Reform tax pledges ‘not fiscally credible’, says think tank

Tax cut pledges made by Reform UK for Scotland are “not credible”, a leading think tank has said.

The party’s leader in Scotland pledged to re-align Scotland’s tax bands with the rest of the UK, as well as a 1p cut in all rates.

That would be followed by a further 2p cut in subsequent years of a Reform-led Scottish Government.

According to Malcolm Offord, the initial cut would cost £2 billion, with the subsequent reductions costing up to a total of £3.7 billion.

But the Reform manifesto, launched this week, claims the tax cuts will deliver economic growth, with each percentage point of growth bringing £8 billion of additional tax revenues over 10 years.

In an update released on Friday, David Phillips, head of devolved and local government finance at the Institute for Fiscal Studies (IFS), said: “This is not credible. Specifically, the manifesto’s claim that each percentage point of additional economic growth would generate a cumulative £8 billion over 10 years and that this would ‘repay the £2 billion up-front cost four times over’ is wrong in two important ways.”

Firstly, he said, the Scottish Fiscal Commission – the independent forecasters of Scotland’s public finances – suggest that each percentage point would bring £300 million in tax revenues to Scotland, while he also pointed out that the £2 billion cost of the tax cuts would be annual rather than one-off, and “£8 billion over 10 years does not exceed £2 billion per year, let alone repay it four times over”.

Mr Phillips added: “The ‘self-funding’ tax cuts are therefore a mirage created by a misunderstanding or misrepresentation of the current devolution settlement and incorrectly comparing cumulative and annual figures.

“This is not good enough.

“The analysis of the potential revenue effects of the headline income tax cuts is unserious at best.”

Reform UK has been contacted for comment.

Scottish Lib Dem economy spokesman Jamie Greene said: “Coming after a clown show of a launch event and the deselection of a candidate 24 hours after they were announced, this is further confirmation that Reform UK are not a party to be taken seriously.

“Malcolm Offord and Nigel Farage’s offer to Scottish voters is incoherent to the point of insult and will do nothing to fix public services in dire need of repair after two decades of mismanagement.”

Scottish Tory economy spokesman Murdo Fraser said the response was a “devastating verdict” for the party.

“Lord Offord’s back-of-a-fag packet calculations have been torn apart by the IFS and are simply not a credible set of proposals for Scotland’s economy,” he said.

“It is embarrassing that they have made such basic errors in their manifesto, which shows they are not serious about growing our economy.

“By sharp contrast, the Scottish Conservatives have produced detailed plans to give Scots a much-needed tax cut which would be delivered by reining in the SNP’s out-of-control benefits bill.”

Labour finance spokesman Michael Marra said the pledged showed Reform not to be a “serious party”.

“Their manifesto is nothing more than a flimsy document that provides no credible solutions to the problems facing Scotland today,” he added.

“Nigel Farage is a chancer and a charlatan. His promises aren’t worth the paper they are written on, and he clearly does not understand Scotland or devolution.

“The economic mismanagement of the SNP for the last two decades has seen our public services neglected, and people feeling worse off financially. It is clear that Scotland needs change.

“Reform are not a serious party. They will only help the SNP to cling onto power. Only Scottish Labour can remove the woeful SNP and offer the people of Scotland the chance to take a new direction.”