What your general election vote could mean for your finances: SIMON LAMBERT

By: dailymail Posted On: July 04, 2024 View: 417

Updated: 04:55 EDT, 4 July 2024

After a great deal of huffing and puffing, Britain drags itself over the general election line today.

No party has proved particularly inspiring. Campaigns have often been about what parties won’t rather than will do – and there’s a strong feeling that what comes next hinges as much on what politicians aren’t willing to say as will say.

It was painful to watch but, nonetheless, we’ve made it through and the next round of life in Britain beckons.

It’s a bit like watching last Sunday’s tortuous England match but without the touch of genius and visceral thrill of Jude Bellingham’s overhead goal.

The candidates: They want your vote but what are they promising your finances?

This is Money has long taken a politically neutral stance. Our job is to tell you what’s going on in the world and explain what it means for your finances.

You obviously can’t ignore politics when doing that, but we feel our job is also to hold politicians and governments to account, whatever their hue.

It’s important too to consider ideas across the spectrum too – often good ones can from unlikely quarters.

It’s never more vital to do that than when an election rolls round.

This is our chance to have a say on how we want the economy and our finances to be shaped over the next five years.

So, before you vote today – if you haven’t ticked your box already – have a read of our analysis of the manifestos and give our manifesto special podcast a listen back.

> What the Labour manifesto means for your finances

> What the Tory manifesto means for your finances

> What the Lib Dem manifesto means for your finances

> This is Money podcast – election manifesto special

The This is Money team dug into what the main parties are promising for our finances - and what they chose not to mention.

We also looked at the Green and Reform manifestos to see if they had any decent ideas.

And with polling day approaching, we asked investing experts what the election result could mean for investors.

My overall view on the election campaign is that it has been disappointing.

Neither the Conservatives or Labour - the two parties with a genuine opportunity to win power - have been entirely honest with us, or offered a creative vision of how we get Britain back on the up.

Neither party has been entirely honest or offered a creative vision of how we get Britain back on the up

Even when a party has come up with a suggestion of doing something, there is scant detail.

Labour’s planning shake-up and desire to get building contains little depth on how to avoid this simply being a charter for big housebuilders to make out like bandits, while selling low quality new homes at premium prices and building on the countryside.

Expensive promises have been made, along with either pledges to cut taxes we can’t afford to cut – the Tories with NI – or claims they won’t put certain tax rates up – as Labour has – even as they intend to stealth tax more out of us.

Meanwhile, no party has promised to fix the counter-productive mess that our tax system is in – and there are fears that some form of tax raid on wealth, in the form of capital gains, pensions, inheritance or something else, is on the way to plug the gap.

The Institute for Fiscal Studies has been very blunt on tax and spending, dubbing it a ‘conspiracy of silence’, stating that we either need to increase taxes or cut public spending over the next parliament and saying the manifestos don’t add up.

There is another way forward though: to grow the economy in a much better way.

This leads to my greatest election disappointment, a lack of inspiration and the message that a government can lay the groundwork for growth but it’s up to individuals and businesses to take advantage and deliver it.

Whatever the outcome of the election – and barring a real shock, I think we can all guess it – This is Money will be here to help you understand what it means for your finances.

Tomorrow, over the weekend, and in the coming weeks and months, we will be explaining what you need to do and how to protect and grow your wealth.

What the main parties say on tax and the economy

Conservatives

The Conservative Party is keen to paint itself as the party of lower taxes but its record in recent years undermines that.

It has cut national insurance, but frozen tax thresholds mean people pay more tax and drag more into higher rate bands.

The Tories say they will continue to cut NI, taking another 2p off the rate and removing it altogether for the self-employed.

The triple lock plus will mean people don’t pay tax on state pensions as they rise in line with inflation, earnings or at least 2.5 per cent and no more new taxes will be brought in on pensions.

First-time buyers would see the stamp duty threshold permanently raised to £425,000 under the Tories – a level it is temporarily at now – and the child benefit removal threshold will be calculated on household earnings and raised to £120,000.

The Tories won’t fix any of the tax traps in the system, such as the 60 per cent rate caused by removing the personal allowance or reverse some of their own tax raids.

Jeremy Hunt has slashed the capital gains allowance from £12,300 to £3,000 and the dividend allowance from £2,000 to £500 and kept Isa and personal savings allowance limits frozen.

Tax cuts will be funded by a crackdown on tax avoidance and reducing the welfare bill, say the Conservatives, who will stick to Hunt’s rule to get debt falling in the fifth year of forecasts.

The IFS says the Tories cost savings are overly ambitious and with a promised increase in defence spending, balancing the books without cutting core spending would be very difficult.

Labour

There are a lot of questions for Labour on the economy and tax, but it seems very keen not to provide the answers before people go to the polls.

Labour has promised not to raise the rates of income tax, national insurance or VAT but intends to stick by the frozen thresholds that increase people’s tax bills.

There are concerns that having made this pledge, Labour will need to turn to other taxes to raise revenue, such as capital gains tax, inheritance tax, council tax, or cutting back on pension tax reliefs.

It will cap corporation tax at 25 per cent, reform business rates and impose 20 per cent VAT on private school fees. It will stick with the state pension triple lock.

Labour says it wants to prioritise wealth creation and economic growth and plans a housebuilding boom and reform of planning rules, which will include building on the green belt.

It says: ‘Our fiscal rules are non-negotiable and will apply to every decision taken by a Labour government. This means that the current budget must move into balance, so that day-to-day costs are met by revenues and debt must be falling as a share of the economy by the fifth year of the forecast.’

The five-year fiscal rule is the same as Jeremy Hunt's and the IFS has said that without raising taxes or cutting spending, this will be nigh on impossible to achieve.

Election Money

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