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Election 2024: Sunak to cut NI, keep help-to-buy

Published 11/06/2024, 14:30
Updated 11/06/2024, 15:41
© Reuters.  Election 2024: Sunak to cut NI, keep help-to-buy

Proactive Investors -

  • Sunak promises NI cut
  • LibDems focus on social care
  • What happened last week

Tories promise tax cuts and first-time buyer help

Rishi Sunak has put another cut in national insurance and promise to reduce immigration at the heart of the Conservative campaign to get re-elected.

Launching the Tory manifesto today, the Prime Minister said that his party would bring“ lower immigration, lower taxes and protected pensions”

Tax has already played a major role in the earlier skirmishes between the two main parties but the immigration element reflects the ground being lost to Nigel Farage’s Reform Party.

In the manifesto, Sunak said he would reduce national insurance by a further 2% following the cut to 8% from 10% in the last Budget having already cut it from 12%.

Stamp duty would be abolished for first-time buyers on properties up to the value of £425,000 with a new Help to Buy scheme also to help people at the bottom of the property ladder.

Stamp duty would be abolished for first-time buyers on properties up to the value of £425,000 with a new Help to Buy scheme also to help people at the bottom of the property ladder.

N Sea project dropped due to uncertainty

Away from rhetoric a reminder of things in the real world as Deltic Energy PLC (AIM:LON:DELT) (Deltic Energy PLC (AIM:DELT)) has withdrawn from the Pensacola project in the North Sea due to its inability to secure a farm-out or alternative funding solution.

The company cited ongoing fiscal volatility and negative political comments as significant challenges leading up to the July election, which damaged the proposition for potential new investors.

Despite exploring various funding solutions, including potential industry partners, equity capital markets, and strategic investors, Deltic determined that the only appropriate course of action was to withdraw from the licence before further liabilities crystallized.

Shell (LON:SHEL) is its partner on the project, which was seen as one of the best discoveries in the North Sea in decades underling the uncertainty currently surrounding the UK’s energy sector.

Last week, union Unite said it would not endorse Labour’s manifesto because it did not do enough to support workers’ rights and jobs in the oil and gas industry.

Monday: Taxes going up whatever, says Goldman Sachs (NYSE:GS)

Whatever the outcome of the election, the UK is facing big tax hikes, says a Wall Street heavyweight.

Goldman Sachs says such an eventuality is inevitable due to the losses caused by the Bank of England’s quantitative easing programme.

Higher borrowing costs due to the scheme will force the next chancellor (whatever her or his political colour) to raise taxes even more than expected.

Losses from QE will add an additional burden to what is already being forecast as a difficult time for the UK’s finances, argues the Wall St bank

Goldman notes that both the Tories and Labour have ruled out raising income tax, National Insurance, or VAT, so more ‘innovative’ ways will be needed to raise money with the freezing of tax, which both parties have said will occur for three years, likely to be just the start.

New flight and buyback taxes to pay for LibDems social care programmes

After some shadowboxing in the past couple of weeks, things are starting to heat up with the publication of the first major party manifesto.

It comes from the Liberal Democrats, which are targeting NHS, social care, defence, schools and childcare among the measures.

For the NHS and social care, a promise 8,000 more GPs and free personal care in England, costing £8.35 billion, scrapping the two-sprog limit on child benefit (£4.1 billion) and £3 billion for childcare and £2.2 billion for schools are among the headlines.

Paying for it will come from higher taxes on banks, increasing capital gains tax, a new aviation duty and a crackdown on tax avoidance.

And like the Tories and Labour, the LibDems will keep Jeremy Hunt's stealth tax measure of freezing income tax thresholds.

Starmer woos SMEs with business rate pledge

Labour has turned to wooing small businesses with the promise of an overhaul of the business rates system, one of the main gripes for shop-owners and entrepreneurs.

Keir Starmer said the Tories had failed to fix a system that has been out of kilter for a “long time”.

“We want small businesses to thrive because they are the backbone of our economy and they need that stability in our economy,” he said at a hustings event in London.

On business rates, he added: “We want to replace them with a system that works better, because at the moment there’s not a level playing field between businesses that are online and those that are sort of bricks and mortar.”

Labour would also accelerate the development of banking hubs and crack down on large companies paying invoices late, another bugbear for many small businesses.

Read more on Proactive Investors UK


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