General Election 2010: a hung Parliament
With no party capable of commanding an overall majority in the House of Commons, here is a brief recapitulation of what each of the main parties has promised on business, tax and the economy.
How many of these policies are actually implemented may well depend on the constitutional and political arrangements that are made over the coming days.
The Conservatives have pledged to drop the government’s planned 1 per cent rise in national insurance contributions for those earning less than £35,000 annually.
For the first two years of the next government, new businesses would be exempt from paying national insurance on the first ten employees they hire during the first year.
Large company corporation tax would be cut to 25 per cent and that for small companies to 20 per cent, a move to be funded by the withdrawal of R&D tax credits for larger companies.
Under a Conservative government, the inheritance tax threshold would climb to £1 million, and stamp duty would be removed from sales of properties worth less than £250,000.
The date at which the qualification age for the state pension rises to 66 would be brought forward but not sooner than 2016 for men and 2020 for women.
Tax credits for families with incomes above £50,000 would be scrapped.
The government’s present portfolio of employment programmes would be dovetailed into just one scheme, with much greater private sector involvement in providing its services.
The administrative requirements of pitching for government contracts would be simplified for SMEs.
Public spending cuts would begin immediately, with £6 billion to be made in 2010.
The Conservatives have said they would aim to remove most of the UK’s structural budget deficit within five years.
In 2011, public sector pay would be frozen for one year for all but the million lowest paid employees, and civil service costs would be reduced by a third over the course of the next Parliament.
An independent Office for Budget Responsibility would monitor the state of public finances.
With a new top rate of income tax at 50p for those earning more than £150,000 already in place, Labour, if it is returned to office, will also be raising national insurance contributions by 1 per cent in April 2011.
However, the party has promised not to raise income tax further, at either the basic, higher or new top rates, or to extend VAT charges to food, children’s clothes, books or public transport.
There would be no stamp duty for first-time buyers on houses valued at £250,000 or below for two years, the exemption to be paid for by a 5 per cent stamp duty charge on properties worth more than £1 million.
As from 2012, the link between the basic state pension and earnings would be re-established.
The capital investment allowance of £100,000 would stay in place and in future be linked to inflation.
A £4 billion growth fund will be established to provide firms with investments, the money coming from both the government and the private sector. Business support programmes, such as the Enterprise Finance Guarantee Scheme, would continue, along with sustained backing for the Regional Development Agencies.
The national minimum wage would rise, at its basic, in line with increases in average earnings up to 2015.
For young people, there would be a guarantee employment or training for those who have been out of work for six months or more, and a guaranteed job placement for those unemployed for more than two years.
The threshold of support for company takeovers would be increased to two-thirds of shareholders.
On transport, Labour would invest in building a new high-speed rail link between the north and the south, in improving commuter train services and in supporting a third runway at Heathrow.
Public spending would continue to rise during the first year of the next Parliament before a series of cuts would be introduced, the aim being to reduce the deficit by at least half by 2014 and to reduce the structural deficit by at least two-thirds over the course of the next Parliament.
Between April 2011 and April 2013, Labour is committed to £11 billion of efficiency savings, of which all but £300 million has been identified by Whitehall departments, according to the Institute of Fiscal Studies.
A 1 per cent ceiling would be imposed on public sector pay rises for 2011-12 and 2012-13.
A Liberal Democrat government would increase the personal allowance threshold for income tax to £10,000.
Capital gains tax would see a rise to align it with income tax.
A ‘mansion tax’ would apply to properties worth £2 million or more.
Taxpayers would only be permitted to claim non-domiciled tax status for a shortened period of seven years.
The link between the basic state pension and earnings would be re-established.
Tax relief on pensions would only be available at the basic rate.
Over £3 billion would be directed to a one-year green stimulus package, the aim of which would be to boost low carbon industries and to create 100,000 new jobs.
The young person’s minimum wage would be increased by 20 per cent.
The Liberal Democrats would end the practice of gold-plating EU employment regulations.
Business rates would be reformed so that they are calculated according to site rather than rental values.
Regulators would be obliged to take the public interest into account when evaluating large take-over bids.
The Liberal Democrats have promised to make public spending cuts of £15 billion a year, focusing on low priority areas, and to reduce the structural deficit at least by two-thirds by 2015.
A £400 cap would be introduced for public sector pay rises for a limited time.