UK General Election 2017: what the Conservative manifesto could mean for your money
The Conservative Party has unveiled its 2017 General Election manifesto and there are a few surprising, and controversial, pledges.
The Conservative Party has unveiled its General Election manifesto in Halifax, West Yorkshire, ahead of the UK General Election on 8 June 2017.
As the party is ahead in the polls we’ve taken a look at what a victory would mean for you and your money.
You can read the full manifesto here.
Tax
Theresa May has pledged not to raise VAT, but hasn’t ruled out rises to Income Tax or National Insurance; giving her more room to manoeuvre should she need to raise extra cash.
David Cameron's ‘triple tax lock’, has caused trouble for Chancellor Phillip Hammond, who was forced into a U-turn on his plans to hike National Insurance for the self-employed earlier this year.
To soften the blow May has talked up the Tory party pledge to raise the Personal Tax Allowance to £12,500 and the higher rate threshold to £50,000 by 2020.
Wages
The Conservatives will increase National Living Wage to 60% of median earnings by 2020 and then in line by the rate of median earnings.
It has also pledged to put tighter controls on company pay.
Pensions
The State Pension ‘triple lock’, which ensures pensioner income rises by the higher of inflation, average earnings or 2.5% each year will be replaced with a ‘double lock’ in 2020.
The ‘double lock’ will mean the State Pension will rise by the higher of average earnings or inflation but will no longer be guaranteed to rise by at least 2.5%.
The Conservatives will also get tough on companies that neglect their pension schemes. It will give new powers to the Pensions Regulator to step in and issue fines.
Benefits
The Winter Fuel Allowance, which pays up to £300 to help pensioners with fuel bills – whether they need it or not – will be means tested.
The move will mean better-off pensioners will no longer get the benefit.
Currently the scheme costs £3 billion, but the Institute for Fiscal Studies (IFS) reckons the bill could be halved by moving to a means-tested system.
The money raised from the change is expected to fund health and social care.
All other pensioner benefits, including free bus passes, eye tests, prescriptions and TV licences, won’t be impacted for the duration of this parliament.
Social care
The Conservatives will tackle the rising cost of social care in England with new reforms to means testing.
The threshold for free social care will rise from £23,250 to £100,000.
Currently anyone with assets worth more than £23,250 must pay for the full cost of residential care. Those who don’t get costs covered by their local authority.
Under the Conservative proposals the value of assets would have to be £100,000 before they had to pay, but property would be included in the calculation for people seeking care in their homes.
It's estimated the move would make the Treasury more than £1.3 billion a year, which will go towards funding those that fall under the new £100,000 limit.
To soften the blow the Tories promise no-one will have to sell their home while they or a surviving partner is alive to fund residential or home care.
Instead, the money will be recovered later when they die or sell their home with £100,000 ring-fenced to be passed on to loved ones.
For more on the costs take a look at our guide: How to pay for the cost of care.
Household bills
The Conservatives have pledged to introduce smart meters to every households by 2020 and to introduce an energy tariff cap to protect those that stick with the worst deals from ‘abusive price increases’.
The manifesto stated: 'Energy suppliers have long operated a two-tier market, where those constantly checking for the best deal can do well but others are punished for inactivity with higher prices. Those hit worst are households with lower incomes, people with lower qualifications, people who rent their home and the elderly. A Conservative government will act in their interests.'
The ‘safeguard tariff cap’ will offer price protection to households that tend not to switch.
It’s reported that the policy could save about £100 a year for 17 million families, however, critics think the plan could push up prices for savvy households that do switch deals. Take a look at: Opinion: May’s energy price cap will hit savvy switchers.
Schools
The Conservatives will scrap universal free school lunches for infants and replace them with free school breakfasts for all primary children.
Children from low-income families will continue be able to get free school lunches throughout primary and secondary school.
It’s thought the move would save £650 million a year, which would go towards boosting school funding by £4 billion over the next parliament.
The Conservatives will also scrap the ban on new grammar schools.
Businesses
The Tories will conduct a full review of business rates.
It will also stick to its plan to lower Corporation Tax to 17% by 2020.
Deficit
The Conservatives have pledged to clear the deficit and balance the budget by 2025, three years later than the revised target set by former Chancellor George Osborne.
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The annual tax gap - i.e. The difference between the amount of tax which should be paid and what is paid is somewhere between HMRC's estimate (excluding underpayment by the likes of Google, Amazon, Starbucks and the likes of Philip Green) is £36 billion. If you factor in the likes of the big players like Google etc then the annual figure (based on OECD estimates etc) is more likely to be in the region of £115-120 billion. These are eye watering amounts of underpaid tax. The Panama papers were just the tip of the proverbial iceberg. David Cameron wasn't the only politician to benefit from such offshore trusts - Margaret Thatcher's £12m home was registered in a tax haven thus avoiding inheritance tax. We then get into a discussion here about who should or shouldn't pay for social care when as a country and as tax payers we are in effect being robbed by the wealthiest people who have continued to get wealthier under our low taxation regime (certainly the lowest in my lifetime). No government- Conservative or Labour has ever really tackled the big time tax avoiders - in fact haven't really bothered. The EU tried to stop the multinationals shifting profits and wanted more transparency but the current Conservative gov vetoed the EU's proposals. The current Labour Party is the first to have a firm commitment to tackling this scourge so no wonder our newspapers which are owned by billionaires are so hostile! I believe we can afford to pay for our elderly to have social care - after all the majority will have worked and contributed - and increasingly so. This is a mark of a civilised society. We are the 5th wealthiest country in the world and frankly if we can't look after our elderly who can?
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Social Care: Not everybody needs social care and not everybody goes into a care home. But in the great lottery of life you cannot predict if this is your fate. So you are unlucky if you need care as an elderly adult, you're even more unlucky if you've got a house because you'll have a lot of its value taken from you. And don't forget you'll be subsidising others in your care home who are Council funded - so you are treble unlucky. How can anybody regard this as being fair? We don't turn round to younger people who need looking after and say "if you've got assets use them to pay for your services" so why pick on the old and vulnerable? Social care needs to be paid for in the same why that other health spending is financed - through general taxation. And don't be fooled into thinking that the NHS is funded through National Insurance - only a tiny proportion of health spending comes from NI. So in my view we need to spend what it takes for people to have proper care in old age - how its financed is a different question, but given that income tax rates were a hell of lot higher in the 1950's -70's (standard rates either side of 40%) I think we are undertaxed at present, and the wealthy could pay a bit more. A 50% tax band for very high earners would be a start.
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Sarap has got it in one. My husband and I worked for 50 years/30 years respectively so that when I die (I am a widow) I could pass some of my assets to my family, friends, people who have dealt with me honorably in business and some charities and also so that I could enjoy my retirement. We were all told that if we worked hard and contributed to society by paying out taxes/N.I. contributions etc we would have the money/property (remember it is better to own your own home we were told) to pass on to our loved ones and enjoy the fruits of our labors. Well it no longer matters any more that we work because all the extra money over £100,000 from our properties and any savings will go to the Government to "pay for our care costs" (we have already paid over and over again). So what can we do about it? Well, perhaps it is time to sell my home and go and rent a property, buy whatever I want including a nice piece of gold or expensive painting or necklace to leave to my heirs....Sotherbys here I come !!!! To a certain degree I am joking of course but I now cannot blame anybody who would follow this policy. It would be interesting to know how many properties are now worth less that £100,000 - very few proportionally I think. Oh, and remember that all those who didn't work at all by choice will get everything for free. I had better hope that I die quickly from a heart attack rather than the long term care needed for something like Dementia, Cancer etc as only a quick death without requiring care will mean that you can pass all of your assets on to your loved ones (and before you say why not give it to them now, I might have done some of that already but we all need money to live and who can predict the future).
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23 May 2017