On Thursday (12 December) this week, the UK holds what is widely considered its most momentous general election since 1979. An apparently stark choice faces the country: with the Conservatives, exit from the EU on 31 January 2020, and the prospect of the low-tax low spend ‘Singapore-on-Sea’ free market nirvana long desired by the most ardent Brexiteers; with Labour, the opposite: the possibility of remaining in the EU via a second referendum, and a plan for a state-inspired transformation of the UK’s economic model, including wholesale nationalisation of major public utilities, writes Nicholas Hallam, Chairman of Sovos Accordance.
Opinion pollsters currently have the Conservatives, with a ‘Getting Brexit Done’ campaign, comfortably ahead of Labour (by an average of about 10%). The current lead would translate into a majority of at least fifty seats. But then given the pollsters recent track record (failing to predict the Tory majority of 2015; the referendum result; Trump’s victory; and Theresa May’s electoral collapse in 2017) no one is confident of anything either way. Uncertainty reigns.
This is not, to put it mildly, an ideal situation for UK businesses. They have been generally circumspect about publicly supporting any of the major parties. As a result, there is much trepidation about every possible outcome.
Labour’s manifesto commitments, if implemented, would fundamentally alter the UK’s business landscape. There are very, very many proposals that concern commercial life. They include: increasing the top rate of income tax, and then aligning capital gains tax (CGT) and dividends tax to the new income tax rates – an effective hike in CGT from 20% to c.50%; increasing corporation tax from 19% to 28%; introducing collective sectoral bargaining across the UK economy; granting all workers full employment rights from their first day in role; requiring that there is a full consultation with all staff if management wish to bring in new technology; nationalization (at a price determined by Parliament) of the railways, water companies and BT Openreach.