Election 2015: What are the key manifesto pledges affecting financial services?

With the general election now only weeks away, Mark Sands, politics reporter for Mortgage Strategy’s sister title, Money Marketing, details the manifesto pledges affecting financial services.

Housing

The need for housing has driven all the major parties to pledge increases in construction.

However, housing is a devolved area, meaning the Welsh Assembly and Scottish Parliament governments dictate policies locally.

Alongside the Help to Buy Isa unveiled in the Budget, the Conservatives have promised to expand Right to Buy to 1.3 million housing association tenants.

They would also build 200,000 homes for first-time buyers aged under 40 at 20 per cent discount and create a £1bn brownfield regeneration fund to unlock sites for 400,000 homes.

Labour plans to build 200,000 homes a year by the end of the next parliament and would seek to prioritise local first-time buyers in new housing areas.

The Lib Dems have pledged to increase house building to 300,000 a year, including launching a new Rent to Own scheme targeted at reaching 30,000 new homeowners a year by 2020.

Ukip has promised to bring privately-owned long-term empty homes back into use through a statutory duty on local authorities.

The party would also seek to construct 1,000,000 homes on brownfield sites over the next 10 years, providing grants of up to £10,000 for development and exempting brownfield sites from stamp duty on first sale.

Ukip would additionally prioritise social housing for people with parents born locally and limit Help to Buy access to British citizens.

Natalie Bennett’s Greens would also seek to bring empty homes back into use as well as building 500,000 social rental homes over the next parliament.

In addition, the Greens would abolish Right to Buy on council homes.

Tax

While cracking down on tax evasion and aggressive avoidance has proved popular territory for all the major parties, several are also seeking to ameliorate the tax loads of voters.

The Conservatives have promised to raise the personal allowance to £12,500 and the 40 per cent tax threshold to £50k as well as offering an increased £1m inheritance tax threshold for married couples and civil partners.

They have also pledged not to raise either VAT or National Insurance contributions.

While Labour has also promised to avoid increasing VAT or National Insurance, the party has said it would re-introduce a 50 per cent top rate of income tax for people earning over £150,000.

It would also introduce a “mansion tax” on houses worth over £2m.

Ed Miliband’s party has further promised to raise £7.5bn a year in additional tax through targeting evasion and avoidance by the middle of the next parliament.

Liberal Democrat promises include raising the income tax threshold to £12,500 as well as raising up to £1.5bn from a mansion tax.

Nick Clegg’s party is also seeking to raise £14bn from tax rises on corporations and the wealthy and reduced tax avoidance.

It would hike charges on non-doms, increasing revenues by a further £130m, and has also proposed a new criminal offence of aiding tax evasion, which would see those facilitating tax dodgers hit with the same financial penalties as the evader.

The Scottish National Party is campaigning to give the Scottish Parliament more tax powers and wants control of National Insurance contributions and the personal tax allowance.

Plaid Cymru would also introduce a 50p income tax rate for those earning over £150,000 as well as increasing levels at which National Insurance contributions are paid to same level as income tax.

In addition, the Welsh nationalists are campaigning for corporation tax and some income tax powers to be held in the Welsh Assembly.

Ukip would go further than the Conservatives by raising the personal allowance to £13,500 as well as introducing a new 30p tax band for those earning between £45,300 and £55,000.

Nigel Farage’s party would also scrap inheritance tax and cut business rates for small businesses.

The Greens would tax salaries of more than £150,000 at 60 per cent and have further promised to raise £25bn by 2019 through a wealth tax of 2 per cent on people worth £3m or more.

The Greens estimate they could raise £30bn a year from cracking down on tax dodging through a new bill targeting corporations and a further £20bn a year by 2019 through the implementation of a Robin Hood tax on banks.

Pensions

Tax relief on pension contributions is in the firing line yet again as the Conservatives, Labour and the Lib Dems plan major reform of the system. The Tories say they will scale back the annual allowance for people earning £150,000 or more. Under the plans, the tax-free amount will be reduced by 50p for every pound of earnings up to a salary of £210,000, above which the annual allowance will be £10,000.

The saving made on limiting tax relief will make up for raising the inheritance tax threshold to £1m per couple. Labour also favours paring back tax breaks for people earning over £150,000 while the Lib Dems say they will establish a review to consider introducing a flat-rate of tax relief. The party also says it will enshrine the “triple lock” on uprating the state pension into law.

Labour and the Conservatives have also committed to the triple lock.

Ukip says the Pension Wise guidance service is inadequate and it would fund advice, possibly through a voucher system, as well as doubling Pension Wise’s budget.

The party also proposes setting the state pension age at 65, with payments increasing if people defer taking benefits. In addition, Ukip wants to criminalise pension cold-calling. 

The SNP wants Scotland to set its own state pension age at a lower level than the rest of the UK to reflect the relatively low life expectancy of its citizens. The Greens, meanwhile, would establish a ‘citizen’s pension’ set at £180 a week paid regardless of contributions.