Robert Jenrick has set out what he would do as Chancellor (Image: PA)

Chancellor John Healey has been urged by Reform UK to cut £40billion in “wasteful spending” so households can benefit from “£1,300 in tax relief”. Robert Jenrick – Nigel Farage’s pick to serve as Chancellor in a Reform Government – plans to cut £20billion from the welfare budget, £8billion from net zero subsidies, £6billion from foreign aid, £2 billion from quangos and the civil service, and £3 billion from “student loans to dead-end degrees and foreigners” if he can take control of the Treasury. He also plans to raise £1 billion from the immigration health surcharge.

Mr Jenrick is calling on the Chancellor to use £18billion of savings to hike the tax-free personal allowance to £15,000. He argues this would “leave the average household £1,000 better off”.

He said: “We can’t go on like this. Britain is broke. We need emergency spending cuts so we can give families and businesses tax relief. Benefits Burnham has chosen to kick all the tough decisions down the road. He can’t seem to find a single piece of wasteful spending to cut. Frankly, it’s a cowardly abdication of his duty to safeguard the country’s finances.”

As well as taking £250 off people’s energy bills and scrapping the fuel duty hike, Mr Jenrick wants to use savings to invest in defence and “restore fiscal headroom”.

On Monday, Mr Farage and Mr Jenrick plan to set out Reform UK’s “economic rescue plan”. While the Chancellor will present the Budget “red book”, Reform will produce a “teal paper”.

Reform UK’s £40 Billion Plan of ‘Emergency Cuts’ to Save ‘Broke Britain’

Reform UK has unveiled an ambitious economic rescue plan centred on £40 billion in proposed savings, arguing that Britain needs urgent action to control public spending, reduce taxes and ease the financial pressure on households.

The proposals, promoted by party leader Nigel Farage and Treasury spokesman Robert Jenrick, place government spending at the centre of the debate over Britain’s economic future.

With Chancellor John Healey preparing his Budget, Reform is attempting to present an alternative approach that it says would leave working people with more money in their pockets while restoring control over the country’s finances.

Jenrick has described Britain as being in a serious financial position and argued that families and businesses should not have to carry the burden of what his party considers excessive government expenditure.

The central promise is straightforward: identify billions of pounds in savings, use part of the money to cut taxes and energy costs, and direct the remainder towards strengthening the public finances.

However, the scale of the proposed reductions has already raised important questions about whether the savings can be delivered without creating new pressures on public services and vulnerable households.

Where would the £40 billion come from?

Reform’s plan identifies several areas where it believes spending could be reduced.

The largest proposed saving is £20 billion from the welfare budget. The party argues that changes to eligibility, stronger requirements for people who are able to work and tighter controls on benefit spending could reduce the amount paid by the state.

Reform has also proposed cutting £8 billion associated with net-zero subsidies, including support for selected green energy and environmental programmes.

A further £6 billion would come from reducing foreign aid, while £2 billion would be targeted at quangos and the civil service.

The party has additionally identified £3 billion in savings linked to student loans, including changes affecting certain university courses and international students. Another £1 billion would be raised through the immigration health surcharge.

Together, these figures form the headline package that Reform says could free up £40 billion for its economic programme.

There is, however, an important distinction between spending cuts and additional revenue. The proposed £1 billion from the immigration health surcharge would be money raised rather than expenditure removed. The announced figures therefore combine different types of financial measures.

The overall savings would also need to be assessed against the practical costs of implementing the proposals, including any transitional expenses and effects on other parts of government spending.

A higher tax-free allowance for workers

One of the most prominent elements of the plan is a proposal to increase the personal income tax allowance from £12,570 to £15,000.

If implemented, the change would mean that eligible taxpayers could earn more before beginning to pay income tax.

Reform argues that the increase would help working households retain a greater share of their earnings, particularly at a time when many families remain concerned about food prices, housing costs, transport expenses and energy bills.

The party has linked the tax proposal to a broader promise of relief worth up to £1,300 for the average household.

Its estimates include around £1,000 in benefits associated with the proposed tax changes, £250 from reducing energy bills and approximately £50 from fuel-duty measures.

These are Reform’s own projections rather than independently established outcomes. The actual benefit would depend on a household’s income, energy consumption, driving habits and eligibility for the different measures.

Households with different financial circumstances would not necessarily receive the same amount.

The proposal also raises questions about how the government would replace the income-tax revenue it would lose. Reform says spending reductions would provide the funding, but the reliability of that calculation depends on whether the proposed savings can be achieved in full.

Welfare reform at the centre of the argument

The proposed £20 billion reduction in welfare spending is likely to become one of the most contentious parts of the programme.

Reform argues that the benefits system should provide support to people who genuinely need it while encouraging those capable of working to find employment.

The party has indicated that it would seek tougher rules for some working-age claimants, review decisions on benefit eligibility and reinstate restrictions affecting certain families.

Supporters of stricter welfare policies argue that public money should be directed towards people who cannot support themselves, while the system should offer stronger incentives for employment where possible.

Critics, however, warn that broad spending targets can overlook the complicated circumstances faced by people with disabilities, long-term health conditions, caring responsibilities or limited access to suitable jobs.

Reducing welfare expenditure on paper does not automatically guarantee that the government will save the full amount anticipated.

The result would depend on the details of the eligibility rules, the administrative costs of implementing changes, the availability of employment and the effect on other public services.

If people lose financial support without finding work, some costs could potentially reappear elsewhere, including through local authority assistance, housing support or pressure on health services.

The challenge for policymakers would therefore be to distinguish between reducing avoidable expenditure and withdrawing assistance from people who have few realistic alternatives.

Foreign aid and net-zero spending face major cuts

Reform’s proposals would also represent a substantial change in Britain’s approach to foreign aid and environmental policy.

The party wants to reduce foreign aid spending by £6 billion, arguing that government resources should be concentrated more heavily on domestic priorities.

The proposal would require difficult decisions about which international programmes should continue, which should be reduced and how Britain would respond to humanitarian emergencies.

Supporters may argue that taxpayers should see a clearer domestic return from government expenditure. Opponents may point to the diplomatic, humanitarian and security purposes of international assistance.

The £8 billion target associated with net-zero subsidies presents a different set of questions.

Reform opposes a number of government subsidies and programmes intended to support the transition towards lower-carbon energy. It argues that reducing these costs could help lower energy bills and improve the competitiveness of British businesses.

Yet the eventual effects would depend on how the cuts were designed.

Some businesses may benefit from reduced policy costs, while others could lose grants or incentives that influence investment decisions. The impact on energy prices would also depend on wholesale markets, network costs, taxes and other components of household bills.

A reduction in subsidies does not automatically translate into an equivalent reduction in the amount consumers pay.

Can the savings fund the promised tax relief?

The financial arithmetic is central to Reform’s argument.

The party says it can reduce spending and raise additional revenue sufficiently to finance tax cuts, energy-bill relief and other economic measures while improving the country’s fiscal position.

However, the proposed savings are targets that would need to be translated into detailed policy decisions.

For example, a government seeking to reduce welfare expenditure by £20 billion would need to specify which payments would change, how many people would be affected and when the savings would become available.

Similar calculations would be required for foreign aid, environmental subsidies, student finance and the civil service.

The timing also matters. Some changes could take years to produce their full financial effect, while tax reductions could begin affecting government revenue much sooner.

If the savings arrived later than expected, the government might need to borrow more, delay tax cuts or identify alternative funding.

Reform says its economic programme is designed to address the country’s financial difficulties, but independent scrutiny of the detailed assumptions would be important before the projected benefits could be treated as certain.

Public services and national debt

The debate is taking place against concerns about Britain’s public finances, including national debt, borrowing costs and the competing demands placed on government spending.

The state must fund services such as healthcare, education, policing, defence, transport and social care while also meeting the cost of servicing existing debt.

Reform argues that reducing what it describes as wasteful spending would create room to lower taxes without sacrificing essential services.

The party has said that its approach would protect major public services while redirecting money away from programmes it considers ineffective.

The difficulty is that large spending reductions rarely affect only administrative budgets. Welfare rules, environmental programmes, international assistance and student finance all involve individuals, institutions and businesses that may be affected by policy changes.

The precise impact would depend on the final design of the reforms.

There is also a distinction between cutting annual expenditure and reducing the national debt itself. Savings could improve the government’s budget balance, but the effect on borrowing would depend on the tax reductions introduced, other spending commitments and the wider performance of the economy.

If lower taxes helped encourage employment, investment and economic growth, the government could potentially benefit from a stronger tax base over time. But the scale and timing of such benefits are uncertain and should not be assumed in advance.

What the plan means for businesses and workers

Reform’s economic proposals extend beyond the immediate £40 billion savings package.

The party has presented a wider programme intended to encourage business investment, reduce regulatory requirements and support domestic energy production.

Jenrick has argued that businesses need lower costs and fewer barriers if they are to expand, employ more people and compete internationally.

For small firms, the attraction of lower taxes and simpler regulation could be significant, particularly for businesses operating with narrow profit margins.

Workers could also benefit if employers respond to improved conditions by expanding operations or offering more opportunities.

However, the results would depend on the wider economic environment. Businesses make decisions based on demand, access to finance, workforce availability, energy prices and confidence in future policy.

Reducing regulation may remove unnecessary obstacles, but safeguards can also serve purposes such as protecting workers, consumers and the environment. The question is whether proposed changes deliver measurable economic benefits without creating disproportionate costs elsewhere.

The government and opposition will therefore need to explain not only the savings they expect but also the consequences of their choices.

A major test ahead of the Budget

Reform’s £40 billion plan has placed public spending, tax relief and the future of Britain’s economic strategy firmly in the political debate.

For Farage and Jenrick, the argument is that the country cannot continue spending at its current level without making difficult choices. They believe large reductions in selected budgets could create room to reward work, reduce household costs and strengthen the public finances.

For critics, the key questions concern the distribution of the cuts, the feasibility of the savings and the risk that reductions could place additional pressure on people who rely on public support.

The proposed increase in the personal allowance is an easily understood promise, but delivering it alongside other tax reductions would require the spending calculations to hold up under detailed examination.

The welfare changes would need to distinguish between people who can realistically return to work and those who cannot. Cuts to environmental subsidies would need to be assessed against their effects on energy costs and investment. Reductions in foreign aid and administrative spending would require clear decisions about priorities.

Ultimately, the plan will be judged not only by the headline figure but by its detailed assumptions and practical consequences.

Britain’s economic debate is about more than whether government spending should rise or fall. It is also about which services should be prioritised, how the tax burden should be distributed and what policies are most likely to support sustainable growth.

Reform UK has offered a clear set of targets and a promise of substantial tax relief. Whether those ambitions can be delivered together will depend on the evidence behind the proposed savings, the choices made during implementation and the response of households and businesses.

As the Budget approaches, the central question is whether the party’s proposed emergency measures can produce the financial improvements it promises while maintaining the public services and economic stability on which the country depends.