Brexit, simplified taxes, immigration, investment in infrastructure, ultimate beneficiaries and growing the skills base; these were among the election issues discussed when three Thomson Reuters UK experts considered the options on offer for British business in the Conservative, Labour and Liberal Democrat manifestos.
Thomson Reuters pulled together a panel of industry experts to consider the implications of the election choices in a discussion: “What business needs to know” ahead of the General Election on Thursday 8th June.
Quizzed by John Sinclair Foley, the EMEA Editor of Reuters Breakingviews, the three panelists considered the proposals in the three parties’ manifestos and how they would impact British business. The panel included:
- Nick Callister Radcliffe, Vice President of Thomson Reuters Legal business
- Andrew Yuille, the Head of Head of Risk Business Solutions for Thomson Reuters UK
- Laurence Kiddle Managing Director of Thomson Reuters Tax & Accounting UK business
View the full discussion in the video above, or see the rundown of their insights for British businesses below:
“Some of the proposals are helpful to the consumer; some of the proposals around ultimate beneficial owner; we’ve seen that already with trusts, but looking further into organisations and companies. Directionally good, there is some adjustments around the way that law enforcement will work in complex serious frauds and crime, so on the enforcement side of the regulation.” -Andrew Yuille
“If you look purely at tax on this, you’re almost going back to the 1980s and the ideological battles we saw back then. Where there’s a Conservative Party that is fixed on headline corporation tax rate of 17%; which would be the lowest of any large developed country within Europe, one of the lowest in the world. You’ve got the Labour party looking to take the corporation tax back to 26%, which while still the lowest in the G7, is substantially higher than other major economies. And the Lib Dems somewhere in the middle. So it does feel very much back to the 1980s.” -Laurence Kiddle
Migrant caps that could include the young or students
“If you don’t have that flow of talent and skills, then that curbs the innovation and it’s going to take a long time to get the UK’s skill base up to the level where it needs to be at. It needs skilled people from outside.” -Nick Callister Radcliffe
“Bringing very bright young graduates into the country doesn’t just help entrants to the workforce, it stimulates those around them as well.” Laurence Kiddle
Increased regulation for companies
“Can companies deal with it? Yes, because they have been and we’ve seen that ramp up. They will just take on more cost; there’s not a lot of shareholder value in this effort. There’s no benefit generally to the individual customer; the product isn’t better. There’s more transparency arguably.” -Andrew Yuille
Ensuring Britain remains competitive in the world
“On the one hand you’ve got a Conservative Party which is saying, we’re open for business, we want inbound investment; the tax rate is a big part of that, not the sole part by any means. On the other side, you’ve got Labour really saying companies need to pay their share, they take a lot of education. They take a lot of educated people into the workforce, and the money for that has to come from somewhere. It’s ideological, we haven’t seen that for some time.” -Laurence Kiddle
“There will be a decision for multinationals over the next couple of years, as to whether they want to be here or not. And that is different potentially to any previous election.” -Andrew Yuille
Britain’s place as a base for companies to do business with Europe and the world
“I’m certain that businesses will wake up the day after the election and say ‘What does this mean for us moving forward? Do we move to Dublin? Do we move to Frankfurt? Is the UK the place we want to use as our beach head in Europe?’” -Andrew Yuille
“Bluntly, the Labour manifesto seems to locks us largely where we are. You see things in there around keeping high street banks, in our world where we see a vibrant FinTech coming within the UK. That seems counter-intuitive. I like in there the idea of the Post Office becoming a bank, I thought it was there already, but if we’re going to have a bank on the high street then that seems like a good place to have it. There are some interesting things I the Lib Dems manifesto around investing in digital skills, coding remaining on the curriculum; looking at what a digital economy looks like in 2030. There’s only a sentence in there, but directionally, that’s quite interesting.” -Andrew Yuille
The skills gap
“The young are the lifeblood of this. In making sure we get the good supply of young people coming in; who are the entrepreneurs; who are the techies, who are going to grow businesses that I think is where we could lose out unless there is a focus on how we encourage young migration.” -Laurence Kiddle
“The Labour Party are looking to overhaul financial regulation yet again to try to split the banks into investment and retail banks.” -Nick Callister Radcliffe
Encouraging the financial services sector
“The Labour Party actively discourage this. There are two measures on tax rates specifically; the first is the reintroduction of the 50% top rate income tax; there are higher rates in Europe, we acknowledge that, but it’s not an encouragement to take an extra 10% of your income. The other is an interesting proposal, for high net worth individuals with an income over 1 million pounds to publish their tax returns which works in some countries, in Scandinavia it’s fairly prevalent. But coming into an industry which is not used to doing that, to be compelled to do so could be difficult.” -Laurence
A Brexit trade deal
“The one difference I would call it is that you have one of the major parties saying: ‘There will be a deal; a deal is better than no deal’; you’ve got the other saying: ‘No deal is better than a bad deal.’ That doesn’t bring certainty, but it brings a certainty of approach.”-Laurence Kiddle
Could a trade deal be concluded in two years?
“Everything that I’ve read and seen suggests the answer is no. The one caveat to that which has been mentioned is if there is actual really good will and a real desire on all sides to do it, then it is theoretically possible. But I don’t see there being that kind of goodwill on both sides to do it in two years.” -Nick Callister Radcliffe
What’s in and what’s out of the manifestos?
John asked the panel if they had a favourite idea from all of the manifestos that they had reviewed; the panel’s favourites were:
- Reviewing and simplifying business rates, which was mentioned in the Lib Dem, and Conservative plans
- Digital investment from the Lib Dems
- Investment in transport infrastructure; roads, rail and air as mentioned in the Labour Party manifesto
- Willingness to grapple with some of the really big, long term questions like how to deal with an aging population; particularly around social care in the Conservative manifesto (although he noted that execution of this was far from perfect)
Finally, the panel were asked what items were not in the manifestos, but they wished had been included; their suggestions were:
- Reform of the planning system; which could be currently inhibiting development
- A plan to develop skills for the long term
- More investment in broadband
- Simplification of the tax regime, particularly around house buying and selling
Stay with Reuters for the latest on the UK General Election 2017 as it unfolds.