Reform UK’s fiscal plans could spark ‘Sterling crisis’, economist warns
Reform UK deputy leader Richard Tice has hinted at ambitions to become chancellor if his party wins the next general election. What does this mean for the UK’s finances?
Simon French, an economist at Panmure Liberum who has advised the government, estimates that Reform UK’s plans would leave the UK with an “immediate” fiscal gap between £70-£80bn a year. This would risk an “immediate and violent” Sterling crisis, French said.
French also wrote that Reform’s plans to “experiment” with “an immediately higher fiscal deficit profile – of an additive scale set to be two-to-three times larger than anything attempted by the 2022 Mini Budget or 2024 October Budget” would result in substantially higher commercial and household interest rates.
Nick Robinson asked Tice about the report on the BBC’s Political Thinking. “You’re doing a bit of a Liz Truss. You’re giving away lots of money on tax cuts … spending money on nationalizing things, giving us all sorts of free things, not paying for it,” Robinson said.
‘Juvenile claptrap’
Tice, who called the report “Juvenile claptrap from City economist who didn’t even bother to check his fag packet [calculations] with me,” responded that he has consistently been “proven right” on economic matters.
Tice cited his stance that the Bank of England should not be “voluntarily be paying interest on all the printed money,” that “we shouldn’t be doing quantitative tightening,” and on the cost of achieving “net ‘stupid’ zero.”
Polling data by City PM and Freshwater Strategy indicates that those who voted for Reform in the recent council elections did so primarily due to a desire for change, as well as for Reform’s stance on immigration.
Only four per cent cited Reform’s ability to bring about economic growth, only two per cent cited tax cuts, and only six per cent voted for Reform because of their policies.
When he was asked by Robinson if he might be tapped as the potential Reform government’s chancellor, Tice responded “I’m not going to assume anything, but…”
Tice admitted he was born “with a silver spoon in his mouth” and had an “early kickstart,” but that he has “been around the block.”
Tice, who was the chief executive of real estate firm CLS holdings from 2011 to 2014, spoke to his credentials as a businessman.
“I’ve run a multi-billion pound, multi national business, listed on the stock exchange, where in four years I’ve tripled the share price … I’ve been around the block,” he said.