taking into account all the lifetime costs of making the solar panels and turbines and removing them afterwards.
The reason our energy bills are so high is because of the way the UK sets its prices. Our prices are driven by the global wholesale gas prices. Hannah Richie explains it here – I’m not even going to try!
Needless to say, our energy bills aren’t sky high because of the cost of renewables, nor because of green levies, but because of the global costs of fossil fuels.
Scrapping net-zero policies and renewable energy sources will do nothing to reduce our bills, but it would cost the million jobs the CBI calculates are in the UK’s net-zero economy.
Refusing asylum seekers
Putting aside the morality of turning our backs on our legal obligations to help some of the world’s most desperate and vulnerable people, of which we only take between 0.5 per cent and 1 per cent of the world’s forcibly displaced population despite being the sixth largest economy, would Reform’s plans work practically or financially?
In short, no!
Simply stopping paying for hotels to house asylum seekers doesn’t mean those already here will magically vanish. They will still need to be housed and processed.
There is also no magical way to stop asylum seekers from arriving here. If there were, you can guarantee the previous government would have done so!
People come to the UK to claim asylum for all sorts of reasons – mostly cultural, family and language ties. Those reasons won’t go away just because Farage wants them to.
He claims that he’d stop them coming by having an “Australian” Offshore processing centre. However, The Guardian reported in 2021 that Australia’s offshore processing centre was costing an average of $3.4m PER PERSON being held there, compared to its onshore detention centre, which costs an average of $840,000 per person.
In 2023/24, the costs of the UK asylum system were £41,000 per asylum seeker.
Sending asylum seekers elsewhere is a hugely costly endeavour as you still have to pay for their housing, food, processing, etc, but you are now also paying a fee to the private companies providing all those services, as well as to the government of the country hosting them.
The Rwanda scheme cost the UK Taxpayer £700m and never took a single asylum seeker. Reports suggest the Conservative government were planning on spending £10bnn on the scheme. And it was only ever going to take a few hundred of our tens of thousands applicants.
There is no way to ‘stop’ asylum seekers coming to the UK, and sending them to an offshore processing centre is likely to be far more expensive than simply processing them in the UK.
Diversity, Equity and Inclusion (DEI) Programs
Now, seemingly taking a leaf out of Trump’s playbook, Farage claims that £7bn could be saved by getting rid of DEI roles and training. (In the UK we call it EDI – equality, diversity and inclusion – but the principle is the same.)
Do we spend a lot of money on these roles within the public sector?
The NHS, with its ~£190bn budget, spends ~£140m per year on EDI. That covers 800 diversity and inclusion officers, from a total NHS staff of 1.5 million.
So ~0.07 per cent of their budget and 0.05 per cent of their staff.
Given the NHS accounts for about 40 per cent of all the day-to-day government spending on public services, that would imply, very roughly, that £350m might be ‘saved’ if you sacked every EDI officer across the public sector. (This is back of a fag packet calculation but you get the point – it’s 20 times smaller than the figure Farage quoted)
So, are these roles expendable and unnecessary?
No, not at all.
These are the people who ensure that a workplace is safe from racism, misogyny, homophobia, etc.
These are the people working to try and ensure that those with a disability can access facilities, and that hiring practices don’t discriminate against them.
These are the people making sure that healthcare is accessible for marginalised people in society and communities who may not feel safe going to a doctor.
Every organisation, whether public sector or not, benefits from having a diverse staff, with different experiences, and money is always saved in the long run by ensuring services are accessible to everyone.
That’s what EDI means. It’s ensuring that everyone, including women, LGBTQ+, ethnic minorities, those with disabilities and those from poor and marginalised communities are both represented in our public services and served by them.
Because historically that hasn’t been the case, and it sadly doesn’t happen on its own.
Getting rid of every EDI officer and training program across the public sector would save a fraction of what Farage claims and would inevitably lead to worse services for the majority of people.
Fantasy Economics
Scrapping all net-zero policies, cutting EDI, and ‘banning’ asylum seekers would, in all likelihood, cost more money than any savings he claims he would make.
Even if we generously ignored the costs of enacting these cuts, they would likely only ‘save’ a few billion pounds.
Nowhere near the £80+ billion he’d need to fund his spending pledges.
But this isn’t just about his numbers not adding up – this is about the vision he has for our country.
It’s a backwards-looking, fossil-fuel-driven version where minorities are excluded and we turn our backs on the vulnerable.
Promising the world with no plans on how to deliver is what Farage does. He did it with Brexit, and this manifesto is no different.
This is classic populist budgeting: big promises paid for with fantasy cuts.
If Farage is being given the platform to live stream his plans for the country, I sincerely hope the media start taking him seriously and begin scrutinising him and his party the way they do the other parties. We shall see!
When you have conversations with people who like the sound of these populist promises, hopefully, you’re now better armed to be able to gently push back on what these policies would mean for the country – for the environment, our equality, and for the vulnerable.
This article first appeared on Emma’s substack . You can subscribe HERE.
