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Farage pinned NEW

We launch our new UKIPwatch blog today with the first in a series: Pinning Down Farage. Just as Pinning Down Miliband scrutinises and exposes the failings of Labour policy, this series will do the same for UKIP.

UKIP policy is designed to be like a fog. It might give an impression of where they stand, or where they’d like you to think they stand, but if anyone tries to grasp it the intention is that it should be intangible enough to swirl away – allowing instant deniability.

But with one MP, and the prospect of at least a few more come May, what the insurgents actually think matters. What programme are they laying out for the nation? What might their proposals be should they find themselves in coalition negotiations? What do they think about how the country should be governed?

We’ll ask these questions on a number of fronts over the coming weeks, but let’s start with economic policy.

2010

As part of the fog approach to policy, UKIP has now distanced itself from its entire 2010 manifesto – in January, Nigel Farage claimed he hadn’t put it together or read it, despite having signed the foreword – but it gives an insight of sorts into where they have come from. The document has apparently been deleted from their website, but it’s still available elsewhere online, as is the more detailed report of their economy working group.

In some ways, it was a radical rightist pitch – cutting state spending back to 1997 levels, introducing a flat tax, raising the income tax threshold to £11,500 and abolishing a raft of EU regulations and Brussels-inspired taxes.

At the same time, though, they proposed a sizeable economic stimulus through a programme of state building of nuclear power stations (£3.5 billion per annum), prisons (no cost specified), flood defences (£3 billion per annum), increased defence commissioning (an extra £4 billion per annum) and – wait for it – “a transport investment programme centred on high-speed rail lines”. Yes, high speed rail lines. Three new high speed rail lines, in fact – London-Newcastle/Manchester; London-Bristol-Exeter; and London-Birmingham.

In short, they denounced the scale of public spending while simultaneously promising to spend billions more. The excuse used to jam that square peg into the round hole was that we would save money by no longer paying cash to the EU – but our EU subscriptions are less than their planned stimulus spending alone.

How things have changed

It’s fair to say there are a number of inconsistencies between UKIP 2014 and UKIP 2010. Yes, they’ve distanced themselves from that manifesto, but let’s consider what UKIP says when other parties break promises.

The Conservative Party hasn’t done some of the things it said in its General Election manifesto. UKIP’s reaction is to cry LibLabCon, to allege that this is proof of the Westminster establishment’s lies. And yet, in most instances the Tory leadership is open about the fact that it would still like to fulfil its pledges but is constrained by the lack of a Commons majority and the practicalities of coalition. By contrast, UKIP simply ditches its past promises and either pretends never to have heard of them or dismisses them as irrelevant – behaviour it would condemn in anyone else.

As a self-proclaimed major party of British politics, they deserve to be subjected to the appropriate standards of scrutiny.

The party’s 2015 manifesto has yet to be published, but we do have two key sources to refer to in order to gain an insight into what it will likely say. The first is an interview given by Tim Aker MEP, their Head of Policy, to Progress Magazine in August. The second is the conference speech titled “UKIP’s economic plan”, delivered by Patrick O’Flynn MEP, their newly appointed Economy Spokesman.

Here are a few examples of the way things have changed since 2010:

  • High-speed rail: Having proposed three high speed lines in 2010, UKIP now opposes the one which the government is building. Their defence is to say that they object to the route because of its impact on the countryside – although it’s hard to see how three lines would have had less impact, and intercity lines rather inevitably run through the countryside regardless of how you rejig the route.
  • Flat tax: In June, Farage publicly ditched flat taxation on the Andrew Marr show. He said his party hadn’t explained it well in 2010, but then abandoned it entirely rather than trying to explain it better. Furthermore, O’Flynn announced at their recent conference that the party would deliberately further complicate the tax system by introducing a new 35p rate of income tax.
  • Higher business taxes: 2010’s tax-cutting rhetoric is in stark contrast to another gem in O’Flynn’s speech:

“UKIP proposes that a Treasury Commission, using the best brains of that elite Whitehall department, be set up to design a turnover tax for large businesses. Every major company would have to show it had paid a set proportion of its turnover in corporation and other taxes or would face an additional charge.”

Essentially, a tax on unprofitable businesses – hardly an enterprise-friendly environment or an encouragement to invest in the UK. To top it all, that “Treasury Commission using the best brains of…Whitehall” sounds an awful lot like a quango – something else the 2010 manifesto promised to clamp down on.

What doesn’t work

Of course, parties do have the right to change their minds on things (though they ought to admit they have done so and explain why, not simply try to move on as though nothing ever happened). It’s troubling that UKIP has performed so many about-turns since 2010, but it might be forgivable if it was to generate better ideas.

So how do the policies we know of so far stack up? As well as the proposals for higher taxes on businesses and greater income tax complexity, there are at least a couple of other problems:

  • Ban foreign investment: In traditional foggy phrasing, Aker hints at restrictions on foreign investment:

    “There is a discussion going on about whether foreign governments have the right to buy up stakes in our national assets and national resources”
    So much for the “free trade” which features so prominently on the UKIP website. A major success of the British economy in recent years (thanks in part to the safe haven status gained by not joining the Euro) has been in attracting Foreign Direct Investment – creating jobs in the UK and funding our industries. The new openness to the world economy we would gain by leaving the EU is a common UKIP theme, but it seems their first response to it would be protectionism.
  • Bedrooms for no-one: As I pointed out in August, the first hints of UKIP’s welfare policy are confused to say the least. Aker has said they are “firmly against the bedroom tax”, but also that they oppose bigger houses for those with more children. In summary: no bedrooms for actual children, taxpayer-funded unoccupied bedrooms for those without. Which is odd.

The rise of Red UKIP

As their newfound attachment to protectionism, taxing business and opposing the so-called “bedroom tax” suggests, the pursuit of votes at the expense of principles has seen UKIP shift leftward in recent weeks.

They have chosen to chase Labour votes, and at the same time have picked up a large chunk of new members who are left-leaning – two factors that combine to drive the creation of what has been termed Red UKIP.

In a way, it’s an extension of their commitment to the Lib Dem playbook – a smaller party can maximise its chances by posing as all things to all people.

Perhaps that’s how it started – saying left-wing things (promising to protect benefits in the Wythenshawe by-election, for example) but reverting to Farage’s centre right economic stances on the national stage. But now left wing economics and rhetoric are gaining a real foothold at the top of the party:

  • The Handbag Tax: An attention-grabbing part of O’Flynn’s Economic Plan was announcing a feasibility study of a “luxury goods rate of VAT” (incidentally, VAT was one of those taxes UKIP pledged to abolish in their 2010 manifesto, but hey). An envy tax targeted at the “very well heeled”, this would be levied through arbitrary price thresholds for shoes, handbags and cars. After what is reported to be a stand-up row, Farage junked the idea two days later, taking advantage of the foggy language to say it was just an idea. But the fact remains: this was UKIP’s Economy Spokesman, their equivalent of George Osborne or Ed Balls, proposing a tax to punish the successful. His leader forced him to u-turn this time, but that isn’t much of a reassurance as to his instincts.

Nor is this likely to be the end of the shift leftwards. The New Statesman reported on a UKIP fringe meeting discussing how to target Labour voters, at which one activist and regular candidate, Ian Dexter, advocated mass renationalisations, said that “money has to be prised out of the rich” and argued against his party’s pledge to abolish Inheritance Tax. With the party planning to target more Labour voters, and more lefties joining its machine, I doubt we’ve seen the end of Red UKIP.

More to come?

Of course, UKIP’s full 2015 manifesto is yet to be published. We’ll know more when it comes out, but the signs aren’t encouraging thus far. With complete about-turns on previous pledges, increased complexity in the tax system, new levies on business, as well as flirtations with protectionism and unpleasant envy taxes, their economic policy is in a troubling state.

Foggy, deniable language might work on TV, but not if you seek to be a “kingmaker” in Government. None of us can afford for someone to play games with the British economy.

152 comments for: Pinning Down Farage: What is UKIP’s economic policy?

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