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The manifestos in full

Money Marketing takes a look at what the three manifestos have to say regarding financial services and general economic issues.

THE POLICIES

Pensions

Labour
1. Renew the link between the basic state pension and earnings by 2012 instead of 2015.
2. Cap taxpayers’ liability for public sector pensions.
3. The Pension Credit capital disregard will increase from £6,000 to £10,000.
4. Provide help for people to build up savings through personal pension accounts.
5. Promote stakeholder pensions offering simple, low-cost and flexible products.

Conservatives
1. Renew link between the basic state pension and earnings, raise state pension age to 66 from 2016, 10 years earlier than Labour.
2. Cap public sector pensions at £50,000.
3. End compulsory annuitisation at 75.
4. More support for employers to encourage auto-enrolment into pensions.
5. Compensate Equitable Life policyholders through an independent payment scheme.

Liberal Democrats
1. Immediately restore link between basic state pension and earnings.
2. Increase the state pension annually by whichever is greatest – growth in earnings, growth in prices or 2.5 per cent.
3. Scrap compulsion to buy an annuity at age 75
4. Give people early access to their pension funds in times of hardship.
5. Compensate Equitable Life policyholders who suffered financial loss.

Housing

Labour
1. Remove stamp duty for first-time buyers on all house purchases below £250,000 for two years and introduce a permanent 5 per cent stamp duty on homes worth more than £1m.
2. Introduce a new levy on banks to help fund affordable lending by third-sector organisations and transform the Post Office into ’a people’s bank’.
3. Break up state-owned banks, RBS and Lloyds.
4. Remutualise Northern Rock.
5. Clamp down on the interest rates and others fees charged by instant loan companies and doorstep lenders.

Conservatives
1. Permanently raise the stamp duty threshold to £250,000 for first-time buyers
2. Scrap home information packs.
3. Offer a ’people’s bank bonus’ as the Government sells off its holdings in state-owned banks.
4. Scrap large-scale regional housing plans and replace them with local initiatives.
5. Reduce banks’ reliance on wholesale funding.

Liberal Democrats
1. Create Safe-Start mortgages to protect buyers from negative equity and make it harder for homes to be repossessed.
2. Introduce a mansion tax of 1 per cent on properties worth over £2m, paid on the value of the property above that level.
3. Scrap home information packs.
4. Provide more homes for local people on low incomes in rural communities by promoting schemes for affordable homes.
5. Bring 250,000 empty homes into use by making cheap loans available to owners for renovation costs but scale back HomeBuy schemes.

’A murderous election to decide who to vote for’

Colin Jackson

Baronworth investment
services director
Colin Jackson

The Tories’ plan to permanently raise the stamp duty threshold to £250,000 for first-time buyers is absolutely great but they should link it to house price inflation, otherwise, in another five years, prices will go up again so it will not be worth as much. The Tories’ free financial advice service paid for by industry is all very well but is it really free? I’m going to be paying for it.

To have an emergency Budget within 50 days of taking office is probably much too early. They will not have enough of a grip on things after 50 days. It would be premature.”

Restoring the link between the state pension and average earnings is great but who is paying for it? They are all the same, with these grand gestures that they have not really figured out yet.

The Liberal Democrat manifesto is so complex and absolutely full of facts and figures. If you cram with facts and figures, it is very difficult for anyone outside the industry to make head nor tail of it.

The Labour party has made a complete hash of everything, the Tory party may make a bigger hash of it and in the current climate they are untested. Whoever gets in, there will be a massive uphill battle to put things right.

This is going to be a murderous election to decide who to vote for.

THE POLICIES

The Economy

Labour
1. Halve the deficit by 2014
2. Increase National Insurance contributions by 1 per cent from April 2011.
3. Introduce a new global levy on financial services firms.
4. Create UK Finance for Growth, raising £4bn to provide capital for growing businesses and create a Green Investment Bank.
5. Reform current takeover procedure by bolstering the UK’s Stewardship Code.

Conservatives
1. Wipe out the majority of the deficit over five years.
2. Reverse the effect of Labour’s proposed National Insurance rise for anyone earning under £35,000.
3. Push ahead with a levy on financial services firms, even without international consensus.
4. Launch a competition review into the banking industry.
5. Establish an independent Office for Budget Responsibility to oversee public finances.

Liberal Democrats
1. Cut Government spending from 2011.
2. Reverse Labour’s National Insurance rise, when resources allow.
3. Introduce a banking levy, forcing banks to pay for the financial support they have received and split retail and investment banking.
4. Ban banker cash bonuses of more than £2,500, with any higher bonuses paid in shares that would not be redeemable for at least five years and ban loss-making banks from paying bonuses at all.

’Geared to winning, not providing financial decisions’

Nick-McBreen.gif

Worldwide Financial Planning IFA Nick McBreen

’In terms of the higher-level stuff, I think the way the Conservatives are presenting their solution for economic recovery is very clever. They are making very bold statements about potential solutions to particularly public indebtedness without actually saying how they are going to do it.

The other worry that concerns me about not seeing the numbers for the economic solution is that George Osborne has no track record.

Labour are just bumbling and grumpy about being criticised – the tone of their manifesto is hardly vote-catching. It is just as vacuous.

Interestingly, the Lib Dem manifesto contains more hard numbers than the Tories bothered to put into theirs. Although the Institute of Fiscal Studies’ comments are that these numbers do not stack up. and that is very worrying.

These publications and documents are just geared to winning the election, not providing financial decisions. I cannot see Labour being returned to government but I cannot see a land-slide to the Tories as I see David Cameron as a lightweight, so it is a very difficult one.

Tax

Labour
1. No income tax rises during the next Parliament.
2. Scope of VAT will not be extended, although the rate may rise.
3. Promise to keep business taxes “as low as possible”
4. Maintain tax credits.
5. Restrict high-rate tax relief on pensions from 2011.

Conservatives
1. Cut headline rate of corporation tax to 25p and lower small companies’ rate to 20p.
2. Stop tax credits for families with incomes over £50,000.
3. Scrap child trust fund, except for the poorest families.
4. Raise inheritance tax threshold to £1m, paid for by a flat-rate levy on all non-domiciled individuals.
5: Allow married couples or those in civil partnerships to transfer tax allowances.

Liberal Democrats
1. Scrap income tax on the first £10,000 earned
2. Give tax relief on pensions only at the basic rate
3. Tax capital gains at the same rate as income
4. Give HMRC new powers to tackle tax avoidance
5. Scrap child trust funds.

Long-term care

Labour
Push ahead with plans to reform social care in England under the proposed National Care Service – funding method to be decided by a new commission.

Conservatives
Introduce a one-off, voluntary insurance premium of £8,000 to protect homes from being sold to fund residential care.

Liberal Democrats
Immediately establish an independent commission to develop future proposals for long-term care, that will attract all-party support and be sustainable.

Regulation

Labour
1. Cut the cost of regulation by £6bn by 2015.
2. Simplify regulation and avoid “unnecessary red tape”.
3. Impose tighter regulation on banks.
4. Make the FSA responsible for the regulation of all mortgages.
5. Strengthen regulation to ensure consistent standards of consumer protection from repossession. </B>

Conservatives
1. Hand prudential regulation to the Bank of England.
2. Scrap the FSA and set up a Consumer Protection Agency to handle conduct of business regulation.
3. Launch a free national financial advice service, funded by a £50m social responsibility levy on the financial services industry.
4. Balance the introduction of new regulation by reducing existing regulation.
5. Empower the Bank of England to crack down on risky bonus arrangements within banks.

Liberal Democrats
1. Reduce the burden of unnecessary red tape by properly assessing the cost and effectiveness of regulations, working towards a principle of one in, one out.
2. Work with the EU for stricter international regulation of financial services and banking.
3. Pass a new Mutuals, Co-operatives and Social Enterprises Bill to encourage diversity of providers.
4. Give responsibility for mutuals to a specific minister.
5. Give financial regulators a clear objective of maintaining a diversity of providers in the financial services industry.

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