UK PM Starmer warns Farage's 'fantasy' fiscal plans would crash the economy

By Alistair Smout

British Prime Minister Keir Starmer warned on Thursday that Nigel Farage would crash the economy if his Reform UK party ever won power, describing the tax and spending plans of his closest political rival as a "fantasy".

Starmer's centre-left Labour Party has seen its support tumble after imposing tax hikes and spending cuts since sweeping to power in an election last July. It suffered a bruising set of local election results this month, losing ground to Reform, which now leads national opinion polls.

Farage, who has haunted successive British governments by campaigning against European Union membership and on social issues, has combined a right-wing agenda of slashing immigration and taxes along with a more left-wing focus on greater state support for families and workers.

But Starmer said Farage's economic plan was similar to that of former Conservative Prime Minister Liz Truss, who resigned in October 2022 after less than two months in power when her 'mini budget' of unfunded tax cuts sent markets into a tailspin.

Farage had dubbed that budget the best since 1986, when his hero Margaret Thatcher headed a right-wing government pursuing privatisations, deregulation, and spending and tax cuts.

"We were elected to fix that mess (caused by Truss). Now in government, we are once again fighting the same fantasy - this time from Farage," Starmer said during a visit to a business.

"The same bet in the same casino: that you can spend tens of billions of pounds on tax cuts, without a proper way of paying for it."

The Institute for Fiscal Studies (IFS) said this week a Reform plan to hike the income tax personal allowance could cost 50 billion to 80 billion pounds ($67 billion to $108 billion).

'WORKING PEOPLE'

Pitching to Labour's traditional base, Farage said on Tuesday that Reform was now the "party of working people".

Starmer cited his own working class family background, saying: "I don't need lessons from Nigel Farage about the issues that matter most to working people in this country."

Farage said Starmer was resorting to "dirty tricks borrowed from the 2016 referendum campaign to attack me" - a reference to the Brexit referendum. "This is Project Fear 2.0."

One of Britain's most recognisable politicians, Farage only became a member of parliament for the first time last year when Reform won five seats. But the veteran campaigner has made successive governments shift policies out of fear of his populist appeal.

A YouGov poll this week showed Reform on 29% and Labour on 21%, though it also found Starmer was backed as the better prime minister than Farage by 44% to 29%, suggesting "a potential ceiling on support for (Farage's) party".

The Conservatives, Britain's main opposition party in parliament, lagged on 19%.

Starmer has a big parliamentary majority and another national election is not due until 2029. While he has said he is willing to take unpopular decisions to fix public finances, he has also shifted to tackle Farage head-on in recent weeks.

Despite facing an indebted and slow-growing economy, he has signalled he is open to two major policy shifts - a U-turn on cutting winter fuel payments to the elderly, and abolishing a two-child limit on some welfare payments - policies backed by his own lawmakers and Farage.

Starmer was also criticised by some in his own party for suggesting that immigration meant Britain risked becoming an "island of strangers", a clear shift in tone as he outlined tougher rules to cut net migration.

Jon Tonge, politics professor at the University of Liverpool, said Starmer was better off attacking Farage's economic policies than trying to outflank him on immigration.

"Starmer cannot match Reform's retail offer, it's a mistake if he goes down the road of trying to do that," he said.