We think it is safe to say that any General Election is important, however the one coming up on 8th June is potentially the most important one Britain has held in 40 years (since we entered the EU). How this election plays out will likely determine the direction of travel for this country and Britain as a whole for many years to come, affecting our future relationship with the EU — perhaps whether the United Kingdom remains a Union, whether freedom of movement within the EU disappears, whether gas, rail and water companies are privatised, and so on.
The three main parties, having now released their manifestos (some release dates more planned than others), have given clues as to their plans for the country over the next five years. The Liberal Democrats have a headline grabbing policy of £6 billion more for the NHS, as well as a potential second Brexit referendum. Labour have said they will add £7 billion NHS funding as well as re-nationalising all the water companies as well as the rail companies, while keeping the ‘Triple Lock’ on pensions. And the Conservatives are planning to input £8 billion into the NHS whilst scrapping the ‘triple lock’ on pensions and introducing a ‘double lock’ in its place.
All very interesting but how will their plans affect accountants and their clients?
From a finance point of view, there are some pretty eye-catching pledges too. The Tories have vowed to reduce Corporation Tax down to 17% by 2020. They plan to increase the higher rate tax threshold to £50,000 by 2020 and the personal allowance to £12,500 also by 2020. Labour have vowed to bring back 50% tax on earnings over £123,000 and to bring the 45% tax threshold down to £80,000. The Liberal Democrats are pledging to increase Income Tax by 1%, to restore Corporation Tax to 20% and to scrap the lower level of Inheritance Tax.
Whilst these pledges in their respective manifestos are important we are quite sure the most important policy areas will not revolve around fiscal and monetary plans; the key to this election will likely be Brexit and how each party will deal with it. The Liberal Democrats have vowed to fight to remain in the EU; Labour have pledged to, “build a close new relationship with the EU”, which prioritises jobs and workers’ rights, and to retain the benefits of the single market and customs union. The Conservatives say that they want, “the best possible deal for Britain…” while maintaining “…a deep and special partnership with the 27 remaining member states.”
The polls are indicating a Tory win, but it was predicted in 2015 that there would be a hung parliament, and also predicted we would vote to remain in the EU (while separately they suggested a Hillary Clinton presidency was most likely). This being a less finely-balanced election, it is likely that the Tories will win by a good majority, however things can change quickly in politics so watch this space!