Analysts at Rabobank recently came out with their check of the United Kingdom’s (UK) opposition Labour Party manifesto that was released on Thursday.
Key quotes
Labour is pledging to: boost spending on health, with up to 5% pay-rises for front-line staff; raise the minimum wage from GBP8.21 to 10; freeze the age of receiving a pension at 66.
Introduce a National Care Service; move to net-zero carbon emissions within the 2030s; nationalise the big-six energy firms, the national grid, water, Royal Mail, the railways.
Broadband (which will be free); move towards a 4-day week; start a new benefits system; free bus travel for under 25s; build 100,000 council homes a year; and abolish university tuition fees.
Taxes will also rise by GBP80bn via 5% income tax increases for top earners; large corporation tax up from 19% to 26%; capital gains tax equalised with income tax; inheritance tax thresholds lowered to a level far below the average price of a house in the Southeast; taxing second homes; and placing VAT on private education.
The Institute for Fiscal Studies rejects Labour’s claims that this will mean no tax change for 95% of Brits, and states these plans would raise the tax burden to the highest level since WW2, even surpassing the Denis Healey “Squeeze the rich until the pips squeak” 70’s.
Obviously, markets don’t like it – but will voters? Do these bread and lots of butter matters outweigh the Tories’ Brexit focus?
For now, there is still no Tory manifesto, just a–relatively–feeble promise to raise the National Insurance threshold over five years, eventually putting GBP500 a year in people’s pockets.
GBP will therefore be watching with keen interest as we move towards seeing what is on offer when the Conservatives “put their right arm in; their right arm out; in, out, in, out and shake it all about.”
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