The Sale Season

There are a couple of certainties in British life. These include night following day, sales in July and January and tax being prominent in the party conferences preceding a general election.  True to historic form, the Labour party announced proposals which will increase taxes on the perceived wealthy and those who are felt to be able to pay to avoid it.  These promises were most relevant for the Mansion Tax and the Umbrella Company Regulations.  The Conservatives hit the headlines with ideas about reducing income tax for all.  This would be effected by increasing the tax free sums which can be earned and extending the 40p tax threshold.  They estimate these at a cost to the Exchequer of £7.2bn by 2020.  Even UKIP, not a party traditionally associated with conference headlines, managed to make suggestions about higher rates of VAT for certain goods.  In the tradition of  politics they then managed to perform a partial U-turn on this idea.

Assuming the election is a straight fight between Labour and the Conservatives then Labour will be elected with a manifesto of tax increases. They won’t have any reason to delay their implementation.  The Conservatives, however, have not been specific about the date for implementation of their proposals.  I can’t help noticing that their forecasting is to 2020 which, as luck would have it, is likely to be the following election.  The cynics are already suggesting that tax cuts will be stalled until immediately prior to a 2020 election and therefore, returning to the sales analogy, there is a buy one, get one free, election promise.  One announces a proposal prior to the 2015 election and then implements it prior to the 2020 election.  This generates votes in 2015 on anticipation of a change and votes in 2020 as the feel good factor of the implementation change is felt.  To prevent the Conservatives being subject to the cynics challenges they should announce the timing of their policy decisions.