What will a Conservative government mean for your money?

The Conservatives have won the 2019 election, so what did the party offer voters and what will it mean for your personal finances?

We highlight eight key promises relating to your pocket, now the result is in and we know Prime Minister Boris Johnson will have a solid majority to enact his agenda.  

Tory majority: Prime Minister Boris Johnson delivers a victory speech to supporters following the election results

1. Tax: NI threshold to rise to £9,500, and then £12,500

The Tories have issued a triple pledge on tax: they will not raise income tax, National Insurance or VAT in the next parliament.

The party also promises a tax cut for 31million workers, by raising the National Insurance threshold from £8,632 now to £9,500 next year. That’s worth about £104 to someone on £25,000 a year.

The personal allowance for income tax is already £12,500, and the manifesto declares: ‘Our ultimate ambition is to ensure that the first £12,500 you earn is completely free of tax – which would put almost £500 per year in people’s pockets.’

The Conservatives also plan to forge ahead with a digital services tax, which will slap a 2 per cent levy on the revenues of large search engines, social media platforms and online marketplaces derived from UK users (above the first £25million) from next April.

2. Pensions: Tax fixes for low-paid workers and high-earning doctors

The Conservatives say they will keep the triple lock – which guarantees state pension rises of at least 2.5 per cent – the winter fuel payment, the older person’s bus pass and other pensioner benefits.

They also promise a comprehensive review of how to fix a tax anomaly which sees workers, mostly women, earning between £10,000 and £12,500 lose pension top-ups automatically paid to the better off.

The party has just come out with a one-year fix for the so-called ‘taper problem’, which sees doctors turn down shifts for fear of massive pension tax bills, and it promises urgent talks with the medical profession to solve the matter. 

But it falls short of saying it will abolish the taper, which pension experts believe is the only viable fix.

There is no sign of a rethink of the Tories’ stance on free TV licences for over-75s, which are due to be axed next summer. The party says they should be funded by the BBC.

3. Social care and NHS: Homeowners won’t have to sell up to meet bills

The heart of the Tories’ offer is a ‘guarantee’ that no one needing care will have to sell their home to pay for it.

They aim to make an urgent attempt to build a cross-party consensus, with this as a condition.

Previous attempts at reaching such a deal over the years have foundered, with proposals designed by government-backed experts ending up ignored or dropped. 

While a deal is being sorted out with other parties, the Tories will earmark an extra £1billion of funding every year for more social care staff, better infrastructure, technology and facilities.

The Tories have promised more money for the NHS and Boris Johnson appears to have found a magic GP tree with a pledge to get 5,000 more GPs and 50,000 more nurses (although it turns out 18,500 will be existing ones that don’t quit).  

4. Transport: Superbus networks, free hospital parking and filling potholes

The Conservatives have a bundle of policies aimed at easing journeys for drivers and other commuters.

They will extend contactless pay-as-you go ticketing to almost 200 more stations in the South East.  

Money offers: Prime Minister Boris Johnson launches the Tory manifesto in Telford, West Midlands

Money offers: Prime Minister Boris Johnson launches the Tory manifesto in Telford, West Midlands

The party also promises to invest in ‘superbus networks’ – aimed at creating low-fare, high-frequency services, starting next year in Cornwall – and electric buses, including the UK’s first all-electric bus town.

The Tories plan to make hospital car parking free for those in greatest need – disabled people, frequent outpatient attenders, parents of sick children staying overnight and staff working night shifts.

And they promise to launch the biggest ever pothole-filling programme.

5. Housing: Push for longer mortgages for first-time buyers

The headline-grabbing housing policy is a promise to build 300,000 homes a year by the mid-2020s – but this is not in fact a new policy and has been the Government’s target for some time.

How will the Conservatives pay for promises? 

Total spending proposed: £45.5billion (includes both ongoing and capital spending)

The Tories accused Labour of making pledges that will cost the country £1.2trillion over the course of the next parliament, suggesting that taxes would go up by £2,400 for every person, every year.

Their own spending plans meanwhile, are light on detail, with their costings breakdown suggesting that proposed tax cuts and public spending would outweigh revenue in the first two years of parliament, rebalancing in the third to take revenue above spending in 2022.

The money to pay for all their promises will be found from a combination of new and extended taxes.

These include a new tax on plastic packaging that will come into force in 2022, raising the health immigration surcharge to £625 and expanding it to all European Economic Area nationals, cracking down on tax avoidance and evasion further, and the big one, scrapping the existing proposal to cut corporation tax from 19 per cent to 17 per cent next year.

The Tories say that getting Brexit done will unleash foreign investment into the UK, but make no further mention of its financial benefits.

The party also promises to encourage a ‘new market’ in long-term, fixed-rate mortgages for first-time buyers, in particular for those with small deposits – similar to deals in America and Europe where 30-year mortgages are more normal.

However, experts within the mortgage sector have cast doubts on how successful such a scheme would be, citing a potential lack of consumer appetite for locking into a deal for so long, and asking what happens if someone fixes at too high a level during the interest rate cycle, and whether there will be exit costs.

6. Environment: Zero emissions by 2050, and cap on energy bills stays

The Conservatives have set a net zero carbon emissions target of 2050 – a target much further in the future than both Labour and the Lib Dems’ promises.

However, Boris Johnson says the party will do this without raising VAT, national insurance contributions or income tax.

The Tories also promised a ban on the export of plastic waste outside the Organisation for Economic Co-operation and Development group of developed nations in an attempt to ensure less plastic is dumped in the oceans.

On energy bills, the Tories say they will keep the existing cap, introduce new measures to lower bills, and give the Competition and Markets Authority enhanced powers to tackle consumer rip-offs and bad business practices.

7. Small business: More start-up loans, but a review of entrepreneur’s relief for those selling up

The Conservatives have declared the intention to make Britain the ‘best place to start and grow a business’, and unleash potential in terms of investing, hiring, exporting and growing following Brexit.

An increase of the Employment Allowance for small businesses will mean a tax cut for half a million small firms, while there are also plans to expand start-up loans following high take-up from women and BAME (Black, Asian and minority ethnic) entrepreneurs.

However, the party has proposed a review of entrepreneur’s relief. This perk reduces capital gains tax when you sell all or part of a business, and is highly valued by owners, particularly when planning for retirement.

Boom time: Tories say Britain’s businesses can unleash their potential in terms of investing, hiring, exporting and growing following Brexit

Boom time: Tories say Britain’s businesses can unleash their potential in terms of investing, hiring, exporting and growing following Brexit

8. Childcare: More money for childcare, including outside school hours

The Conservatives are to establish a new £1billion fund to help create more high quality, affordable childcare, including before and after school and during school holidays. 

Current childcare policies only cover three and four year olds in working families and amount to 30 ‘free’ hours a week. There’s also Tax-Free Childcare which offers qualifying parents up to £500 every three months (£2,000 a year).

Compiled by Tanya Jefferies, Sarah Davidson, Grace Gausden, Will Kirkman, George Nixon, Jayna Rana and Angelique Ruzicka.  

What else? Help for tenants, start-up visas, and no more tampon tax

We round up the rest of the key money pledges from the Conservatives:

– Continue the roll-out of universal credit, but do more to ensure it works for the most vulnerable

– Support the main carer in any household receiving the universal credit payment, to help those looking after family members, especially women

– Extend voluntary housing association Right to Buy schemes following a pilot in the Midlands

– Review new ways to support home ownership following Help to Buy’s completion in 2023

– Ban the sale of new leasehold homes and restrict ground rents to a peppercorn

– Abolish ‘no fault’ evictions for tenants and only require one ‘lifetime’ deposit which moves with the tenant

– Introduce a stamp duty surcharge on non-UK resident property buyers

– Establish a new £3billion National Skills Fund, and reform immigration to ensure businesses can find and hire the workers they need

– Freeze National Insurance for the self-employed and clamp down on late payments to businesses

– Introduce a ‘start-up visa’ to attract the ‘entrepreneurs of the future’ to start businesses in the UK

– Create an enforcement body to crack down on any employer abusing employment law, including taking workers’ tips or refusing them sick pay

– Abolish the ‘tampon tax’, a 5 per cent VAT on sanitary products, after leaving the EU

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