The election is just days away on Thursday (8 June) and the polls (if you believe them) are showing a narrowing of support for the two main parties, Labour and the Conservatives. But who is best for you and your clients?
Labour
Phil Billingham, director of Perceptive Planning.
The normal approach is to analyse the respective manifesto pledges, and see who promises to ‘shake up pensions’ yet again, or to calculate the effect of tax rates on the demographic of our client base.
This time it is different. We must focus back to the first duty of government, which is the welfare of its people.
And in this regard, the following fact remains true - what is best for advisers is change and complexity. What is best for clients is clarity, stability and consistency and gradual ‘soft’ transitions if possible.
So to address the elephant in the room, as the Tories seem to have become the paramilitary arm of UKIP, the determining factor must be that a Labour government will take a softer, more productive approach to Brexit and immigration.
That will lead to less of a shock to the economy, and lessen the negative impact on tax revenues.
If you couple this with rates of corporation tax that are still lower than our neighbours, but higher than the Tory proposals, then together they will generate more tax to be able to reverse cuts to police and NHS at this critical time.
Safety and security must come first.
Conservatives
Ben Yearsley, director of an advice firm, former investment director and co-founder of Wealth Club.
Instinctively the Conservative party should be the party of investors, whether they are advice driven or execution only.
They are the Party committed to reducing corporation tax to 17 per cent; benefiting pension funds and private investors alike as more profit is available to pay as a dividend.
They are also the party of aspiration, introducing both personal pensions and for those old enough to remember the PEP (Isa's forerunner) and increased the annual Isa allowance to £20,000, meaning saving for long term goals is tax efficient for most.
However, to add a bit of balance, they have done their damnedest to ruin pensions for many; lowering the lifetime allowance and reducing the annual amount that can be invested.
On the advice market, there is little in evidence from any party that they really understand it I'm afraid; manifesto pledges are rarer than, well, a pledge by Labour to be nice to business.
Labour
Richard Murphy, professor of Practice in International Political Economy, City, University of London. Chartered accountant, author of The Joy of Tax, director, Tax Research LLP.
Financial markets are mechanisms for managing capital to earn real rates of return in as low a risk environment as possible. In my opinion Labour's plans provide the best chance of this happening.
First, they are committed to beating tax abuse, especially in tax havens. Tax abuse has been used to artificially inflate earnings, increase executive pay and transfer risk to shareholders behind layers of opacity. Labour's plans will stop this abuse that has deliberately increased shareholder risk. Business will have to concentrate on making real returns instead, which is good news for everyone.
Second, Labour's corporation tax and financial transaction tax plans will discourage financial engineering and encourage investment for long term growth - the goal of all investors as opposed to investment managers. Again, that's good news unless churning is your goal.
As is, thirdly, Labour's demand for better accounting, and especially country-by-country reporting. This is about informing better decision-making on tax, supply chain risk, geo-political factors, governance risk and more besides.
All investors should applaud that.
And fourth, Labour is committed to close ties to Europe. These are vital.
There is no real debate this time: for investment growth, lower risk and commercial security Labour wins hand down in this election.
Conservatives
Brian Hill, managing director at Jones Hill.
Labour plan to increase the highest rate of income tax to 50p in the pound – their Shadow Chancellor, John McDonnell, indicated this would apply to incomes over £80,000 a year.
The Conservatives have promised an increase in the personal allowance to £12,500 and raised the 40p income tax threshold to £50,000 per annum. They have combined this with no increases in national insurance or income tax.
Neither party appear to have got stuck into dividend taxation, and as many high earners are business owners they simply take £8,000 PAYE and the rest in dividends, so would be unaffected by Labour’s proposed tax grab.
In many respects, UK taxpayers have never had it so good, so I can understand why advisers and their clients might be hesitant at even considering voting in a hardened socialist.
From a personal perspective, however enticing Labour’s policies might appear to be in the glossy brochure, I could never bring myself to vote for a man who stood for a minute’s silence to 8 IRA terrorists in May 1987.
Conservatives
Dennis Hall, director, Yellowtail Financial Planning.
Every Labour government has left office with unemployment higher than when it came into office. Over the last five or so decades the UK stockmarket has performed better under a Conservative government than a Labour government (almost twice as well).
Markets and investors will do better under Theresa May’s government than under Jeremy Corbin’s. Fact.
Yet the next government has the task of negotiating Brexit - a project of such magnitude that domestic policy could easily suffer through poorly thought through legislation.
The Tories are already on a well-trodden path, whereas Labour want us to lurch left and return to the 70’s. With each new opinion poll, currency and equity markets indicate which party they would prefer to see in office.
Tory policies want to create an environment that leads to higher GDP, which in turn will support government borrowing. Labour want to increase taxes and increase public spending, a route we’ve been down before and we know where that ended.
I anticipate fewer drastic changes from a Tory government, and whilst change would create demand for financial advice, it’s a distraction.
Advisers would prefer to help clients make good long term financial decisions working to a plan rather than reacting to change.
laura.miller@ft.com
