Nigel Farage has cast doubt over the future of the pensions triple lock under a Reform government, saying he could not predict if it would still be viable.
In a speech rowing back on vast spending plans and tax cuts in the party’s last election manifesto, Farage said some of the substantial changes promised were no longer “sensible”.
He blamed the Conservatives for raking up the national debt and accused Rachel Reeves of presiding over a “wealth drain” by pushing wealth-creators to leave Britain.
However, Farage was forced to defend himself against suggestions he was breaking promises made by Reform in its last manifesto and in speeches and announcements up until July.
In an attempt to wipe the slate clean, Farage hinted his support for cutting the minimum wage for young people and reversing Labour’s inheritance tax changes for farmers.
Key points from Farage’s speech on the economy
Here is where some of Reform’s financial policies stand after the speech at The Cornhill Banking Hall on Monday.
Pensions triple lock
Farage broke from the cross-party consensus by refusing to back the pension triple lock.
Introduced by Lord Cameron and George Osborne, it ensures that the state pension rises by average earnings growth, inflation or 2.5 per cent — whichever is higher.
The policy has commanded support from the main political parties at each election since and is seen as a way of winning over older people, who are more likely to vote.
But asked if he would retain the triple lock and Reform’s promise to raise the tax-free allowance from £12,500 to £20,000, Farage said: “I cannot tell you what the state of the economy will be as the next general election approaches.”
• Ben Wilkinson: The state pension triple lock needs to be retired
He predicted an “economic collapse” that would trigger a general election in two years time, adding: “If I’m right, and that election comes in 2027, then the economy will be in an even worse state than any of us in this room can even predict.
“So how can anybody project on pensions or thresholds or any of those things between now and then?”
Critics of the policy say it is increasingly “unsustainable”, given inflation remains double the Bank of England’s target, and growth is climbing more slowly.
Minimum wage
There is “an argument” for cutting the minimum wage for younger people, said Farage, who claimed that the costs of doing business for many firms “are now simply too high”.
Attacking Sir Keir Starmer, Farage said the government was “run by a group of human rights lawyers, not entrepreneurs”.
Farage failed to name a perspective chancellor out of the leading Reform members
RICHARD POHLE FOR THE TIMES
But pressed about the prospect of reducing the minimum wage, Farage seemed open to the move, or raising the threshold at which employees pay national insurance contributions from £5,000.
He said: “There’s an argument [that] the minimum wage is too high for younger workers, particularly given that we’ve lowered the level at which NIC is paid to £5,000 a year.
“So do one or the other. Either lift the cap at which NI is due, or lower the minimum wage for lower workers.”
New workers’ rights law
Farage said the new Employment Rights Act would bankrupt small and medium-sized businesses.
He stopped short of saying he would repeal the legislation — spearheaded by Angela Rayner when she was deputy prime minister — which boosts protections for workers from day one and bans exploitative zero-hours contracts.
• Labour ‘will not water down Employment Rights Bill’
However, Farage suggested the law should be amended to avoid it applying to smaller firms.
“The idea that the employment rights legislation should apply to a company with three employees, you have to start asking yourself a question: who’s that good for,” he said. “Well it’s not good for the company and it’s certainly not good for the worker.”
Farage said small firms made up 60 per cent of the jobs in the private sector, but were often ignored by the government. “It’s about time they had a voice in the public domain and the employment rights legislation will damage them and their employees,” he added.
Tax cuts
Farage scaled some of his 2024 manifesto pledges, saying “we can’t have massive tax cuts until the markets can see” more spending restraint from the government.
He signalled the first priorities for cutting taxes would be reversing Labour’s inheritance tax changes for agricultural land and raising income tax thresholds.
The latter has been frozen since April 2022 and is due to lift again from April 2028, but could be held for longer by Reeves as a form of “stealth tax”.
• How to plan for the upcoming Budget – expert Q&A
Farage defended disavowing much of the party’s economic plans in its 2024 manifesto, which experts estimated would cost up to £90 billion per year and contained spending increases of £50 billion per year.
Some of the big ticket promises in the manifesto included cutting corporation tax from 25 per cent to 15 per cent in three years, raising the inheritance tax threshold to £2 million, and a spending boost of £17 billion per year for the NHS.
Farage sought to portray himself as being on the side of workers, saying: “We are the party of alarm clock Britain.”
However, he conceded significant tax cuts would have to wait, adding: “We are being mature, we are being sensible, and we are not over promising.”
Reform’s shadow chancellor
The speech on Reform’s economic agenda was delivered by Farage, with a few MPs and other senior figures in the party watching on.
He denied the party was “a one man band”, but could not say who the party would put forward as its prospective chancellor come the next election.
Zia Yusuf was the chairman of Reform UK
RICHARD POHLE FOR THE TIMES
Zia Yusuf, a former Goldman Sachs banker who later set up his own luxury concierge company, has been touted as one option, with Richard Tice, the party’s deputy leader who also has a business background, in the frame as well.
Farage said there was a “broadening team” in Reform and “as we develop and build that team, we’ll start to give people labels”. But he added: “Right now, we’re not ready.”