General election update: parties launch their manifestos

The election campaign is now in full swing. The historic first television debates have begun and, on 12 April, Parliament was officially dissolved – meaning that MPs are now in fact, former MPs.

It has been an eventful week all round, with the continuing spat about National Insurance taking up much of the leaders’ time. Many commentators have suggested that this has been to the detriment of both Labour and the Liberal Democrats, who have struggled to make their proposals heard over the row.

The polls continue to fluctuate, with large discrepancies common between polling organisations. According to many surveys the first television debate dealt a hammer-blow to the Conservative campaign, with many viewers suggesting that David Cameron performed poorly. Nick Clegg, on the other hand, was widely seen to have come out on top – indeed, one poll of viewers recorded a 14 point swing to the Lib Dems.

But the most important event of the week for voters was the manifesto launches. The three main parties presented their proposals over three consecutive days, each in very distinctive surroundings. So what do these proposals mean for UK businesses?

Labour

Labour chose to launch their manifesto in the lobby of a hospital. The building was full of Labour loyalists, some of whom reacted angrily to what they saw as aggressive questioning from the press.

Tax and employment

The Labour manifesto promises to keep all three rates of income tax at their current levels for the duration of the next Parliament. But there was no clear pledge not to raise VAT.

Fathers will be given a month of paid leave, which can be taken on an ad hoc basis, in addition to the changes to paternity leave brought in on 6 April.

There will be no Council Tax revaluation during the coming Parliament.

The plan for the abolition of stamp duty on first-time purchases up to £250,000 was reiterated. This will be paid for by an increase in stamp duty to 5 per cent for homes worth more than £1 million.

Business support

A pledge to help British industry create 1 million more skilled positions, while continuing to develop a high-tech, green economy.

A range of infrastructure modernisation plans, including development of the transport and digital networks.

Conservatives

The Conservative launch took place in Battersea power station. Clearly chosen for its symbolism, the power station is the site of a major forthcoming development project.

Tax and employment

The Tories promised a cut in corporation tax from 22p to 20p, along with a reduction in employer’s NI for the first 10 employees. They also pledged an increase in the Inheritance Tax threshold to £1 million.

Many commentators have suggested that these tax cuts would have to be funded by tax rises elsewhere. The Conservatives have said the corporation tax cut will be funded by reducing tax relief’s and allowances. There was no pledge not to increase the rates of Income Tax.

Business support

A simplification of the tax system, although it is unclear which elements will be addressed.
The promise of a new loan scheme for entrepreneurs – although again, the details are yet to be fleshed out.

An extension of the apprenticeship scheme, including a £2,000 payment to small businesses for each apprentice they take on.

Liberal Democrats

The Liberal Democrats avoided the drama of the previous two manifesto launches, preferring a low-key event with relatively few speeches from front-benchers.

Tax and employment

The Lib Dems reiterated their plan to raise the income tax threshold to £10,000.

They pledged to increase the rate of Capital Gains Tax to bring it in line with income tax – which is likely to be very unpopular with contractors trying to avoid IR35.

They also suggested that Council Tax may be scrapped in favour of a local income tax.

Business support

A promise to cut red tape for businesses – but, as with the Conservatives, these plans are as yet unspecified.

A pledge to provide SMEs with the option to be taxed on cashflow rather than income. The establishment of a new arm of the Office of Fair Trading, charged with investigating supermarkets and other retailers that move into towns and villages at the expense of independent firms.

While there is significant variation between individual policies, there seems to be consensus among the three main parties that UK businesses need more support. Aside from their macro-economic proposals, each of the parties laid out their intentions to provide targeted help to viable businesses.

But it is important to remember that any such help must be paid for. It seems likely that the coming weeks will see a bitter battle as the party leaders continue to pick holes in each other’s figures, in an effort to show that the country cannot afford their opponents’ plans.

Need some help deciding where to place your vote?

We will be giving a run-down of each party’s business and small business manifesto, along with some information on voting, over the course of the next two weeks, so stay tuned.

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