Economy  

Labour vs Tories: who is best for your clients?

Labour vs Tories: who is best for your clients?

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.

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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.