Global Arab Network | UK Election – Who would enhance the business environment

Translate this article to your language:

GANPublications

e-Publications

Add Site to Favorites

Add Page to Favorites

Make Homepage

Share This Page

RSS Feed

--------------------------------------------------------------------------------------------------------------------
| |

UK Election – Who would enhance the business environment

Thursday, 22 April 2010 15:20

The United Kingdom parliamentary elections will take place on 6 May 2010. Campaigners have never been more in the spotlight with novelty TV debates sparking national discussions and leading to surprising turns in the polls. This first general election following the economic crisis and expenses scandals is heavily weighed down by public mistrust of anything political. Poll figures even suggest that only 4% of the public believes in the tax plans set out by the parties and a mere 6% of the public thinks that the parties’ approach to cut the budget deficit is reliable. To restore public confidence in politics, the three major parties are rallying for support across the nation. Last week the Conservatives, Labour and Liberal Democrats released their manifestos and held their first public debate on national television.

The Liberal Democrats under Nick Clegg are the surprising contenders after Clegg’s strong performance in the TV debate aired last week. Labour under Prime Minister Gordon Brown is currently third in the polls and the Conservatives under David Cameron still lead the pack. However, a staggering 32% of the public would favour a hung Parliament over an outright victory for either Labour or the Conservatives. Should elections result in a hung parliament, it can be expected that the Liberal Democrats will favour a coalition with Labour over the Conservatives; this could offer the public an alternative to a traditional Labour or Conservative government. This turn of events would certainly illustrate the disparity of the UK election system that the Liberal Democrats have long campaigned to reform. With the gap between the three major parties narrowing, it is time to take a closer look at their viewpoints on government restructures, business and tax, transport and the environment, healthcare, immigration and foreign policy

Government restructure
All three major parties have understood that restructuring of the government is essential in order to regain the confidence of the British people. The Conservatives believe all ministers should receive a pay cut of 5% and a five year pay freeze, they further aim to cut the number of MP’s by 10%. Labour argues that cutting the number of MP’s will not benefit the public as neighbourhoods rely on their local MP’s. Instead, they favour an elected House of Lords and a 50% cut in House of Lords representatives. All three parties agree that a ‘power of recall’ should be instated to give all constituents the opportunity to sack their local MP’s in case of underperformance, a historical parliamentary improvement.

Business & Tax Policies
Both the Conservatives and Labour strongly focus on support for the business sector following the economic crisis but differ in approach. The Conservatives aim to stop increases to the National Insurance rate and stop any ‘tax rise on jobs’ when in Parliament. They aim to decrease spending by £6bn and centre their manifesto on regional reform through Local Economic Partnerships. They support new businesses through National Insurance incentives and easy access to loans. The Conservatives plan to give out 25% of government contracts to small & medium-sized enterprises (SME’s) and provide them with a National Loan Guarantee Scheme. The manifesto also mentions support to social enterprises and the set up of a Big Society Bank to benefit charities, co-operatives and non-governmental institutions; this will be paid for through unclaimed bank assets. The manifesto speaks of a public sector pay freeze in 2011, pushing forward the pension age rise, a cap on public pensions above £50,000 annually, no tax credits for families earning over £50,000 per year, and a reduction of welfare dependency. The freeze on council tax for 2 years is not guaranteed and will depend on sufficient savings of individual councils.

Labour plans to reduce the staggering UK budget deficit through taxation, public spending cuts and fostering economic growth. The party manifesto states that it will not raise basic, higher and new top rates of tax in the next parliament. National Insurance contributions will rise by 0.5% for anyone earning over £20,000 from next year. Labour expects to net £15bn in efficiency savings in 2010/11 and savings of another £11bn on governments overheads. Until 2013 the party will cap any public sector pay uplifts by 1%. The manifesto promises a £5bn spending cut and earnings of £20bn through asset sales. Labour will make an additional £500m in bank loans available to SME’s. The creation of a Future Jobs Fund worth £2bn will create 200,000 jobs, 25% of these jobs are targeted at unemployment hotspots. Labour plans to double the investment tax allowance to £100,000 to encourage investment and continues to support social enterprise hubs. Labour also aims to protect lower income families from extension of VAT on basic commodities such as food, books and children’s clothes.

The Liberal Democrats focus on cleaning up the City’s bad practices, the party aims to break up banks to get them lending again. They will also introduce a banking levy whereby banks given financial support will need to pay for received support. The Liberal Democrats expect to net £15bn in government savings per year. The party will introduce a pay rise cap of £400 for all public sector workers and aim to restore the link between income and state pension. Their manifesto promises to improve business throughout the UK with reduced reliance on the City. They will introduce Local Enterprise Funds and Regional Stock Exchanges to promote growth of local businesses. The manifesto further states that tax credits will be restricted and cuts in spending will not start until 2011/12 when the UK economy is better able to handle the cuts. Further tax plans include implementing a threshold for payment of income tax at £10,000 per year; the introduction of mansion tax on properties over £2m and a reform of local taxation w hereby the party will look into potential for scrapping council tax.

Transport & the Environment
All three parties plan to improve the railway network throughout the UK. Both the Conservatives and Labour mention a high speed rail connection between the North and South of the UK. Labour also believes motorways should be widened. Interestingly, the scheduled third runway at Heathrow is only supported by Labour, both the Conservatives and Liberal Democrats are opposed to this plan. The Institute of Directors has declared that the Conservatives have made a big mistake not supporting the build of this third runway. The manifestos of the Liberal Democrats and Conservatives further indicate that London airports Stansted and Gatwick should not be extended by a second runway. Labour and the Liberal Democrats promise that 40% of electricity will come from low carbon resources by 2020, the Liberal Democrats aim at 100% low carbon electricity by 2050. Labour also pledges to create 400,000 new green jobs by 2015 and will provide energy discounts for pensioners. The Liberal Democrats promise not to build new nuclear power stations.

Foreign Policy & Immigration
There are distinct differences between the three major parties when it comes to their stance on European cooperation. The Liberal Democrats make it clear that they are keen to collaborate with Europe and create a strong EU as a powerful entity against the US and China. In their manifesto they state that they aim for stricter international regulation of financial services and banking. The Liberal Democrats also aspire to cooperate with other EU members in establishing a low carbon economy in Europe. Labour takes a more cautious approach and 13 years of Labour in power reveals that maintaining the UK’s sovereignty is crucial to their policy. While they are willing to work together with the EU, Labour will not surrender more control over the UK’s regulation to the EU. The Conservatives desire more protection of the UK and intend to regain national control over social and employment legislation.

The issue of immigration has parties divided again. All three parties recognize that illegal immigration and unemployment of UK citizens are real issues to be tackled. They agree that the Border Force should gain police level powers. Both Labour and the Liberal Democrats plan to implement entry and exit controls on Visa’s. Furthermore, the Liberal Democrats plan to tackle immigration problems regionally, only employing immigrants in the regions where they are needed and only if the work cannot be done by someone from the UK. They also intend to controversially review the status of illegal immigrants and provide them with a legal status if they have been in the UK for 10 or more years, speak the English language and have a clean record. The Liberal Democrats aspire to establish an EU-wide asylum system so that responsibilities are shared between member states. Their manifesto speaks of establishment of an independent agency to take care of asylum seekers rather than the Home Office. Under a Liberal Democrat government asylum seekers should have the right to work to make them less dependent on government handouts.

Labour believes the UK should create a points system similar to Australia where immigrants from outside the EU can only come to the UK for work if they qualify. This should help prevent unskilled migration from outside the EU. Labour believe their policies on migration have been effective, the number of asylum seekers is down to early 1990s figures and the cost for the taxpayer has been cut by half over the past six years. The Conservatives believe there should be a cap on immigration, limiting the number of immigrants coming to the UK every year, this has been heavily criticized.

Both Labour and the Conservatives have supported the sending of British troops to Iraq and will continue to support the Afghanistan mission in order to create stability in this region. The Conservatives further emphasize their desire to create stability in Pakistan. Labour consider their commitment to defence non-negotiable. The Liberal Democrats state that they are critical supporters of the mission in Afghanistan and their goal is to stabilize the region enough to pull out by the next parliament. They also guarantee no military intervention in Iran. The Conservatives indicate that they will support any international efforts to prevent Iran from obtaining nuclear weapons. None of the parties speak of savings that could be made to the defence budget should the British troops pull out completely from Afghanistan during the coming parliament.

Party Values
What sets these two party manifestos apart is not so much the actual content but the values behind its content. The Conservatives preach ‘power to the people’ while Labour’s ‘activist industrial policy’ suggests continued and more intervention in the public sector. The Liberal Democrats focus on re-evaluating the importance of the City to business in the UK, increased collaboration with Europe, the environment and global social responsibility.

Most items in the Conservative Party manifesto advocate a change in control from central government to local authorities. According to Party leader David Cameron the state should not micro-manage public services and the citizens of Britain should take social responsibility. The party aims at giving the public the power to set up their own schools and rate their own doctors and hospitals, as well as take care of their own health records. The NHS should also open up to voluntary sector providers. He does rightly warn that not everyone in the UK will get a uniform service. This endangers equality and by all accounts seems a costly and laborious affair.

The Labour Party manifesto clearly promotes central control over choice, claiming that state intervention has saved banks and prevented an economic collapse. Labour favours government guarantees on education and healthcare over improved excellence by giving more authority to individuals.

The Liberal Democrats see the value of a regional approach but also focus on the UK’s place on the global stage. Besides their pro-European stance, the party promotes increasing the UK’s contribution to the UN aid budget to the target figure, cancellation of unpayable debts and the creation of a Global Fund for Social Protection. The party also guarantees no military intervention in Iran.

Global Arab Network

This report produced by The Egyptian-British Chamber of Commerce – London.

Add comment

The opinions of the authors in articles published are theirs alone and do not necessarily reflect the views of Global Arab Network
------------------------------------------------------------------------------
Published comments are the opinions of private individuals and do not reflect the views of Global Arab Network