With the surprise General Election fast approaching, all parties have now released their manifestos – each of which contains a plan for the economic future of Britain.
With the Tories initial lead narrowing with each passing day, which set of promises will win the election?
Conservatives
David Cameron’s popular policy, the tax ‘triple lock’ which guaranteed there would be no rise in national insurance, VAT or income tax, has been scrapped by Theresa May in favour of a more general intent to lower taxes.
This, as well as the simplification of the tax system, seems to be the Conservative’s core promise on the economy. The manifesto also included a vow not to increase the level of VAT, a commitment to raise the tax-free personal allowance to £12,500 and a promise to raise the threshold for the 40p tax rate to £50,000, both by 2020.
The Conservatives have also planned to increase national living wage to 60 percent of median earnings by 2020.
Labour
Labour’s key manifesto promise is to balance government spending with the amount it raises in taxes, propelled by a sharp and controversial increase in tax rates.
The tax hikes would see an increase in corporation tax to 26 per cent, raising £19.4 billion a year, as well as increasing the tax on 1.5 million high earners with an increase in income tax to raise £6 billion a year.
The threshold for the 45p additional rate would be lowered to £80,000, and Labour would reintroduce the 50p rate on earnings above £123,000.
Another key promise is to create a £500 billion National Investment Bank, designed to fill the gaps in lending left by private banks and provide long-term finance to R&D-intensive investments, helping the economy recover in the wake of Brexit.
Liberal Democrats
Often sidelined by the two major parties, the Liberal Democrats main manifesto promise is a strong anti-Brexit stance.
In terms of the economy, however, one of the Libs Dems largest promises is to commit to a £100 billion package of additional infrastructure investment.
Other promises include eliminating the deficit on day-to-day spending by 2020 and the cutting of Corporation Tax from 20 percent to 17 percent, offset by a tough stance against tax evasion. This would include introducing a General Anti-Avoidance Rule, setting a target for HM Revenue and Customs to reduce the tax gap and “continuing to invest in staff to enable them to meet it”.