Reform UK leader Nigel Farage has rowed back on his party’s previous promise to deliver tax cuts worth £90bn a year.

Ahead of last year’s general election, Reform’s pledges included slashing corporation tax, cutting stamp duty on home purchases and lifting the threshold when people start paying income tax.

However, Farage said “substantial tax cuts” were not currently “realistic” because of the “dire state” of the public finances.

He added that if Reform wins the next election, it would still make some “relatively modest” changes, such as raising tax thresholds and immediately scrapping inheritance tax for family farms and family-run businesses.

As well as promising huge tax cuts, Reform’s election manifesto last year also pledged to reduce “wasteful spending” across government by around £50bn a year.

However, the pledges prompted scepticism from some economists, with the Institute for Fiscal Studies think tank arguing the party’s proposed spending cuts would save less than promised, while the tax cuts would cost more.

Meanwhile, Reform’s economic plans have also been attacked by Labour and the Conservatives, who have accused Farage of making unfunded spending commitments.

In a wide-ranging speech setting out Reform UK’s vision for the economy, Farage sought to counter claims his party’s plans were not credible.

He accused both Labour and the Conservatives of failing to cut public spending and allowing the national debt to increase “in the most extraordinary way”.

“We want to cut taxes, of course we do,” he said.

“But we understand substantial tax cuts, given the dire state of debt and our finances, are not realistic at this current moment in time.”

He added that the state of the economy was now “far worse than it was in the run-up to the 2024 general election”.

Challenged during a Q&A session after his speech over how the public could trust Reform if it reversed promises it had made before the last election, Farage said: “We are being mature, we are being sensible and we are not over-promising.

“But for us not to take account of the dire state of our public finances, that, I think, would be irresponsible.”

He promised to make savings by cutting the benefits bill, reducing the size of the Civil Service and getting a “grip” on public sector pensions.

“But we can’t have massive tax cuts until the markets can see we’ve at least got these things in hand,” he added.

Farage insisted it was still Reform’s “aspiration” to lift the threshold when people start paying income tax to £20,000, saying this was “vital” for incentivising people to work.

But he said the party had to be “realistic about the state of the economy”, suggesting that by the time of the next general election it could be “in an even worse state than any of us in this room could even predict”.

In his speech Farage also:

• pledged to cut energy bills, saying policies like scrapping net zero subsidies and extracting more oil and gas from the North Sea could reduce bills by £165 a year
• promised a Reform government would bring in more advisers and ministers “with real business experience in their own sector”
• said his party would only remove the two-child benefit cap for British couples who were both working.

Labour minister Lisa Nandy said Reform’s sums “just don’t add up”.

She added: “You just can’t trust a word Reform say. Under any kind of pressure their whole programme is unravelling.”

Conservative shadow chancellor Mel Stride said Farage’s speech “has left the public with far more questions than answers”.

“Farage did not set out which of the £140bn of commitments he made last year he still stands by, and which he has now dropped,” he said.

“After this rambling, incoherent speech, it is clear Reform’s economy policy is in chaos.”

A Liberal Democrat spokesperson said: “Nigel Farage is exactly what he tries so hard to tell us he isn’t: a cynical member of the political class who will break his word whenever it’s of benefit to him and his party.”