If there’s one thing the main parties have been criticised for, it is producing manifestos that all sound alike.
The language and terms seem the same, policies seem similar. There is a lack, apparently, of the ‘clear blue water’ which politicians are so fond of talking about.
Manifestos are supposed to be declarations of intentions, policy promises for implementation should the eager party be elected.
But not everything in manifestos goes on to be policy and certainly government policies appear after an election that were never even hinted at in the party manifesto. For example, possibly the most significant economic policy of Labour’s term in office – giving the Bank of England independence to change interest rates. Touted, but not declared.
So the question is always which of the manifesto pledges will find itself on the legislative agenda and what little gems are lurking in the background, hidden, but ready for launch as soon as the election is won?
Surprisingly there has been little speculation around secret intentions in the campaign, which, despite John Prescott’s fisticuffs, is turning into one of the most mundane in electoral history.
Oliver Letwin, on the shadow Treasury team, let slip that Tory plans were for #20bn in tax cuts and not the stated #8bn, less than one percent of GDP, but apart from that there have been few revelations.
Accountancy Age has given the main parties the chance to state their policies for the economy and business.
As in the main campaign, tax – restructuring the system, reducing the burden, getting rid of some and changing others – figures as a central plank of policy.
It is up to you to decide who has the edge.
THE LABOUR PARTY
This government’s objective is to build a Britain of opportunity for all. A vibrant, enterprising economy is fundamental to that mission.
And the financial services industry, one of Britain’s most competitive sectors, is essential to our future prosperity.
The most important contribution government can make to business is to provide macroeconomic stability. When we came to power in 1997, inflationary pressures were mounting and the UK economy was on the verge of returning to the old boom and bust. Since then our challenge has been both to lock in that stability and promote reforms to foster growth.
Our Competition Act has introduced one of the most pro-competition policies in the world. For banking and financial services, the Financial Services Authority is now, for the first time, required to facilitate competition – with a new scrutiny role for the competition authorities. A higher degree of enterprise calls for higher levels of investment and entrepreneurship.
That requires the right tax environment. Corporation tax has been cut from 33p to 30p for large companies, and from 23p to 20p for medium-sized firms. To encourage and reward new business investment, we have cut the long-term rate of capital gains tax from 40p to 10p.
The government has been particularly active in fostering the venture capital industry – the largest in Europe. British venture-backed growth companies are proven job-creators. To help institutional investors invest in early-stage VC, we are taking forward a UK high-technology fund and nine regional venture capital funds to invest in early-stage high growth businesses which have historically found it difficult to raise finance.
The government’s positive engagement in Europe has made sure London remains its finance capital. Our approach to the single currency is based on Britain’s national economic interest, not dogma. And by pressing for economic reforms in Europe we have ensured Britain is at the heart of the growing financial services market in Europe.
The choice at this election is clear: between a government committed to fostering enterprise, investment and stable growth and a Tory party whose irresponsible approach to the public finances would send us right back to the bad old days of boom and bust.
– Stephen Timms, financial secretary to the Treasury
THE CONSERVATIVE PARTY
This election campaign is in danger of becoming a contest between competing public expenditure plans. But the only money that governments have is what they extract in taxes from businesses and employees.
The lesson that Labour has still not learnt is that a world class economy requires a low burden of tax and red tape.
Instead the government is trying to ‘converge’ in the European Union model of high business taxation and regulation. It is no coincidence that during the past four years Britain has slipped down the international competitiveness league table, from 4th to 9th place.
These figures do not include the effect of the #1bn climate change levy, which is complex and anti-competitive.
Meanwhile the tax system gets more and more complicated – which is good news for accountants such as myself I suppose, but bad news for businesses trying to cope with a bewildering array of reliefs, penalties, tapers and credits.
The working family tax credit makes every business a social security office and a tax collection office. This needs action, and soon.
We will have a business-led, independent Deregulation Commission with the power to block proposals and refer them back to parliament for separate debate and vote.
Regulatory costs will be independently calculated. Each government department will have to reduce its regulatory burden year by year. The climate change levy will go. So will IR35, which could only have come from a government with no business experience.
The DTI, which has grown by 53% since 1997, will be pruned back hard to pay for cuts in business taxes. These will include a #200m a year cut in small business rates. Our 6p per litre reduction in petrol and diesel tax will start to reverse Labour’s crazy policy of making our fuel the most expensive in Europe.
And we will keep control over economic policy. That means keeping the pound, which will also save businesses the #36bn cost of converting to the euro.
– David Heathcoat-Amory, shadow secretary of state for Trade & Industry
THE LIBERAL DEMOCRATS
Liberal Democrats in Finance Bill and economy debates throughout the last Parliament led the argument for reducing such complexity.
While our most well-known tax policies at this election are for some modest tax increases to fund spending, we are also campaigning for major reform to undo the damaging legacy of Gordon Brown’s tinkering.
Britain’s economy is in many ways at its most robust in decades. Independence for the Bank of England – long advocated by the Liberal Democrats alone – has been a major contributor to greater macro-economic stability. Inflation and growth have now been reasonably steady for several years and unemployment continues to fall.
Yet excessive complexity of tax is a serious microeconomic error. The Lib Dems’ key proposal is to change the whole process of passing new tax laws. The present system prevents sensible consultation and scrutiny.
Lib Dems would radically reduce the size of the annual Finance Bill, limiting its contents to the major tax policy changes. All other tax changes would be made through a new legislative process, subject to a long and open consultation process and proposed as infrequently as possible.
Principles of the Tax Law Rewrite Project would be imbedded from the start. The key aim would be to take party politics out of debates about technical matters.
To relieve burdens on business elsewhere Lib Dems have identified 25 areas of legislation that require reform or abolition. We would also replace the working families tax credit with an equivalent payment by DSS so that employers did not have to administer it – saving them around #100m a year.
We would abolish IR35 and allow ‘one person companies’ to function and develop. We would stop abuse by closing the ‘Friday night to Monday morning’ loophole (where people leave work as an employee on Friday and return to do the same job on Monday as a one-person company) by targeted legislation along the lines suggested by the Professional Contractors Group.
Finally we would replace the climate change levy with a carbon tax – on a revenue neutral basis – which would reduce regulatory burdens on employers.
– Edward Davey, Liberal Democrat Treasury spokesman
THE LABOUR PARTY
Gordon Brown – chancellor of the exchequer, 1997- Biography: First elected in 1983 to House of Commons, aged 33. Established a golden reputation by destroying then-chancellor Nigel Lawson in a financial debate in 1988. Seen as a future leader of the Labour Party – could have already made a pact with Blair if the papers are to be believed. Already lives at Number 10. The Blairs moved to Number 11 to accommodate their larger family.
How safe is his seat? (Dunfermline East) Impregnable. If he loses, Britain has a new government. Majority, 18,751.
Position on euro: Cautiously pro-euro. Although his cultural outlook is more American than European, Brown is considered to be an enthusiast for the single currency with a small ‘e’. Despite an ideological empathy with the idea, his pragmatic approach will always mean that the economic imperative will prevail over the political one on this issue.
Is responsible for the government’s current wait-and-see policy. It was his interview with The Times in October 1997 that ruled out moving into the euro for the life of this parliament.
Most significant moments: A rugby injury as a schoolboy left him blind in his left eye. Canvassing in the 1963 General Election, aged 12. Losing the 1994 Labour leadership race to Tony Blair; bringing the phrase neo-classical endogenous growth theory into the public domain.
Ed Balls: Norwich City fan who forms an essential part of Gordon Brown’s Praetorian Guard within the Labour Party’s higher guard. Considerable resentment within Whitehall for being the ‘real chancellor’.
Andrew Smith – chief secretary to the Treasury, 1999 – Biography: First elected to parliament in 1987. Lost the 1983 election to Steve Norris. As a councillor in Oxford he organised an anti-Falklands War committee.
How safe is his seat? (Oxford East) Very safe. Majority of 16,665.
Position on euro: Thought to be the same as Gordon Brown.
Most significant moments: Seen as a very able member, lately responsible for trying to undermine Tory spending proposals. Unfortunately happens to sound like John Major’s younger brother.
Dawn Primarolo – paymaster general, 1999 Treasury, 1999 – Biography: A former secretary with Avon County Council. First elected to parliament in 1987.
How safe is her seat? (Bristol South) Rock solid, 19,328.
Position on euro: Thought to be pro.
Most significant moment: Dropping her old-style ‘Red Dawn’ image to become New Labour. IR35 anyone?
THE CONSERVATIVE PARTY
Michael Portillo – shadow chancellor
Biography: Born in 1953, he went to school with Labour MP Dianne Abbott and admired Harold Wilson as a schoolboy. Studied at Cambridge. Took his first seat at Westminster after the incumbent Sir Anthony Berry was killed by the IRA bomb at the Grand Hotel, Brighton. Consistently strong crusader against high taxation.
How safe is his seat? Very, though expect him to be especially nervous on election night given the events of 1997. MP for the Tory stronghold of Kensington and Chelsea, majority of 9,519.
Position on euro: Ambivalent, though thought to be against. It might become clearer if and when he becomes leader. Has moved from hard right to centre-right in recent years.
Most significant moments: Famously losing his Enfield Southgate seat at the 1997 election. ‘Who Dares Wins speech’ at 1995 Tory Party Conference.
Architect behind the #8bn Tory tax cut programme.
David Heathcoat-Amory – shadow chief secretary to the Treasury, 1997
Biography: A chartered accountant and MP since 1983. Fondly mentioned in Alan Clark’s diaries as an up-and-coming right-winger. Educated at Eton and Oxford.
How safe is his seat? (Wells) Extremely vulnerable. A majority of just 528. Wells is the Liberal Democrats’ second most winnable seat from the Tories, requiring just a 0.5% swing.
Position on euro: Against.
Most significant moments: PPS to Douglas Hurd in the late 1980s.
Oliver Letwin – shadow chief secretary to the Treasury
Biography: Until this campaign few had heard of Letwin. But, now he has been accused of leaking the Tories’ #20bn Tory tax cuts, that has all changed.
A former merchant banker, he has spoken out on deregulation issues since 1998.
How safe is his seat?(West Dorset). Very unsafe. A majority of just 1,840.
Targeted by the Lib Dems as their eighth most winnable seat from the Tories.
A swing of 1.7% needed.
Position on euro: Against.
Most significant moments: Alleged to have leaked Tory tax plans. Subsequently ridiculed on a ‘Wanted’ poster by chancellor Gordon Brown.
THE LIBERAL DEMOCRATS
Matthew Taylor – shadow chancellor
Biography: Grew up in the public spotlight becoming an MP aged just 24 after the death of David Penhaligon.
Adoptive parents were Labour supporters who supported the SDP-split of the early 1980s. His script-writing father adapted Jewel in the Crown and The Camomile Lawn for television.
How safe is his seat? (Truro and St Austell) Very. A majority of 12,501.
Position on euro: Pro.
Most significant moments: The man responsible for the Lib Dems most significant policy, the extra penny on income tax. Some bitterness at not having enough support to succeed Paddy Ashdown as leader.
Ed Davey – treasury spokesman
Biography: MP for Kingston and Surbiton since 1997.
How safe is his seat? The most vulnerable in Westminster.
A majority of just 56 means he will have to rely on tactical voting to survive the Tory challenge.
Position on euro: Pro.
Most significant moments: Helped package current Liberal Democrat finance policy.
Another architect is party insider Rob Blackie described as ‘too young’ to have a past. Probable future MP.
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