Nigel Farage is preparing to outline how Reform UK would slash taxes if they get elected into government – although he’s not too hot on the details.
The man who is standing to be MP for Clacton reckons his party can save £50 billion by scrapping interest on central bank reserves and cutting NHS diversity training.
It comes almost eight years on from the Brexit referendum, when Vote Leave promised to give £350 million a week to the NHS if Britain voted for Brexit.
Speaking to the BBC on Sunday, Farage said: “The Bank of England is paying vast amounts of interest on their QE borrowing. Yes, I know it’s very technical. I’m doing a press conference in which I’ll lay out how we can save £35 billion before we even start.”
The press conference is on Monday.
A Reform spokesman did not comment but the party has argued that the BOE is “negligently costing the taxpayer billions” and claims that other central banks are not paying interest on reserves.
Two former BOE deputy governors, Paul Tucker and Charlie Bean, have suggested “tiering” reserves, in which a portion would be paid either zero interest or a discounted rate. But they have warned that paying no interest at all would jeopardize the BOE’s ability to control interest rates. The ECB pays zero interest on just 1 per cent of its reserves.
BOE Governor Andrew Bailey and other economists have pointed out that the proposal is effectively a stealth tax on banks, which are the current beneficiaries. Four UK banks — NatWest Group Plc, Lloyds Banking Group Plc, Barclays Plc and Santander UK – made £9.23 billion last year from interest on reserves, they told the Treasury select committee, a cross-party group of MPs.
Banks would be expected to recover the lost income by raising borrowing costs for customers and cutting savings rates.
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