News and Insights

FINN PARTNERS GENERAL ELECTION SNAPSHOT – WEEK 2

June 14, 2024

Conservative Party Manifesto

There were a few surprises in the Conservative Party manifesto launched on Tuesday, with National Insurance tax cuts front and centre. However, this was largely a safe set of policies designed to both reinforce support from the Tory right and appeal to the party’s centre. While we don’t think these policies will be enough to swing the campaign, Sunak’s launch can be considered relatively successful – although 2022’s budget has not been forgotten.

The Party wants to show it has something for all its voters. A headline-grabbing national service policy, commitments to end net zero levies, to enforce a triple pension lock, and to legislate that ‘sex means biological sex’ have all been designed to help counter the threat from Reform – a risk predicted to be hugely consequential in last week’s snapshot.

On immigration, while the Rwanda plan was re-stated, the manifesto stopped short of calling for an immediate exit from the European Convention on Human Rights. This may be tactical – any commitment gives Labour a free campaign line – but it does ensure that the Party’s left are not alienated. Security remains a running theme, with a promise to spend 2.5% of the nation’s GDP on defence.

Elsewhere, Sunak reiterated a desire to reduce taxes but warned of the need to act ‘sustainably’ when reducing the individual tax burden. This would be funded by a crackdown on tax avoidance, though the effectiveness of this is disputed, with the tax burden forecast to rise to its highest levels since 1948.

The manifesto also contained commitments to ‘unblock’ 100,000 homes and deliver 1.6 million new houses, alongside a permanent raise to the stamp duty threshold. Changes to the planning system have been designed to reduce sign-off for major infrastructure projects, most notably through the removal of judicial review in select cases.

On health, the Party promises to increase NHS spending above inflation every year, recruiting 92,000 more nurses and 28,000 more doctors. There is also an emphasis on driving productivity and moving care closer to people’s homes through Pharmacy First, new and modernised GP surgeries and more Community Diagnostic Centres. Significantly, there is a focus on prioritising women’s health, following the publication of the Women’s Health Strategy in 2022. However, the promise to fix social care will also be taken less seriously by those who have been waiting a decade for the issue to be addressed.

Labour Party Manifesto

At its heart, Labour’s plan for government focuses on increasing growth which, in turn, will generate more wealth for investment and public finances – without raising taxes. Growth will be achieved through economic stability, reforming planning rules to build 1.5 million new homes, and introducing a new industrial strategy.

Sounds too good to be true? The Institute for Fiscal Studies (IFS) thinks so. In its initial response to the manifesto launched today in Manchester, the IFS argues that on current forecasts and with an extra £17.5 billion borrowing over five years to fund the green prosperity plan, there is no for more spending than planned by the current government:

“Yes, growth could surprise on the upside – and if it does, then the fiscal arithmetic would be easier. But if it doesn’t – and it hasn’t tended to in recent years – then either we will get those cuts or the fiscal targets will be fudged, or taxes will rise.”

So, despite having a “fully costed and fully funded” plan, concerns remain that the Labour Party will not be able to outperform the current government’s performance.

Today’s launch, however, projected the image of the Labour Party as a government in waiting. It was slick and professional, demonstrating the importance of a well-run campaign. Labour has run a tight ship – especially when compared with a Conservative campaign that has seen countless errors of judgement, most notably Rishi Sunak’s debacle at the D-Day celebrations last week.

The Labour Party knows that the NHS is one of its trump cards and frequently plays up its role in both creating and subsequently saving the NHS in previous governments. The manifesto includes commitments to reduce waiting times, a focus on mental health and a dental health rescue plan. Many of these initiatives will land well with voters and there is a promise to transform the NHS app for patients, putting them in control of their own health.

Liberal Democrat Party Manifesto

Designed to appeal to voters in seats where the Liberal Democrats came second to the Conservatives in 2019 and in seats they won in recent by-elections, the manifesto pledges to create a fairer society, with the NHS at its core, in which banks and big tech are taxed as opposed to ‘ordinary people’.

The party is unlikely to end up in government after the next election, so they rightly focus on retaining existing seats and increasing their presence in Parliament by appealing to voters who are socially liberal and fiscally prudent but want to see more wealth redistribution.

According to the IFS, “putting an extra £27 billion into day-to-day public spending represents a meaningful change to current plans. But the vast majority of this spending would be targeted at health, education and defence, alongside increases in the social security budget”.

Unlike the main parties, the Lib Dems are pledging to rejoin the EU Single Market and, in the longer term, the European Union.

A big part of the manifesto is billed as saving the NHS and pledges £8bn for health and care services. The Liberal Democrat’s direct focus on social care is driven by Ed Davey’s personal experience as a carer. However, it has already been pointed out that the funding earmarked for the policy to introduce free personal care may not be sufficient.

POLLS & NEXT PARLIAMENT MAKE-UP

The polls reflect changes in voters’ intention after last week’s announcement that Nigel Farage would run as a candidate in Clacton-on-Sea, with Reform set to be the third party ahead of the Liberal Democrats. Looking ahead, we might expect calls for tactical voting to influence polls in the next week, with the Lib Dems hoping for a points increase as a result.

A new YouGov tracker reveals which stories Britons say they heard about the most over the past week. Interestingly, the disputed £2,000 tax increase from Labour in government hasn’t cut through…

(YouGov)                                                                        (JLP)

MAIN PARTY ANNOUNCEMENTS SECTOR-BY-SECTOR

FINANCIAL SERVICES

CONSERVATIVE PARTY

  • Continue to build on the policies set out in the Edinburgh Reforms so that the UK continues to be the world’s most innovative and competitive financial centre.
  • Support the City of London’s position as the leading global market through the implementation of the Mansion House reforms and measures such as a retail sale of NatWest shares.
  • Improve access to finance for SMEs, including through expanding Open Finance and by exploring the creation of Regional Mutual Banks.
  • Promote digital invoicing and improve enforcement of the Prompt Payment Code to support small businesses with the perennial challenge of cash flow.

LABOUR PARTY

  • Create the conditions to support innovation and growth in the financial services sector by supporting new technology, including Open Banking and Open Finance and ensuring a pro-innovation environment.
  • Ensure a pro-business environment, with a competition and regulatory framework, that supports innovation, investment, and high-quality jobs.
  • Reform of the British Business Bank – including a stronger mandate to support growth in the regions and nations – to make it easier for small and medium-sized enterprises (SMEs) to access capital.
  • Reform of procurement rules to give SMEs greater access to government contracts.
  • Take action on late payments to ensure small businesses and the self-employed are paid on time.
  • Increase investment from pension funds in UK markets.

LIBERAL DEMOCRATS

  • Reintroduce tax for banks and impose a one-off windfall tax on the profits of oil and gas producers and traders.
  • Introduce a 4% tax on the share buyback schemes of FTSE-100 listed companies.
  • Regulate financial services to encourage climate-friendly investments consistent with the Paris Agreement, and create new powers for regulators to act if banks and other investors are not managing climate risks properly.
  • Require pension funds and managers to show that their portfolio investments are consistent with the Paris Agreement.
  • Invest in green infrastructure, innovation and skills to boost economic growth and create jobs, while tackling the climate crisis.

TECHNOLOGY, R&D, INNOVATION

CONSERVATIVE PARTY

  • Increase public spending on R&D to £22bn a year and maintain R&D tax reliefs.
  • Continue investing over £1.5bn in large-scale compute clusters.
  • Scale R&D funding to a minimum of 5% of the defence budget, together with an additional 2% to exploit that R&D through the recently announced Defence Innovation Agency.
  • Create more Freeports and Business Rates Retention zones.
  • Support Investment Zones.

LABOUR PARTY

  • Allocate £1.5 bn to new gigafactories so the UK’s automotive industry leads the world.
  • Allocate £1.8bn to upgrade ports and build supply chains across the UK.
  • Allocate £2.5bn to rebuild the UK’s steel industry.
  • Make a renewed push to fulfil the ambition of full gigabit and national 5G coverage by 2030.
  • Ensure its industrial strategy supports the development of the Artificial Intelligence (AI) sector and removes planning barriers to new datacentres.
  • Create a new Regulatory Innovation Office.
  • Ensure the safe development and use of AI models by introducing binding regulation on the handful of companies developing the most powerful AI models and by banning the creation of sexually explicit deepfakes.

LIBERAL DEMOCRATS

  • Increase the Digital Services Tax on social media firms and other tech giants from 2% to 6%.
  • Establish creative enterprise zones to grow and regenerate the cultural output of areas across the UK.
  • Create a clear, workable and well-resourced cross-sectoral regulatory framework for artificial intelligence.

CONSUMER AND RETAIL

CONSERVATIVE PARTY

  • Toughen sentences for assaults against retail workers.
  • Build on their new UK-wide food security index by putting a UK-wide food security target into law.
  • Commit that all food and drink products imported into the UK, including those from countries the UK has trade agreements with, must comply with the UK’s high standards.
  • Maintain the National Living Wage in each year of the next Parliament at two-thirds of median earnings.

LABOUR PARTY

  • Replace the business rates system, to ensure they raise the same revenue but in a fairer way.
  • Implement ‘Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People’ in full – introducing legislation within 100 days.
  • Create a Single Enforcement Body to ensure employment rights are upheld.
  • Ban advertising junk food to children along with the sale of high-caffeine energy drinks to under-16s.

LIBERAL DEMOCRATS

  • Establish a new Worker Protection Enforcement Authority.
  • Set a 20% higher minimum wage for people on zero-hour contracts at times of normal demand to compensate for the uncertainty of fluctuating hours of work.
  • Abolish business rates and replace them with a Commercial Landowner Levy.
  • Protect children from exposure to junk food by supporting local authorities to restrict outdoor advertising and restricting TV advertising to post-watershed.
  • Providing local authorities with greater powers and resources to inspect and monitor food production.
  • Introducing robust and clear-to-understand food labelling.

HEALTH AND SOCIAL CARE

CONSERVATIVE PARTY

  • Return performance to the levels set out in the NHS Constitution by the end of the next Parliament.
  • Grow opportunities for all types of providers – NHS, charity or independent sector – to offer services free of charge to NHS patients, where these meet NHS costs and standards.
  • Support research into new treatments, including for Parkinson’s and motor neurone disease and secure more commercial clinical trials.
  • Remove bureaucratic obstacles to the use of new medicines, such as the NHS Budget Impact Test and align NHS England’s cost-effectiveness thresholds for new medicines indications with those used by NICE.
  • Implement a new medtech pathway so that cost-effective medtech, including AI, is rapidly adopted throughout
  • Expand coverage of Mental Health Support Teams from 50% to 100% of schools and colleges in England by 2030.

LABOUR PARTY

  • Use spare capacity in the independent sector to ensure patients are diagnosed and treated more quickly.
  • Develop an NHS innovation and adoption strategy in England to provide a clearer route to get products into the NHS coupled with reformed incentive structures to drive innovation and faster regulatory approval for new technology and medicines.
  • Return to meeting NHS performance standards with a target of no longer than 18 weeks from referral for consultant-led treatment of non-urgent health conditions.
  • Introduce a new ‘Fit for the Future’ fund to double the number of CT and MRI scanners, allowing the NHS to catch cancer and other conditions earlier, saving lives.

LIBERAL DEMOCRATS

  • Give everyone the right to see a GP within seven days, or within 24 hours if they urgently need to, with 8,000 more GPs to deliver on it.
  • Improve early access to mental health services by establishing mental health hubs and introducing regular mental health check-ups at key points in people’s lives.
  • Boost cancer survival rates and introduce a guarantee for 100% of patients to start treatment for cancer within 62 days from urgent referral.
  • Implement a ten-year capital investment plan for hospitals and the primary care estate.
  • Introduce free personal care and create a workforce plan for social care.

TAGS: Professional Services

POSTED BY: Carolina Gasparoli

Carolina Gasparoli