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Politics
Nigel Farage’s ‘fantasy’ policies will lead to Liz Truss-style economic meltdown, Sir Keir Starmer to warn
Nigel Farage’s “fantasy” policies will lead to a Liz Truss-style economic meltdown, the prime minister will warn today.
Sir Keir Starmer is set to argue that Reform UK’s pledges would cause mortgages, bills and rent payments across the country to surge.
On Tuesday, Mr Farage vowed to reverse cuts to winter fuel payments and scrap the two-child benefit cap, with an ambition to slash income tax.
But new analysis from the Institute of Fiscal Studies suggest that his party’s aim of hiking the personal allowance to £20,000 a year could cost between £50bn to £80bn a year.
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Will PM’s ‘Farage lite’ strategy work?
Visiting manufacturing workers in the North West, Sir Keir will describe Reform’s economic agenda as a “mad experiment”.
He is expected to say: “In opposition we said Liz Truss would crash the economy and leave you to pick up the bill. We were right – and we were elected to fix that mess.
“Now in government, we are once again fighting the same fantasy.”
Labour is criticising Mr Farage for betting “that you can spend tens of billions on tax cuts without a proper way of paying for it”.
The prime minister will add: “Just like Truss, he is using your family finances, your mortgage, your bills as a gambling chip. The result will be the same. Liz Truss bet the house and lost.”
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Angela Rayner ‘hoping’ for winter fuel update
Sir Keir is referring to the former prime minister’s mini-budget in 2022, which had proposed abolishing the top 45% rate of income tax.
But this policy, among others, spooked financial markets and led to economic turmoil in the UK – with a dramatic spike in the cost of government borrowing feeding through into interest rates.
Mr Farage has argued that his measures can be paid for by scrapping net zero commitments and ending the use of hotel accommodation for asylum seekers.
Recent polls have put Labour second behind Reform UK, while the local election results earlier this month saw Mr Farage’s party win a parliamentary by-election, control of 10 councils and two mayoralties, while Labour lost almost 200 seats.
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Farage could ‘definitely’ become next PM
Sir Keir has been under pressure from his backbenchers to regain the initiative, leading to the party’s U-turn on winter fuel payments last week.
Plans to scrap the two-child benefit cap have also not been ruled out by ministers, in what would be a second reversal of current Labour policy.
Dominic Cummings, the former top aide to Boris Johnson, exclusively told Sky News he believes Mr Farage could “definitely” become the next prime minister, with the right strategy.
Elon Musk confirmed that he’s quitting as the White House’s government cost-cutting czar after admitting it was an “uphill battle” trying to slash federal jobs and programs.
Musk’s status as a Special Government Employee leading the Department of Government Efficiency (DOGE) meant that by law, he could only serve for a maximum of 130 days, which was set to finish on May 30.
Musk confirmed his exit in a May 29 X post, thanking President Donald Trump “for the opportunity to reduce wasteful spending.” Reuters reported that a White House official said his “off-boarding will begin tonight.”
Musk told The Washington Post for a May 27 report that the “federal bureaucracy situation is much worse” than he expected, and it was “an uphill battle trying to improve things in DC, to say the least.”
In separate comments to CBS, Musk criticized the multi-trillion-dollar tax break package that House Republicans approved on May 22, claiming it would increase the budget deficit and undermine the work that DOGE is doing.
DOGE, which is named after the cryptocurrency, claims to have saved taxpayers $175 billion since Trump’s Jan. 20 return to the White House, a figure heavily disputed by multiple news outlets, which report the figures are overstated, have multiple errors and are inaccurate.
The project’s claimed savings are only 8.5% of Musk’s initial ambition to cut $2 trillion from the federal budget, which he later revised down to $150 billion.
According to the Reuters report, DOGE has cut almost 12%, or 260,000, of the 2.3 million federal workforce through layoffs, buyouts and early retirement offers.
Despite the criticisms, Musk said on X that DOGE’s mission will “only strengthen over time as it becomes a way of life throughout the government.”
It comes as a federal judge allowed a lawsuit to proceed that accuses Musk and DOGE of illegally exerting power over government operations.
The lawsuit, filed by 14 states, alleged that Musk and DOGE violated the Constitution by illegally accessing government data systems, terminating federal employees and canceling contracts at federal agencies.
Musk admits he spent too much time in politics
In a May 28 interview with Ars Technica, Musk, the CEO of EV maker Tesla, admitted that he spent “a bit too much time” in politics, which some critics claim has impacted Tesla’s performance.
“I think I probably did spend a bit too much time on politics,” Musk said. However, he added that the time he spent on DOGE wasn’t as significant as many believed, and he blamed media coverage for overrepresenting his involvement.
“It’s not like I left the companies. It was just relative time allocation that probably was a little too high on the government side, and I’ve reduced that significantly in recent weeks.”
When Musk announced in Tesla’s first quarter report that his time spent on DOGE would drop significantly in May, Tesla (TSLA) shares rose over 5% in after-hours trading, despite the company reporting an 80% drop in net income.
As of March 31, Tesla still held 11,509 Bitcoin (BTC), currently valued at about $1.24 billion.
Related: Musk confirms X Money beta testing ahead of planned 2025 launch
Tesla shares are still down 5.9% year to date, in part due to Musk diverting his attention away from the company and Tesla’s sales falling considerably in the first quarter.
However, the fall is in line with other Big Tech firms, including Apple (AAPL), Nvidia (NVDA), Amazon (AMZN) and Google (GOOG), which are also in the red in 2025.
Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight
Former Commodity Futures Trading Commission Chair Rostin Behnam has said the crypto market will remain unregulated unless the agency he led is given greater authority.
In a May 28 Bloomberg TV interview, Behnam sided with the crypto industry on its long-standing argument that cryptocurrencies are commodities.
“If you look at existing law, the few largest tokens are commodities, which means the SEC does not have jurisdiction over those tokens, which include Bitcoin and Ether,” he said.
He added that the Securities and Exchange Commission currently cannot properly regulate crypto because its law doesn’t allow it to regulate commodities, and the CFTC cannot regulate because it is a derivatives regulator.
Without new authority for the CFTC to regulate “cash markets in digital assets, non-securities,” this will remain an unregulated space, he claimed.
Behnam comments amid increasing scrutiny of the Trump family’s crypto ventures, which include the crypto platform World Liberty Financial, memecoins and a stablecoin.
On May 28, American political strategist and political commentator Sanders Townsend said Donald Trump is boosting his family’s investments in cryptocurrency and “is using the presidency to do it.”
The administration’s involvement in the regulatory process and legislative effort is “raising red flags” among some members of Congress, and there are “well-baked rules” for any elected or appointed government official that need to be complied with, he said.
“Ultimately, until we do something, the [crypto] market will remain unregulated. Customers, investors, retail and institutional, will be more vulnerable to harm, fraud, manipulation and conflicts of interest, until the market is regulated.”
Regulation critical to financial markets, says Behnam
Behnam also weighed in on Vice President JD Vance’s speech at the Bitcoin 2025 conference, backing up the need for crypto regulations.
Related: Trump’s use of presidential seal at memecoin event raises legal questions
Vance said in a speech at the event that “we reject regulators” and that crypto “has a champion” in the White House.
“Regulators are extremely important,” Behnam said. “They’re the reason American markets are the most desired in the world.”
“Consumer protections and enforcement of the law are extremely critical to the health of our financial markets,” he added.
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