Conservatives Reveal Manifesto Ahead of Labour’s Launch Today

Yesterday saw the release of the 76-page Conservative Party manifesto at Silverstone.

Headlines across all sides of the political spectrum centred on the fiscal loosening measures announced by the party and how they would – or would not be – funded.

The Conservative Campaign Headquarters (CCHQ) put the total cost of the promised tax cuts at £17.2bn over the next five-year Parliament. The Labour party however put it as high as £71bn (roughly the amount the government spend on defence and housing in FY 2022-23).

Meanwhile, the Director of the Institute for Fiscal Studies said that the plans to reduce the welfare bill, clamp down on tax evasion and cut the civil service were “definite giveaways paid for by uncertain, unspecific and apparently victimless savings.”

When focusing in on taxes, perhaps the most expensive pledge was to cut employee national insurance contributions by another two pence by 2027, at a cost estimated to be £10.3 billion. The Conservatives also pledged to scrap national insurance entirely “when financial conditions allow”. What constitutes adequate conditions was, unsurprisingly, left unclear.

Earlier this year, the Conservatives cut 2pence off NI contributions. At the time, the Financial Times estimated that every 1pence cut to NI would equate to £5bn a year in forgone tax receipts (against £7bn for a 1pence cut to the basic rate of income tax).

The manifesto also pledged to wipe off NI contributions for the self-employed, a scheme that will cost £2.6 billion according to the Conservative Campaign Headquarters (CCHQ).

On housing, the party would abolish stamp-duty for first time buyers, estimated to cost £590m while also get rid of capital gains tax in instances where landlords sell their houses to their tenants (which they say will cost £40m).

Missing from the manifesto was any cuts to inheritance tax, which many commentators had been speculating on whether the Conservatives would seek to alter.

The Labour Party were quick to criticise the Conservative Party manifesto, with the Shadow Chancellor Rachel Reeves citing their analysis which “identified £71 billion of unfunded commitments over the course of the next Parliament”.

Here she said that “The consequence of an increase in day-to-day borrowing to fund the commitments made in this manifesto would amount to a second Tory mortgage bombshell because higher borrowing at this scale would force the Bank of England to increase interest rates.” According to Reeves this would have a knock-on effect of adding an additional £4,800 to the average mortgage.

The Labour party’s manifesto is set to be released later today.

The British Social Attitudes survey has identified a sharp decline in trust and confidence in UK politics, hitting record lows.

According to the survey, “a record high of 45% now say they ‘almost never’ trust governments of any party to place the needs of the nation above the interests of their own political party.”

Their research also suggested that there was a “sharp rise in disenchantment among Leave voters” while “public policy failures also undermine trust and confidence”.

The report cited the cost-of-living crisis and Brexit implementation as key factors in the fall in trust.

Hence, as focus turns to the pledges revealed in the manifestos of major political parties, it’s evident that those in Westminster will need to restore trust across from the electorate over the next parliamentary session.

UK GDP data out this morning indicated that economic growth stalled over April, having recorded 0% growth on a month-on-month basis. This signalled the worst growth in four months as industrial output and constructions fell. Services however grew for the fourth consecutive month, rising 0.2% with computing and telecommunications sectors experiencing the greatest level of growth.