Starmer: Farage’s ‘fantasy’ economics will lead to Liz Truss-style meltdown

Nigel Farage’s “fantasy” economics will lead to a Liz Truss-style economic meltdown, Sir Keir Starmer will warn, after the Reform UK leader set out his party’s proposed policies.

The Prime Minister is expected to urge the public to reject Reform UK’s calls to use “family finances” as a gambling chip on “unfunded” tax cuts.

This comes after the Institute for Fiscal Studies (IFS) said the party’s pledge to increase the income tax personal allowance to £20,000 a year could cost between £50 to £80 billion a year.

Speaking at a press conference in central London on Tuesday, Mr Farage said his measures were “aimed at British families” as he announced plans to scrap the two-child benefit cap and fully reverse the winter fuel payment cuts.

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'Mad experiment'

Responding to Mr Farage’s speech, IFS deputy director Helen Miller said the announcements on winter fuel payments and the two-child benefit cap were “dwarfed” by the change to income tax personal allowance.

On a visit to meet workers at a manufacturing business in the North West, Sir Keir is expected to brand Mr Farage’s policies a “mad experiment”.

But a Conservative frontbencher said voters have “lost interest” in Labour and that Sir Keir is “trying to basically aim his fire all around him”.

The Prime Minister is expected to say: “In opposition we said Liz Truss would crash the economy and leave you to pick the bill. We were right.

“And we were elected to fix that mess.

“Now in Government, we are once again fighting the same fantasy – this time from Nigel Farage.

“Farage is making the exact same bet Liz Truss did.

“That you can spend tens of billions on tax cuts without a proper way of paying for it.”

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'Gambling chip'

He will say Mr Farage is “using your family finances, your mortgage, your bills as a gambling chip on his mad experiment” and that the result will be the same as when Ms Truss “bet the house and lost”.

“£45 billion in unfunded tax cuts, with no means to pay for them.

“Markets reacted, the economy tanked and we’re all still paying the price for mortgages, rents and bills that spiralled out of control.

“I won’t let that happen.

“Labour’s Plan for Change has stabilised the economy, with growth at the fastest rate in the G7 this year, four cuts to interest rates, and a pay boost for 3.5 million low paid workers.”

Short-lived Conservative prime minister Ms Truss’s mini-budget spooked the financial markets in 2022 and led to a spike in mortgage rates.

Kevin Hollinrake, the shadow local government secretary, said the Prime Minister has “problems wherever he looks”.

He told Sky News: “The public’s lost interest in Labour. I mean, I don’t think they were ever popular at the despatch box – we were just unpopular, and we’ve got a big job to do on that particular score, but I believe we can do it.

“But also Reform, the ‘red wall’ as we call it, the working class voters, have completely lost faith in Keir Starmer and (Chancellor) Rachel Reeves and others, not least because of the disgraceful stripping away of the winter fuel allowance.”

Sir Keir is also facing danger from dissatisfied backbenchers, he said.

“So I can understand, he’s trying to basically aim his fire all around him. It’ll end up in a circular firing squad, I think, and it looks very bad for the Prime Minister right now.”