(Bloomberg) -- Britain’s insurgent right-wing party Reform UK wants to overhaul the Bank of England’s money printing program to save billions of pounds for manifesto pledges.

Nigel Farage, leader of Reform who is standing to be MP for Clacton, said he would save £35 billion ($45 billion) by scrapping interest on central bank reserves, created as part of the BOE’s £895 billion quantitative easing operation to prop up the economy between 2009 and 2021.

The bank is now winding down the program, a process known as quantitative tightening, which Reform has also vowed to end. About £700 billion of the QE program remains and the BOE has said it would like to reduce that to zero.

Reform, which was formed out of the old Brexit Party and campaigns for lower migration, is emerging as a serious threat to the ruling Conservatives, which are on course to lose power at the general election on July 4. Labour is 20 points ahead of the Tories in opinion polls, and Reform is gaining ground. Farage said his ambition is to replace the Tories as the “real opposition.”

Reform’s plans threaten to drag the BOE into the election debate by drawing attention to the huge losses from QE, which must be paid by the taxpayer under a guarantee signed in 2009.

Although the program made £124 billion of profits during the years of low interest rates until 2022, the money has been spent. Since late 2022, the Treasury has transferred £60 billion to the BOE and the central bank expects to incur about £160 billion more in losses over the next decade.

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% 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. A recent report from the select committee raised issues about QE’s value-for-money but concluded: “We do not support cutting the renumeration of Bank reserves. We believe taxes on banks should be set through Parliament in a Finance Bill.”

According to a report in the Telegraph newspaper, Reform plans to switch the remaining £700 billion of QE into 75-year bonds. The party will unveil its manifesto on Monday, when it is expected to reveal that the £35 billion of savings from QE and £50 billion from cuts to public spending will be used to clear National Health Service waiting lists and lower taxes.

The party will raise the minimum income tax threshold from £12,571 to £20,000 and the 40% threshold from £50,000 to £70,000, The Telegraph reported. Reform also wants to scrap inheritance tax for estates under £2 million and end stamp duty on properties worth less than £750,000.

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