Financial Preview 15/04/2015: UK General Election 2015, Thursday 7th May 2015

Manifesto mania has been the theme of the week, with the 5 major English parties all revealing their intentions if elected.

The Liberal Democrats pushed themselves as the most stable of the three potential junior coalition partners, whilst pledging to raise tax free allowance to £12500 and promising to invest £8 billion into the NHS with equal waiting between mental and physical health. However, Clegg’s refusal to answer more than one question from journalists was met with derision and spoilt what had, up until that point, been a strong if unspectacular launch. The Greens promised, unsurprisingly, to end austerity and ensure a living wage for all in the country, whilst pledged to halt the privatisation of the NHS and impose a ‘Robin Hood’ tax on the banks.

The most significant minor party manifesto launch was UKIP’s display in Essex. Labelling themselves as both the party that ‘believes in Britain’ and the ‘party of defence’, Farage trotted out the usual promises about a rapid EU referendum, a 5 year ban on unskilled migrant workers, and the intention to save £32 billion a year by scrapping HS2, ending foreign aid, ending the Barnett formula system and leaving the EU. They pledged to match the 2% of GDP defence spending stipulated by NATO as well as throwing some tax giveaways into the mix. UKIP were in dire need for this launch to go well, as their General Seats spread slipped to 3.5-5.5, its lowest point since the campaign began. However their manifesto contained little to change the mind of those who weren’t considering voting for the far-right party in the first place.



Whilst the smaller parties will have an undoubted part to play on May 7th, the main narrative surrounding these manifestos was the bizarro-world situation presented by Labour and the Conservatives. Labour used their manifesto, emblazoned with the now familiar ‘Britain only succeeds when working families succeed’, to focus on pushing the line that they are fiscally responsible, and have fully-funded policies that do not require any borrowing. There were few surprises in the Labour manifesto, which further outlined the party’s proposed non-doms reform, freeze on energy bills, and the pledge to cut the deficit every year.

The Tories, on the other hand, were keen to push their ‘Sunny Britain’ line whilst at the same time emphasising the chaos that lies behind the Labour curtain. Whilst many at the launch accused the Tories of trying to have their cake and eat it by stating the country is both on the precipice of economic disaster if Labour is in power yet enjoying the plethora of prosperities that the Tory government has created.

The Tories attempt at a shining manifesto star was their ‘right to buy’ plans for Housing Association properties. However, this scheme wasn’t the big voter-hug the Tories wanted, with Shelter calling it ‘another nail in the coffin’ for affordable housing due to the fact that the Tories have systematically failed to replace the houses sold under ‘right to buy’, whilst the National Housing Federation called it ‘unfair’ due to the scheme benefitting those already living in cheaper public housing over those in expensive privately rented properties. The party also announced some suspiciously Labour-like policies; Cameron announced that no-one earning minimum wage will pay income tax under the new Tory government, alongside offering 30 hours of free childcare to parents, worth around £5000 according to the Tory leader.



Overall, the two major manifestos were very different from each other, but not in the usual ways; instead these launches revealed what each party feels is their main weakness. Labour are keenly aware that people don’t trust them on the economy. In positioning themselves as the sensible, fiscally rigorous and fully-funded party, Labour struck a surprisingly Conservative tone, one that tried to compensate for the economic flaws that many in the electorate feel the party has.

In contrast, the Tories, especially after their non-dom struggles last week, needed to position themselves as the party of the many, not the party of the few. Their manifesto was the opposite of the Labour’s, filled with voter-grabbing (and expensive) promises instead of the usual Tory line of fiscal responsibility; however, the Institute for Fiscal Studies were thoroughly unimpressed by this tactic, stating that the Tories provided no substantial information on their proposed cuts.

The past week had seen a swing towards Labour in terms of betting, with their General Seats spread increasing to 271-276 as the week continued; however, since the announcement of their respective manifestos, the Tories has seen another betting surge, with their spread remaining unchanged at 282-287. Perhaps unsurprisingly, for the third week in a row the big change has not been in favour of one party or the other, but instead an increase in the binary Overall Majority spread, leaping from 81.8-88.9 last week to a current price of 84.6-91. It is increasingly looking like the faster the major parties try to run towards a majority, the more they remain stuck in the same minority place.