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Nic Cicutti: Where were the financial reasons to vote Conservative?

Labour masterstrokes put Conservative pre-election inducements in the shade.

Once a year in June I go away with a bunch of friends to ride my Lambretta abroad. Our goal is to attend a rally of like-minded European scooter enthusiasts, which takes place annually in different countries chosen by rotation. This year our destination was Italy. So it was that after a day’s riding on Lake Garda, I turned on my mobile to check the news and discovered to my amazement that projections after the election vote closed at 10pm had Conservatives and Labour running almost neck and neck. Like most others, I had assumed the Tories would win with a large majority.

Since then, gobsmacked commentators have offered plenty of reasons, some more credible than others, as to how Labour managed to come within 800,000 votes of the Tories, surpassing all previous expectations. Advisers reading this column almost a week after the election will have had the opportunity to assess which ones they find most compelling.

For me, what is striking about the debate over manifestos, when viewed from abroad, was not only the absence this time round of compelling “money-in-your-pocket” reasons why people should vote Tory.

In previous elections, the Conservatives have always come up with eye-catching proposals to prove they are the ones with a common touch when it comes to voters’ personal finances.

George Osborne was a natural at this: forget his occasional cock-ups, for example, with “pasty taxes”, he could usually be relied upon to come up with a pre-election incentive to keep potential electors on his side. His 2007 pledge to raise the inheritance tax limit to £1m, which spooked Labour into calling off an early election that year, was described even by the New Statesman as a “political masterstroke”.

In late 2014, his reform to the way stamp duty was levied, just months before the following year’s election, not to mention the changes to inheritance tax and the other pension reforms he introduced, including the 2015 pledge to keep the triple lock in place for another five years, were aimed at keeping voters sweet.

This time round, however, there was almost a masochistic decision to allow swathes of the population to believe they would be worse off financially if they voted Conservative.

Pensioners take a pounding

This was the case for pensioners and those coming up to retirement, who were told their winter fuel allowance would be means-tested – with no estimates as to how that might work. Basically, you offer nothing extra to the less well-off while allowing everyone else to believe they might lose out: how clever is that?

The scrapping of a triple lock on state pensions, supported by many experts on the “left” of the Tories, was another own goal. The original idea had been it would remain in place until at least 2020. But during the election itself, the impression given was of an imminent abandonment of this policy.

Intriguingly, in the 12 months before the election, when the debate over the triple lock was raging, it was Royal London policy director Sir Steve Webb who argued for keeping the triple lock in a modified form. Webb clearly identified that for many who have no other savings in place, retirement incomes from the state were still too low. In April, he proposed the triple lock should be retained for all pensioners on the old basic state pension, before the new state pension was introduced in April 2016.

“There was almost a masochistic decision to allow swathes of the population to believe they would be worse off financially if they voted Conservative.”

Yet there was no sense of understanding on the Tories’ part that a compromise might be necessary on this issue because large numbers of existing pensioners do not yet feel that their living standards have been transformed in the past six or seven years. Their savings income is stagnating because of low interest rates while prices for the staples they are more likely to spend their money on – food and electricity in particular – are rising faster than inflation generally.

Even worse were proposals on the so-called “dementia tax”, a subject on which Ros Altmann has done a superb demolition job in her latest briefing. Her argument is that contrary to some who argued Theresa May was in effect quadrupling the previous £23,500 means-test threshold to £100,000, for those who needed home care or had a relative still living in their home, the Tory manifesto proposals were actually worse than current provisions.

Indeed, Ros points out the £100,000 floor is an artificial one anyway as it does not cover those facing additional costs, for example, elderly relatives in a more expensive care home or those who need more than a token 15-minute home visit every day. Her argument that “rather than using care as a political football, a national solution is needed” to the social care crisis, is a valid one.

Always assuming anyone wants to listen, of course. I have previously said the Conservatives were far better at offering pre-election inducements than Labour, miraculously finding the money to fund their natural constituents’ financial preferences.

This time round, it was Labour who hit the sweet spot: their pledge to scrap tuition fees for students, not to mention keeping the triple lock in place until 2025, were masterstrokes. Now it has learned how the bribery system works, why would Labour want to go back to the old ways?

Nic Cicutti can be contacted at nic@inspiredmoney.co.uk

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Tuition fees was no sweet spot. In my day when there were not only no tuition fees, but we also got paid to go (grants – means tested)the proportion who went was 5%.

    Today with fees is is around 50% I believe. If they were to scrap fees, just watch the percentage shrink, as hurdle rates for qualifying entry will be tightened up considerably. No GCSEs for photography and macramé knitting!

    In fact no party offered compelling financial reasons to vote for them. Perhaps the Lib Dems as they were steadfastly for Europe. Unfortunately only a gesture, but at least I can take comfort that we got what I had hoped for – a hung Parliament leading to a much softer Brexit.

  2. Julian Stevens 15th June 2017 at 2:22 pm

    Without recalling Labour’s disastrous and long standing pedigree on mis-managing the economy (you can’t make the poor wealthy merely by making the wealthy poor), people got suckered in by Corbyn’s promises to spend more money on this, that and everything else, funded largely by additional government borrowing (never mind the already vast and still increasing public sector debt), a 1% increase to corporation tax and an increase to income tax for those nasty fat cats earning more than £80,000 p.a. (just above what MP’s get paid).

    What these voters failed to consider is that a raising corporation tax is likely to invoke operating economies, starting with……jobs, and that an economy can be truly robust only if it’s living within its means. Public sector investment is all very well but only if the government actually has the money to invest in the first place.

  3. One word….. history

    Just read the history books as to where the UK’s economy was at the end of every single Labour administration since the 1960’s. Bankruptcy! That alone is a good enough reason to vote conservative. Indeed based on Corbyn’s spending ideology, had he been elected we would have reached that position far earlier than any other previous Labour administration.

  4. I have 6 and you have 2 . if I give you 2, we will both have 4.. Thats fair and makes us equal. The few sacrificing for the many… but excuse me…pardon me if I apply (a very) human logic and ask a question.. “Whats in it for me? “

  5. Harry have to agree re tuition fees. There are few universities &/or courses which are directly useful for the first employment for graduates many of whom come out of college with an inflated view of their worth to prospective employers – a waste of their time and money. To now stop (and write off) tuition fees will make it still a waste of their time but everyone’s money – far better to further incentivise employers to take on school leavers and offer more vocational qualifications. Cannot, as you would expect agree with your Brexit reference. A good and sustainable deal is one which is fair to both sides and neither a hard or soft Brexit deal can guarantee that. At the moment there is far too much unnecessarily aggressive and boring posturing from leavers and remainers and especially the EU. If the eventual deal is a poor one for the UK it will be as much the fault of the Europhiles as the Eurosceptics for not working together once the decision had been made.

  6. No, the Conservatives offered no bribes to the electorate. Perhaps that was because they had a realistic expectation of being in power.

  7. Cicutticutti has lost the plot

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