Tomorrow, on the 8th June we go to the polls to vote. Whilst we vote for our Member of Parliament, it is the case that most of us (including myself) vote for the political party we want to form a Government and run the country. I know many individuals who are not motivated enough to read through the manifesto of each political party. I have therefore decided to make a brief description of my findings on the business related areas of some of the manifestos. For me, areas such as taxation, regulation and trade are key areas that will affect my vote. If any of these areas may affect yours, feel free to read on and see what I feel each party has proposed.
Something that struck me straight away was that the first of five challenges highlighted by the Conservative manifesto was “the need for a strong economy”. Whilst all political leaders should understand this need, it was pleasing to see this highlighted early on. In terms of tax, the Conservatives promise to increase the tax free allowance to £12,500 from £11,500. They are committed to raising the lower threshold for the higher rate of income tax to £50,000. In terms of corporation tax, the Conservative manifesto claims that their target of 17% by 2020 will be the lowest rate of any developed economy. Low rates of corporation tax are likely to increase investment into the UK, whilst creating more jobs. The manifesto highlights the complexity of the current tax system. They promise to simplify the system, making it easier for those running smaller businesses to sort out their own tax rather than using accountants.
After leaving the EU, the Conservative party believe that they will re-form ‘free-trade’ deals with EU member states, as well as forming new trade deals with countries outside of the European Union. In April 2017, the EU commissioner for trade stated that the EU will reach an agreement involving free trade with the UK. Free-trade deals with EU countries, as well as favourable deals with other nations would be extremely beneficial for the United Kingdom. I should express, however, my reservations on our ability to secure deals as favourable as the Conservative party are talking of.
Traditionally, the Conservative Party have been the party of business. However, this manifesto strongly considers the employee and what a Government led by Theresa May could do for them. They are committed to raising the national living wage to 60% of median earnings by 2020. For business owners this could decrease financial flexibility and see troublesome times if the economy goes into decline. Recently the issue of ‘bogus-self-employment’ (which has seen individuals losing their entitlement to things such as holiday pay and pensions) has been widely spoken about. It is therefore no surprise that the Conservative manifesto promises to protect the rights of all workers. Public limited companies would be obliged to appoint a regular employee as a director, or have a board of employees who would have influence over the board of directors.
Other policies that stood out to me when reading this manifesto included:
- A commitment to meet the Organisation for Economic Co-operation and Development’s average of 2.4% of Gross Domestic Product being spent on research and development.
- A commitment to business rate relief and low taxation for small businesses, as well as aiming for 33% of all central Government purchasing to be purchased from Small-Medium enterprises.
It is no surprise that the business elements of the Green Party manifesto are centred towards what they think is fair for all individuals. Arguably one of the most significant (and striking) policies that the Green party have put forward is the four day working week. The argument for this adaptation to the working week, where there would be a cap of 35 working hours, is that it will improve motivation; it is possible to argue that it promotes the sense of ‘when people are in work, they are at work’. As well as this, those in favour of the shorter working week state that it increases mental health and reduces stress. Further looking to increase fairness for employees, the Green party pledge to increase the national minimum wage to £10 per hour within the next three years. Whilst the Conservatives pledge to protect worker rights, the Green party make an explicit promise to abolish zero hour contracts in their manifesto. Promoting equality, the Green’s manifesto states that under their Government, public limited companies would be required to ensure that a minimum of 40% of all of their boards are women.
In terms of taxation, I would argue that the Green party manifesto is less clear on their exact proposals than the other political parties. One thing that I did take was the inclusion of a wealth tax on the top 1% of earners. Most would argue that this would result in further funding for other areas through making the wealthiest people pay their fair share of tax. However, an alternative view is that this may discourage high earners from coming to the United Kingdom due to the fear of losing more of their income through tax than they would elsewhere.
For me, Business and the Economy are not two of the most important areas for the Green party. I feel it would be an insult (as well as incorrect) to say they have not covered them in their manifesto, but their economic and business-related plans were not as clear-cut for me as some of the other parties.
Labours mission is to create an economy that works for all. In terms of taxation, they will guarantee no income tax rises for those earning below £80,000. They plan to raise the rate of income tax for those earning more than £80,000 a year to 45%, whilst introducing a new rate of 50% for those earning above £123,000. These policies show Labour’s plan to tax the wealthiest in order to fund other services, but not change the taxation of those who earn less than £80,000 a year. A Labour Government, led by Corbyn would raise the top rate of corporation tax to 26%. Owners of large corporations may be disgruntled at this, but the Labour manifesto argues that even at this level UK corporation tax would still be amongst the lowest of major developed economies. Labour seek to protect small businesses by reintroducing the lower small profits rate of corporation tax; it was not clear to me the rate at which this tax would be paid.
Small businesses, as well as research and development are clear themes in the business and economic section of Labour’s manifesto. They pledge to drive innovation in the nation by setting the target of having the highest proportion of high skilled jobs in the Organisation for Economic Co-operation and Development (OECD) by 2030. They also pledge, like the Conservative Party, to meet targets set by OECD regarding the percentage of Gross Domestic Product spent on research and development.
A labour Government would follow the pattern set by countries such as Germany and set up a national investment bank. They claim that this bank would provide investment to smaller companies (whilst private banks are often hesitant), whilst allowing for long-term investments to allow businesses to invest in research and development without having to consider the need to pay back their debts in the short term. For me, the idea of a national investment bank is an extremely positive thing. Businesses in the UK struggle to research and develop their products as well as carry out programmes such as training their workforce. A big reason for this is the lack of a long-term relationship between the company and their investors.
The Liberal Democrat manifesto claims that their Government would build an economy that would work for the long-term and embody what they stand for: prosperity and fairness. The Lib-Dems would increase income tax by 1% at all levels. Whilst as individuals this would result in less money in our pockets, the Liberal Democrats highlight that it is worth it as this extra funding would be used to improve the NHS. For the tax that businesses pay, the plan of the Lib-Dems is less attractive from the point of view of business owners; under their government, corporation tax would be set at 20%, rather than the 17% put forward in the Conservative Manifesto.
As with the other political parties, the Lib-Dems have clearly seen the need to appeal to small firms. They want to create a new ‘start up allowance’ to help those starting a new business to survive in the often rocky early stages of business life. They also stated that small firms would be the priority in any future business tax cuts under a Liberal Democrat Government. It is no surprise to see the Liberal Democrat manifesto attempting to make the opportunity of starting up and running a business available to all.
Many young voters may be interested in the proposals put forward by parties on apprenticeships. From my research, it was clear that the Liberal Democrats were clearly the hottest party on this topic. They highlighted their intentions to develop the skilled workforce needed to support economic growth with a push for high-quality apprenticeships. One views this as a positive intention, as I personally know several individuals who were dissatisfied in the quality of their apprenticeship and felt it did not increase their skills significantly.
It is no surprise, given the parties liberalist stance, that the manifesto shows a clear commitment to ensuring that people are being paid the living wage; they state that they will force larger companies to publish the numbers of employees who are being paid less than the living wage. The party will create a formal right to request a fixed contract and introduce the right to a fixed contract after a specific period of time; they will do so to attempt to stop the abuse of zero hour contracts.
In terms of tax, UKIP would raise the tax free allowance to £13,500 from the current £11,500. They would cut the tax paid by ‘middle earners’ and cut VAT on household bills. Their manifesto states that there would be no tax rises under a UKIP Government. The 40% income tax bracket lower threshold would be increased from £45,000 to £55,000 meaning those who fall in between these two figures will now pay less tax.
Just like other parties, UKIP have attempted to attract voters who may be stakeholders in small-medium enterprises. They propose policies such as regulating the payments made by large to small companies and have vowed to ensure that late payments due to abuse of power are penalised. They would also ensure that those who are self-employed are not required by law to file quarterly tax returns, making the running of business simpler.
It is no surprise that a significant part of the UKIP manifesto was supporting the UK worker and those who are unemployed in the United Kingdom. They propose legislation that states that UK businesses must offer jobs to those unemployed in the United Kingdom before advertising vacancies abroad.
Other significant policies put forward by UKIP in their manifesto include: severely limiting the use of zero hour contracts, forming trade agreements with countries both inside and outside of the European Union that will favour the United Kingdom.
Who should you vote for?
Firstly, you should vote! Voter turnout is extremely low and this needs to change. In terms of who you should vote for, you should come to that decision yourself. Whatever the most important policy area (Brexit, housing etc.) is for you, each party’s stance should allow you to come to a decision on who you think is best suited to run our country. My personal prediction is that this election will see the United Kingdom becoming a ‘two-party’ system once again, with the Conservatives gaining much of the former UKIP vote and Labour gaining Liberal Democrat voters who would rather Corbyn than May. In terms of their business related policies, the difference between the big two that stands out to me is their stance on Corporation tax. Theresa May and the Conservative party would lower the rate further in the hope this will attract further investment and create more jobs. Corbyn and the Labour party would raise corporation tax, at least for the larger companies; which would create more funding for other services such as the NHS.
Once again, please go out and vote. This election is (in my lifetime at least) the most important general election in terms of the future of the United Kingdom.
Thanks for reading,