Following one of the longest pre-election campaigns on record, the main parties are competing with each other to present themselves as being hardest on excessive regulation. Gordon Brown has already agreed to slash the number of government inspectorates and regulatory bodies from 35 to nine and to lay off thousands of civil servants.
The Conservatives have promised to end the practice of ‘gold plating’ EU legislation. If elected, they would also slash the size of the DTI and scrap the Small Business Service.
The Liberal Democrats have pledged to abolish the DTI, liberate regional development agencies from control by Whitehall, and give the chief secretary to the Treasury a new remit to represent the business sector within the cabinet.
On tax, Labour’s campaign is seeking to capitalise on the chancellor’s reputation as being a ‘safe pair of hands’. The Tories, however, claim they would save £12bn a year by 2007/08 by cutting bureaucracy. The money saved would be used partly to avoid the need to borrow and partly to enable them to reduce taxes.
The Lib Dems have promised to make the tax system simpler and fairer. But they are the only one of the three main parties to argue for tax increases. If elected, they would bring in a new 50p income tax rate for those earning over £100,000, which they would use in part to abolish student tuition and top-up fees.
In relation to pensions, Labour is ruling out any firm policy plans on pension provision until after the independent Pension Commission reports in October. Individuals who choose to stay on at work past 65 will benefit from higher state pensions.
The Tories have promised to raise the basic state pension in line with earnings and would introduce a new concept of a ‘lifetime savings account’, in which funds would not be locked away until retirement. Under this scheme, their government would match individuals’ contributions pound for pound.
A Lib Dem government would also raise the basic state pension in line with earnings and would promote what they call a ‘flexible decade of retirement’ in which arbitrary retirement ages were scrapped.
If re-elected, Labour would continue to attach a high priority to employee rights in the workplace. The minimum wage would continue to rise and Labour’s policy of encouraging flexible working practices would be extended. The requirement for employers to set up statutory information and consultation procedures with their workforces will spread to businesses with 50 employees by 2008.
Although the Conservatives strongly opposed the idea of the minimum wage in the 1990s, they now have no plans to drop it, though they have promised to abolish the new statutory dismissal procedures brought in last year.
The Lib Dems have joined the rush to be family friendly by promising to fix maternity pay at £170 per week for six months.
John Davies is head of business law at ACCA
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