Reform and the Conservatives have alighted on a shared critique of Rachel Reeves: she is taxing too much because she is spending too much. At simultaneous press conferences yesterday, both parties promised to slay what they regard as a bloated Leviathan.
Sounding rather like Bill Clinton’s former strategist James Carville (“I would like to come back as the bond market”), Nigel Farage observed that “the bond markets are enormously powerful as Liz Truss’s government found to their cost”. Supporters of the former Tory prime minister believe that one of her many errors was not to match tax cuts with corresponding spending cuts – precisely the mistake that Farage now insists he will not make.
Zia Yusuf, the businessman vying with Richard Tice to become Reform’s shadow chancellor, announced that the party would end Universal Credit payments to EU nationals, increase the NHS surcharge paid by immigrants from £1,035 to £2,718, restrict Personal Independence Payments to those with “serious, life-impacting disabilities”, cut the foreign aid budget from £11bn to just £1bn (or 0.01 per cent of GDP) and deport foreign national offenders.
You’ll notice something here. In fact, Yusuf spelt it out: “In most of the proposals that we’re announcing, the vast majority of them, it is foreign nationals who are being asked to deal with the difficult decisions and not British citizens”. Spending cuts, in other words, are always for other people.
Here is the fiscal Nimbyism that has so often gripped the British right over the past decade. Just as local residents oppose housebuilding that draws too near to them, so Reform insists that cuts will not touch its own base. For now, measures such as ending the state pension triple lock, means-testing universal pensioner benefits, scaling back childcare subsidies and free school meals and introducing a £20 fee for GP appointments (as proposed by Policy Exchange) are deemed too dangerous to touch. There is a disparity between the radicalism of Reform’s rhetoric and the electoral caution of its proposals.
Both Farage and Kemi Badenoch like to celebrate Javier Milei, the Argentine libertarian (and recipient of a $20bn US bailout). The Reform leader hailed Milei for delivering “Thatcherism on steroids” and for “cutting and slashing public expenditure”; his Tory counterpart has described him as her “template” for government.
Yet both decline to mention where the Argentine’s chainsaw has fallen. Of the cuts imposed by Milei, the largest share – 35 per cent – has been to pensions. In Britain, the triple lock has already cost around three times more than initially expected (£15.5bn by 2029-30). Will either Farage or Badenoch have the courage to act as Milei would?
Intriguingly, there are signs that the Tory leader is prepared to follow her rhetoric to its logical conclusion. “We may have to do something really revolutionary, that’s what we’re working on,” she declared yesterday, hinting that she might be open to reforming the triple lock.
Whether Badenoch and Farage are ever prepared to break such taboos will be the real test of whether they owe more to Milei than they do to Truss.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[Further reading: Meet the bond market vigilantes]
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