Gap between Tories and Labor narrows
While the U.K. is heading to general elections, investors are closely following the different polls regarding the results of early elections. It was widely held that early elections would bring U.K. Prime Minister Theresa May an easy landslide, however, it seems that the gap between the Conservatives and Labor is narrowing in recent weeks. If the participation rate is similar to the EU referendum with 30 percent more voting participation from young people, the elections could bring a different picture than anticipated.
Previously May stated that she would not take party in traditional election debates on TV preferring to stay out of any debates, discussions and only secure the support for her strong and stable leadership. However, Labor party leader Jeremy Corbyn is using social media effectively to reach a young audience, which could swing the election results.
According to a recent poll of Survation, the Conservatives’ lead has halved compared to a week ago. The polls show that Labor has slashed the Conservatives' lead by nine points (Conservatives on 43 and Labor on 34) in the latest opinion poll following the main parties' manifesto launches.
The manifestos of two main leading political parties differ in that the Conservatives are mainly focused on cutting down immigration to “tens of thousands” while Labor underlines the need for more NHS funding. However, the Conservative Party pledges that NHS spending would reach an extra £8 billion per year by 2022/23 and promises the scrapping of the triple lock on state pensions after 2020, replacing it with a "double lock", rising with earnings or inflation.
According to the Conservative manifesto, nearly £4 billion will be pumped into schools by 2022 and net migration will be cut to below 100 thousand. However recently speaking to Newsnight on BBB, Defense Secretary Michael Fallon said the Conservatives have not yet calculated the cost of cutting down the net immigration to ten of thousands.
In response to the cost to the exchequer to get immigration down by two-thirds from its current level, Fallon said, “we haven’t set out a formulation of how much it’ll reduce by each year, what we’ve set out is our ambition to continue to bear down on immigration.”
According to the Labor party manifesto, there will be important changes in taxation hitting 1.2 million people earning over £80,000 with rises in income tax. A proposal has been made to reduce the threshold of 45 percent rate of income tax down from £150,000 to £80,000. Earnings of £19.4 billion are promised by raising corporation tax to 26 percent - a rise of more than a third.
According to the manifesto, Labor "accepts the referendum result" - the desire for the Brexit, and intends to build a close new relationship with Europe "not as members but as partners" by retaining benefits of the single market and customs union. Negotiations for "transitional arrangements have been made for the end of Article 50 to avoid a "no deal" option and a cliff-edge scenario in line with the party manifesto. The party also pledges more than £30billion of extra funding for the NHS through increased income tax on top 5 percent earners, increased tax on private medical insurance and the halving of management consultants' fees.
In the coming days' countdown to the elections, all parties will try to attract “undecided voters.” Therefore, polls, despite their unpredictability, will be the focus of attention.