Poll positions: what the parties mean for industry

By Adam Bernstein, Monday 05 June 2017

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For the second time in two years the electorate is being asked to decide the shape of government. While some think Theresa May is lacklustre and grey, she certainly knows how to throw the cat among the pigeons.

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Some say the election is a cynical plot to gain a distinct advantage over rivals when Labour is in clear disarray and headed up by a divisive leader. Others suggest, as May herself has said, that she wants a “strong and stable” mandate as she negotiates the UK’s exit from the European Union. May’s policies are certainly a move away from run-of-the-mill Conservatism. In fact, some commentators have suggested that the manifesto isn’t so much blue as it is red. Other commentators have suggested that the Conservative manifesto has been written from the standpoint that they’ve already won.

What will be particularly interesting is to see how the other parties’ various gambits play out. Is the Libdem ploy of targeting the younger voter going to get them back into the Commons, en masse? Some are sceptical considering that the younger voter is less likely to vote – at all – compared with the older elector. Is Labour still in disarray? Former minister Ben Bradshaw recently suggested that the campaign wasn’t so much about a Labour win as it was about stopping the Conservatives gaining a huge majority. Meanwhile, Unite general secretary Len McCluskey flipped position within hours from projecting a Labour loss to a Corbyn win.

One thing is certain, choosing the right party is not simple. The parties’ manifestos set out the basic promises, but there’s not much detail to be gleaned – and how election promises are to be funded is entirely open to speculation. In an ideal world, we’d vote for a candidate (remember – we don’t vote for a party as such) based on cherry-picked wishes.

Liberal Democrats

Despite the UK improving economic performance, the Liberal Democrats – Libdems – are particularly concerned with the government’s hard stance on Brexit; they want to ensure the UK can access the single market and seek to maintain freedom of movement. They say that leaving the EU will cause significant damage to the economy and investment in R&D, partly because of the loss of European Investment Fund financing. On immigration, the party is not a fan of fixed immigration numbers.

The Libdems want government to train workers and young people to exploit the new technologies opened up by ‘Industry 4.0’, in which technology is changing the nature of employment. Their policies include a skills strategy involving education from school to university, a new T-Level, and an expansion of the Apprenticeship Levy.

‘Green growth’, as the Libdems term it, would be fast-tracked to incentivise firms to become ever more efficient. They see huge growth potential for revenue and employment in low-carbon industries.

In terms of SMEs, they’d expand the British Business Bank and support for medium-sized firms while also creating a ‘start-up allowance’ that would fund the early days of a new business.

On finance, party policy would help businesses access capital. On corporate governance, policy would give shareholders a greater voice in terms of executive remuneration. And on taxation, the Libdems would level the tax playing field so that multinationals pay on the same basis as smaller organisations. They would investigate a “fairer and more equitable” means of taxing small businesses while reviewing the operation of business rates. Income Tax would also rise by 1p to fund health service investment, Corporation Tax would rise to 20%, and capital gains tax and inheritance tax changes would be reversed.

With £100bn being spent on infrastructure it’s a key part of policy. The Libdems want greater access to fast broadband for all by 2020 and resilience in energy supply. Road and rail would also see significant investment.

The party believes that every government should support regional and employment diversity. Libdem policy would encourage local authorities and Local Enterprise Partnerships to work together. They say that firms above a size threshold should give employees the right to request a share in a company and be represented on the board. They want a review of employment rights as the lines between employment and self-employed have been blurred; they also want firms to consider employee welfare, environmental standards and ethical practice when making decisions. Libdems would also introduce mandatory ethnicity pay gap reporting for organisations with 250 or more staff.

Conservative

Being the party of government means that most Conservative policies are more readily discernable.

On taxation, the plan to increase the personal allowance to £12,500 by 2020 and increase the higher rate tax threshold to £45,000 (£50,000 by 2020) stays. Corporation Tax fell in April to 19% and will fall to 17% by 2020. However, a Tory government would still push HMRC to bring in its Making Tax Digital regime which will greatly increase the administrative and reporting burden for businesses.

The Conservatives are concerned about the rise of the ‘gig economy’ and its first move to combat the loss of tax revenue came in April 2016 as dividends above £5,000 were to be taxed separately. That allowance was further attacked in the March budget with a lowering of the £5,000 threshold to £2,000. The u-turn over National Insurance increases may be temporary – the chancellor has said that the Autumn Statement would announce how the government would recoup monies lost over the u-turn. (It’s interesting to note that The Telegraph reported that Philip Hammond could be dropped as chancellor). A rise in the VAT rate has been ruled out but Income Tax and National Insurance rises have not been dismissed. The party also plans new powers for HMRC to reduce online VAT fraud while further simplifying the tax system.

When it comes to a post-Brexit UK, a Conservative government would aim to replicate EU free trade agreement while creating a network of overseas trade commissioners to boost trade. EU laws will be converted into UK law. 

The Conservatives also want to update rules on mergers, acquisitions and takeovers, make executive pay subject to an annual vote, and reduce overall government bureaucracy.

On business rates the government has offered some respite to hard pressed ratepayers. The manifesto suggests more frequent revaluations.

The party plans to cut net immigration to under 100,000 while charging employers taking on non-EU workers. Further, the party plans to increase the National Living Wage to 60% median earnings by 2020, offer protections to those in the “gig” economy, put workers on boards, and extend Equalities Act protection to those with mental health conditions.

Lastly, the party wants to give more powers to regulators who oversee consumer markets and make further reforms in areas such as energy provision and lending. There would also be more development in the use of digital signatures, digital cancellation and digital proof of identification – with a greater rollout of fibre connections, especially to businesses.

Labour

As PrintWeek went to press Labour had gained ground on the Tories, with the Conservatives’ lead down to single figures, according to the latest polls. Labour has a number of notable policies, including a £250bn investment in infrastructure and industries of the future; making businesses with more than 21 staff publish pay audits; 2 million new skilled manufacturing jobs; a “full” living wage; the reintroduction of a 50p top rate of income tax for earnings over £150,000; and the reversal of corporation tax cuts – 26% for larger firms and a reinstatement of the 21% rate for SMEs with profits of up to £300,000.

Labour wants to invest in housing, energy, transport and digital projects. It thinks that the railways should be brought under public control and opposes HS2.

On Brexit, a second referendum is not supported, and the party accepts the principle of free movement of people, and will not let the UK leave the EU without a deal. 

And on wealth, the party will increase taxes on the “rich”. The defining income is £80,000 where the tax rate will rise to 45p and 50p for those on more than £123,000. The party wants a 2.5% surcharge on firms paying people more than £330,000 and would reverse capital gains tax cuts. Labour would also stop HMRC’s quarterly reporting regime for those businesses with a turnover under £85,000.

The party’s manifesto calls for a Fiscal Credibility Rule that commits Labour to a plan to eliminate a spending deficit “on a forward-looking, five-year rolling timescale.” There should also be a Tax Transparency and Enforcement Programme, to tackle the problem of tax evasion and aggressive tax avoidance.

Labour would raise the living wage to £10 an hour, give all workers equal rights, ban zero-hours contracts, guarantee trade unions a right to access workplaces, ban unpaid internships, abolish employment tribunal fees, and increase and extend paternity pay. It will maintain the Apprenticeship Levy and employers will be penalised for ignoring their responsibilities. Labour also wants a greater role for the workforce in corporate management.

Labour would move to tackle the taxation of new plant and machinery to remove a disincentive on investment and innovation and would review business rates. It also wants a strategy to help the country with Industry 4.0 and the growing spread of information technology. Finally, the party will seek to boost R&D spending.

Votes matter

So, will Theresa May succeed in her plan for a larger majority and a fresh mandate? Will Jeremy Corbyn frustrate the naysayers? Can Tim Farron win back some centre ground? Only we can decide. One thing is certain, those that don’t vote (or spoil their ballot) have no right to complain. 

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