Tag Archives: Election

Osborne Calls Emergency “Stability” Budget

Following the Conservative victory in the UK’s general election, George Osborne has announced a new budget to be delivered on the 8th of July this year. The unusual move of delivering an extra budget is, he said, part of the government’s efforts to “deliver on the commitments we have made to working people” as soon as possible.

Previously, Osborne delivered the annual budget on the 18th of March. Through an article in national newspaper The Sun, he acknowledged that inserting an extra budget mid-year was an “unusual” step to take. However, he said that it was down to a desire to make “promises made in the election into a reality” with the minimum of delay.

The “stability budget” to be held in July will, Osborne claimed, concentrate with “a laser like focus” on improving UK living standards through raising economic productivity.

The chancellor has given a rough outline of the plans he expects to deliver in this budget in a conference outside 11 Downing Street. However, he would not yet go into any details of pertinent issues such as plans to make £12 billion worth of cuts to welfare. During the election campaign, the party provided details of how £2 billion worth of cuts would be achieved, but the remaining £10 billion remains unaccounted for in the details so far released.

While Osborne would not go into specifics about how the government’s goals would be achieved, he was happy to outline what the main goals are. The budget will, he said, represent a continuation of a “balanced plan” from the government to reform welfare, reduce government debts, and invest in the National Health Service. The welfare reforms, he said, would focus on efforts “to make work pay.” However, he refused to give any indication of where or how they would make the planned £12 billion of cuts to welfare funding. He only said that the government wanted to create “a welfare system that’s fair to the people who pay for it” but would “always protect the most vulnerable.”

Osborne also said that the government will increase NHS funding each year, continue cracking down on tax avoidance, and help to create new jobs including an extra three million apprenticeships.

Labour’s Caroline Flint, shadow secretary for energy and climate change, said that the Tory election campaign has involved a number of “uncosted promises.”

“It will be interesting,” Flint continued, “to see who is going to pay for those uncosted policies when they bring in the budget in July.”

2015 Election: Financial Policies of the Major Parties

The three main parties and a host of minor ones are now battling for votes as next month’s general election approaches – an election which has been called one of the hardest to predict in many years. They have very different policies on many important issues, so the election results could have a significant impact on many aspects of the UK. Perhaps one of the main ways that the election result could affect everyday life for the average UK household is through their policies on financial matters such as taxation.

Labour, the Conservatives and the Liberal Democrats have always decidedly dominated election results, and are widely considered the three main parties. These three key players in the UK political scene have the following policies on matters of finance:

Labour

Labour’s big plans for the UK economy as a whole involve reducing the UK’s levels of national debt “as soon as possible” and bringing about a situation of budgetary surplus. In order to keep the national debt in check and ultimately bring it down, they would cease new borrowing for government spending. They also plan to lead a campaign against tax avoidance, with UK overseas territories that refuse to cooperate with these efforts threatened with a place on an international blacklist.

Regarding the issues that more directly affect the average household, Labour plans to bring back the 10p bottom tax rate, which would result in an income tax break for 24 million UK citizens. The party would drop the Married Couples’ Tax Allowance in order to fund this. They would also introduce the much-talked-about concept of “mansion tax,” levied on properties worth more than £2 million, raising an estimated £1.2 billion. Furthermore, Labour would bring back the top 50 rate of income tax for those earning more than £150,000 annually, tax bankers’ bonuses and cut every government minister’s pay by 5%.

Conservatives

The Tories hope to get rid of the UK’s deficit by 2018, and by 2019/2020 they hope to follow this with an overall surplus in the budget. Their plan is to bring this about through cuts in spending rather than through new or increased taxes.  NHS spending would not be in line for cuts. Rather, the Conservatives plan to increase health spending.

By 2020, the Tories hope to cut income tax for 30 million UK citizens. The personal allowance would be raised to £12,500 a year, and the 40p top rate of tax would take effect from £50,000 a year rather than the current level of £41,900.

Liberal Democrats

The Lib Dems plan to get rid of the deficit by April 2018 through “strict new fiscal rules.” Like Labour, the Liberal Democrats plan to bring in a “mansion tax,” which would operate in bands much like council tax.  UK banks would be subject to an extra 8% corporation tax rate, raising £1 billion a year to help get rid of the deficit.

The Lib Dems plan to raise the personal allowance to £11,000 in April of next year, and bring it to £12,500 by 2020. They would raise capital gains tax to 35%, from the current rate of 28%.

Prime Minister Pledges Tax Cuts Ahead of May Election

David Cameron has stated that the people of the UK “deserve tax cuts” and that there is an “economic, moral and practical case” for reducing the amount of tax they pay. The Prime Minister’s comments came as part of a speech given in Hampshire, in which he outlined his pledges on the subject of taxation ahead of the general election in May.

According to the Prime Minister, his party’s plans for taxation would see the personal allowance – the amount an individual can earn each year before they start paying tax – raised to £12,500 by 2020. This, he said, was fitting for a country that is “thoroughly in favour of work and effort.” The term of the coalition government has already seen the personal allowance raised from £6,475 when the current parliament was formed in 2010/2011 to 10,500 in the current financial year.

The Liberal Democrats have also pledged to ensure the personal allowance reaches the £12,500 by the time the next parliament ends in 2020. Though the pledges are identical, the parties disagree on where it originates within the current coalition government. Both parties seem keen to claim themselves as originators of the idea, with the Liberal Democrats also claiming to be the ones behind tax cuts during the current parliamentary term.

The Prime Minister insisted that the pledge to raise the personal allowance was “not just a vague promise” but that “we have a track record.” He went on to point out that, since his party came to power as the larger part of the coalition in 2010, tax cuts have delivered a £700 saving for 24 million people, and removed 3 million people from tax entirely. However, the Liberal Democrats seem to feel this is really their track record, claiming that they have “fought tooth and nail” to reduce tax as part of the coalition with the Conservatives.

Regarding the way a Conservative government would approach taxation if elected in May, the Prime Minister said: “We should start from the proposition that it is people’s money not government’s money and we should leave them with as much to spend as we can rather than frittering it away on wasteful government projects.”

He claimed that the Conservative party’s tax plans would remove a further million people from the need to pay any tax at all, with nobody working a 30 hour week at minimum wage required to give money to the government.

The government has also pledged to raise the threshold at which people are required to start paying tax at the 40% rate from £41,900 to £50,000 in a bid to help earners in middle income brackets. This would, he said, support “aspiration.”