The manifestos at-a-glance: how will they impact your finances?

16 April 2010

This week has seen the three main political parties release their manifestos and policies. But what will the parties’ plans mean for your finances?

We’ve recapped as to what will happen to taxes, banking, families and property under a Labour, Conservative or Liberal Democrat government.


Labour has pledged not to raise income tax and promised not to extend VAT to food, children's clothes, books, newspapers and public transport fares.

From 2010 a "toddler tax credit" would provide an additional £4 a week for families with one and two-year-olds who earn less than £50,000 a year.

However, Labour intends to increase national insurance contributions by 1% in April 2011 for people earning more than £20,000. NI contributions from employers will be raised for everyone earning more than £5,700.

Under Labour the inheritance tax threshold would be frozen at £325,000 until 2013 and capital gains tax would be cut for entrepreneurs.

Key tax policies in the Conservative manifesto include reversing most of the government’s planned NI rises by limiting the rises to those earning more than £35,000 a year.

However, it would keep the 50% income tax rate for those earning more than £150,000 a year for the time being.

The Conservatives will also freeze council tax for two years, scrap Labour’s phone tax and prevent high earners from claiming tax credits.

The Lib Dems have promised a “tax overhaul”. This will include making the first £10,000 of earnings tax-free for low and middle-earners. The move, the party says, will take 3.4 million low earners out of tax altogether.

The £17 billion tax cut would be paid for by raising capital gains tax, cutting pensions relief for high earners, increasing aviation taxes and by a "mansion tax" of 1% on properties worth £2 million or more.


The Labour party will turn the Post Office into a “People's Bank”, with an extended range of competitive products.

In the pre-election Budget, it also announced that everyone would have the right to a basic bank account and it would be made easier to switch banks and accounts.

The Tories plan to introduce a new Consumer Protection Agency (CPA) to take over the Financial Services Authority’s consumer protection role. The CPA would have powers to define and ban excessive borrowing rates on store cards and introduce a seven-day cooling off period for store cards.

There would also be free national financial advice service funded through a new social responsibility levy on the financial services sector.

The Lib Dems’ manifesto includes measures to ensure banks can't charge customers unfairly for going over their limit or bouncing a cheque. They would also cap interest rates charged by credit cards and store cards.

Under the Lib Dems banks would be broken up into retail and investment sections and the party would introduce a banking levy to pay for the state support they have received. Northern Rock would be turned into a building society.


Under Labour fathers would also get four weeks’ paid paternity leave, double the existing leave.
The free nursery place scheme would be extended to two-years olds who will get 15 hours a week of free nursery education.

To tackle unemployment, every young person would receive guaranteed education or training until the age of 18.

Child trust funds (CTFs) would carry on under Labour but a Conservative leadership would cut contributions to those households earning more than £16,000 a year.

The Conservative party will also stop paying tax credits to families with an income of more than £50,000.

Under the Lib Dems, parents would be able to share parental leave and it would be extended to 18 months over time. Fathers would also have the right to attend ante-natal appointments and grandparents to request flexible working.

Every child from the age of 18 months upwards would receive 20 hours of free childcare. However CTF payments would be reduced.


Labour announced in the Budget that it would increase the stamp duty threshold from £125,000 to £250,000 for first-time buyers for the next two years. There would also be a new 5% rate of stamp duty for property transactions over £1m from April 2011

The Conservatives plan to cut stamp duty permanently for first-time buyers and it will be easier for social tenants to buy homes.

The Liberal Democrats would introduce a 1% "mansion tax" on properties worth more than £2 million.

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