General election 2010: what it means for you - Economy - News - Moneyfacts


General election 2010: what it means for you

General election 2010: what it means for you

Category: Economy

Updated: 06/05/2010
First Published: 05/05/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The general election is upon us, but do you know what impact the possible results could have on your money, the wider economy or even your business?

If not, rest easy as leads you through the policy minefield.


Labour – Should the existing government be voted back into 10 Downing Street, it has pledged to increase National Insurance (NI) by 1%, a measure it says is necessary to protect public services.

Labour has also outlined plans to cut business rates for one year from October, a move it says will benefit more than half a million businesses, with 345,000 paying no business rates at all.

– The Tories have promised to scrap the planned rise in NI, saying they will save money instead from efficiency savings, such as waste, red tape and bureaucracy.

The party has also said it will cut the main rate of corporation tax from 28p to 25p and from 22p to 20p for small companies.

Liberal Democrats – A rank outsider at the beginning of the campaign, the Lib Dems have made up real ground, with their promise not to take any income tax from the first £10,000 of workers' incomes catching the eye.

Nick Clegg has said that this policy would put £700 back into the pockets of millions of people on low and middle incomes and free 3.6 million more people on low incomes from paying any income tax at all.

A mansion tax would also be introduced at a rate of 1% on properties worth over £2 million, paid on the value of the property above that level.


Labour – A promise to re-establish the link between the state pensions and earnings from 2012 onwards, while grandparents helping to look after their grandchildren will be given National Insurance Credits which can be put towards their state pension.

The party is also behind auto-enrolment, which will make it easier for people to save into a private pension.

Conservatives – Have also said that they will raise the basic state pension in line with earnings, and will look to reinvigorate occupational pensions, working with employers and employees to support auto-enrolment, which is set to begin in 2012.

The Tories have also pledged to end the obligation to buy an annuity at 75, although people will be asked to retire a year later to help fund care for the elderly.

Liberal Democrats – The party has also said it will scrap the rule that compels people to purchase an annuity at 75, while giving greater flexibility in accessing part of the pension pot early, in times of financial hardship for example.

The Lib Dems have also said that the link between the state pension and earnings will be re-established, and that the amount pensioners receive from the government will rise annually by whichever is highest from growth in earnings, growth in prices or 2.5%.


Labour – The party has made its position clear, with a promise that no money will be taken out of the economy in 2010/11, a decision made possible with the rise in NI.

It has, however, promised to make tough decisions to shore up the recovery, including capping pay increases for public sector workers and scrapping tax relief on pensions for the most wealthy. A 50p higher rate of tax will also be introduced.

Conservatives – The Tories have said they will keep the 50p rate of tax, but will start to make cuts immediately. The party has argued that savings must be made now and will stop the rise in NI – a move it has said could halt the recovery.

A one year public sector pay freeze will also be implemented, although this will not include the one million lowest paid workers. As part of its plan to boost the economy, the Conservatives have pledged to reduce government waste and have promised to achieve better productivity and value for money.

As part of savings measures, child trust finds would be cut for all but the poorest families.

Liberal Democrats – Nick Clegg's party has said it will combine cutting waste with large cuts. Money will not be taken out of the economy in this tax year, but cuts are planned from 2011/12.

As well as £15 million a year that has been identified in efficiency savings, other measures include a review of the UK's nuclear weapons programme and scrapping identification cards. Smaller cuts, such as the eradication of child trust funds, are also planned.


Labour – The party has pledged to create one million skilled jobs as part of a high tech economy that will include super fast broadband, green industries and improved railways, while skilled manufacturing jobs have also been promised.

Young people will also be encouraged back into work, with anybody aged 24 or under that has been out of work for more than six months offered a job or a place on a training programme.

Conservatives – David Cameron has said that he wants to make the UK the leading hi-tech exporter of manufactured goods and that he will make it easier for small and medium sized businesses to get access to credit, helping them to expand and recruit.

All new business starting in the first two years of a Conservative government will be exempt from employers' National Insurance on the first ten employees they hire, while there are plans to create a new generation of small businesses, supported by a network of business mentors and substantial loans to would-be entrepreneurs.

Liberal Democrats – If elected to office, the Lib Dems have promised to introduce a one–year job creation package, which will be supported by an Infrastructure Bank that will direct finance to essential projects and job creators, such as new rail services and green energy.

The party believes that by creating long term, sustainable services, it can create lasting employment for many.


Labour – In the party's manifesto, Labour promises to give local authorities the power to provide affordable housing, and has also pledged to invest £7.5 billion into creating over 100,000 new energy efficient homes.

Labour has said that access to an affordable home is one of the party's central ambitions, and, as such, first time buyers will escape stamp duty on properties worth £250,000 or less for the next two years.

Conservatives – The Tories have said that the £250,000 stamp duty exemption will be permanently introduced rather than phased out in two years. The Home Information Packs programme will also be scrapped.

The party will also encourage low to middle income families to part own their home and councils will be rewarded for building more homes. Local Housing Trusts will also be created, allowing communities to build local homes for local people.

Liberal Democrats – The Lib Dems have said it will oversee the building of tens of thousands of homes to rent, so those who cannot afford to buy are not left without a property.

New mortgages that protect buyers from negative equity will also be created, while local authorities will be given back powers to determine how many and what type of homes are needed in their area.

Find the best savings account for you - Compare best selling savings accounts

Find the best mortgage for you - Compare best selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Base rate remains unchanged in surprise decision

Earlier today, the Bank of England’s rate setting committee announced that it had voted decisively to keep base rate on hold at its record low of 0.5%. But what does it mean for you?

Budget 2016 – an overview

Well, George Osborne has just revealed the Budget for 2016 – his eighth so far as Chancellor – and as ever, there were some winners and losers from the whole thing. Below is a quick overview of the key points.

What does a US Fed rise mean for the UK?

The US Federal Reserve has decided to raise interest rates, and although you may not think that financial events happening in the US will have much of an impact on UK soil, you may be surprised…