View more on these topics

Lib Dem conference: What did it all mean for advisers?

The Liberal Democrat conference in Glasgow draws to a close today after nearly a week in which the party began to flesh out its tax and financial services policies ahead of the next election.

There have been plenty of examples of what the Lib Dems will put in their next manifesto and how they will differ from Labour and the Conservatives.

1. Pensions tax relief

In its Fairer Taxes policy paper the Lib Dems backed a cut to the pensions lifetime allowance from £1.25m to £1m.

An internal party memo, sent to journalists by mistake, still said this as a “generous” level of relief that would not impact many people.

Privately, senior Lib Dems support a much more radical overhaul of the system to skewer it more towards lower earners. They are considering proposals to massively shake up the system to make it more visible and simpler. Their last general election manifesto called for higher rate relief to be scrapped altogether. 

2. Capital Gains Tax

Increases to capital gains tax has been another long-term Lib Dem focus and they did not let up at this year’s conference.

The party wants to align CGT with income tax rates to tackle what it sees as tax avoidance strategies. 

It currently stands at between 18 per cent and 28 per cent after changes in the emergency 2010 budget.

The Lib Dems also want indexation to apply to CGT so inflation is taken into account when calculating the gain, to benefit long term investors. 

3. Personal allowance

The Lib Dems have been at pains to stress it was their policy to raise the income tax personal allowance to £10,000 in April 2014.

Treasury chief secretary Danny Alexander said the Conservatives have a “bloomin’ cheek” trying to claim credit while Clegg has repeatedly pointed out that David Cameron said it was unaffordable before the last election.

Such is the perceived popularity of the move, the Lib Dems want to go further and increase the allowance to £12,500.

The thinktank, Resolution, has pointed out this would take more people out of auto-enrolment, which could hit lower earners saving for retirement.

4. Wealth Tax

An unlucky Lib Dem press officer sent a memo intended for MPs and ministers on “lines to take” for Monday to journalists in an error worthy of a scene from the The Thick of It.

It contained a reference to people earning more than £50,000 as “very wealthy” and signalled the party would like to tax them more.

Some form of wealth tax has been another party obsession and, although there are no detailed proposals on the table, they are not going to let it drop.

The party also remains committed to a mansion tax, a 1 per cent charge on all properties worth more than £2m.

5. 50p tax rate

In an incredibly narrow vote on the conference floor the party decided to keep its endorsement of the 45p top rate and side with the leadership.

The vote highlighted the fact the party is split down the middle on the issue but that it is unlikely to offer a change in its manifesto.

6. Consultancy charging

Lib Dem pensions minister Steve Webb says he was “gobsmacked” at standards of future auto-enrolment schemes when he took the job.

He has acted by consulting  on a charges cap and banning consultancy charging and is now considering making it retrospective.

Possible retrospective action has raised questions over whether pre-RDR commissions on auto-enrolment schemes could face action. When asked by Money Marketing Webb dodged the question but pointedly refused to rule it out.

Some in the industry estimate there is as much as £200m in pre-RDR commissions and it could put thousands of advisers out of business.

7. Regulated advice around long-term care

After months of intensive lobbying by the industry the Government says it will create a stronger role for regulated financial advice in its long-term care reforms.

The Care bill currently refers people looking for long-term care to “independent” financial advice but not regualted advisers.

Care services minister Norman Lamb says he will “strengthen” the role of IFAs in the bill and is attracted to the possibility of advisers giving free initial consultations to those looking for long-term care funding.

Health minister Earl Howe also met with campaigners last week and said he understood concerns and will look to make changes.

Keep in touch with all the latest financial services news from the Lib Dem conference here

Recommended

1

Chris Davies: The ‘bags of cash days’ have long gone

The results from today’s FCA review on inducements paint a concerning picture. Poor management culture with a reliance on marketing allowances risks undermining the RDR. Principle 8, which covers conflicts of interest and inducements, should be a core consideration when providers and advisers structure any service or distribution agreement. Yet the FCA found over 50 per […]

judge-gavel-law-justice-fine-ban-500x320.jpg

IFA unauthorised investment advice trial begins

The FCA has begun its prosecution against a banned IFA and his business partner for giving investment advice without being authorised by the regulator. West Midlands-based adviser Gary Hexley is charged with six offences relating to giving unauthorised investment advice, including five counts of dishonestly concealing a material fact. If he is found guilty on […]

FCA-Building-Blue-Sky-700x450.jpg
3

Partnership confirms FCA probe into adviser incentives

Partnership has confirmed it is being investigated by the FCA as part of the regulator’s crackdown on incentives between providers and advisers which undermine the RDR. In a statement to the stock market this morning, the firm says it received notification last night from the FCA that it has appointed investigators to probe the distribution agreement […]

Peter-Mann-Skandia-2013-700x450.jpg
3

Skandia will pay trail commission until 2016

Skandia says it will continue to pay trail commission on past business through its platform until the FCA implements its ban on legacy payments between fund managers and platforms in April 2016.    The firm says it opposes moves by other platforms to end trail commission on legacy business before the April 2016 deadline set by […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. “If it moves, tax it.”

    There you go, a nice precis of what these loons are about. No need for a long-winded manifesto.

  2. Gawd! What’s the difference between the Lib Dafts and the Left Wing Labour Party? Answers on a postcard.

    Anyway it looks like even a phone box will be too big for their MPs after the next election. Pity there isn’t euthanasia for politicians.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com