Britain will head to the polls in 9 days time to determine which political party will be charged with running the country for the foreseeable future. Over the course of this week, we will take a look at what the 3 major parties are promising in terms of the main issues for contractors: taxation, the economy and business. Today, we start off with Labour.
As has already been well publicised, Labour plan to to introduce the 50p tax rate for earnings over £150,000 so any high earning contractors would fall into this bracket. They are also planning a 1p increase on NICs. They are also planning to introduce a new tax in order to fund ‘Digital Britain’. This will equate to 50p per month chargeable to all landline owners. They do, however, plan to keep mortgage rates and business taxes at as low a rate as possible, although they have not specified what this would equate to. Any first time buyer purchasing a property worth £250,000 or less will also benefit from no stamp duty. Finally they plan to reduce the tax relief on pensions for those who are most financially well off.
In terms of the economy, Labour have pledged not to risk the recovery of the economy by cutting public spending in a reckless manner. They do plan to create 1 million skilled jobs through the creation of a high-tech economy. This is just one of the plans in the Labour manifesto to rebuild the economy ‘in new ways’. Their overall aim is to have the fiscal deficit by 2014.
Businesses can expect an increase and protection of the capital allowances which will enable key sectors to thrive. They also plan to continue the Time to Pay’ scheme which will be applicable to payments of tax and NICs. Labour have also set out plans to increase lending by banks to smaller businesses alongside the introduction of a ‘Small Business Credit Adjudicator’ who will oversee the credit lending to small firms.
Labour also aim to provide support to high tech industries in order to “forge a new culture of long-termism in business”. They will also utilise the Strategic Investment Fund for renewable and nuclear industry investment. Growing businesses will also benefit from the UK Finance for Growth Fund which will combine private money with £4bn of public funds. As for third sector organisations, they can expect better supports when tendering for public sector contracts alongside bigger organisations.
Lastly, a Labour Government would plan to cap pay rates in the public sectors during financial years 2011-12 and 2012-13.