When Nigel Farage unveiled Reform UK’s latest economic policies last week much of the package had a familiar ring. Pledges to fund income tax cuts by dumping net zero targets and diversity policies had already featured in the party’s last general election manifesto.
What was new, and markedly different, was the announcement that Reform wants to scrap the two-child benefit cap and reinstate winter fuel payments for all pensioners.
These proposals are more complex than simply an attempt to outflank Labour on the left on benefits. Instead, the purpose is to signal that Reform is both pro-working class and in favour of increasing the birth rate.
Farage himself stressed that his party wants to lift the two-child benefits cap not to “support a benefits culture” but because the policy is part of wider strategy to make life more affordable for working families.
The promise draws inspiration from the overtly pro-natalist position of Farage’s friend and ally US President Donald Trump, who has mooted the idea of $5,000 bonus per child and has promised to be the “fertilisation president”. Alongside Reform’s other proposals to increase the basic income tax threshold from £12,500 to £20,000, increasing the married couple’s transferable allowance up to £5,000, and exempt one partner in a marriage from paying tax on the first £25,000 of their income, Reform is signalling that young, working families are at the heart of their populist agenda.
Restoring winter fuel payments to all pensioners looks calculated to attract older voters, smart politics when polls suggest those aged 60 and above are 20% more likely to vote than those under 40.
To understand whether this newly announced agenda is credible or not, we must first define what credibility is. The Institute for Fiscal Studies highlighted a lack of detail around what spending cuts Reform UK propose to fund these pledges; the IFS estimated the cost of the polices at £50-80billion a year. Yet, polling indicates that political credibility with sections of the electorate is on the rise for Reform.
At the heart of the announcement was not a detailed declaration of economic policy aimed at wooing big business. Rather, this was an effort to build support among economically left-leaning voters open to the message that the major parties have failed them, and Reform is the party to put families first. In presentational terms, the new policies are simple: lower taxes will put more money in your pocket and make getting married and having children a more achievable aspiration.
Labour and the Conservatives can ignore Reform’s offer at their peril. A YouGov survey in January found that 87% of UK adults believe it is harder for a young person to get on the property ladder. Another poll in March found that 45% of childless 18–45-year-olds want children while those who don’t cited the cost of living (28%) and the state of the world (16%) as the primary reasons.
These announcements form part of Reform’s strategy to redefine the role of government in the economy. A Reform-led government might present challenges and opportunities for business. The financial and tech industries could expect favourable tax arrangements while oil and gas companies would be granted new North Sea drilling licenses.
Critics say Reform’s plan to deliver numerous unfunded spending pledges risks triggering another economic crisis like the one that followed the mini budget of October 2022 under Liz Truss’s short-lived premiership.
Only time will tell whether Reform’s welfare pledges make it into the party’s manifesto at the next general election. Yet it is clear that Farage’s party has identified a tranche of younger, disaffected voters it thinks can be won over with a swathe of family-friendly policies.
