This is what each political party intends to do to the City
This time tomorrow, we'll probably be in a whole new political world. For anyone unaware, or deliberately deaf to each party's intentions for the City, we've summarised their proposals below.
Our own survey of eFinancialCareers visitors last month, found that two thirds of respondents thought a Conservative win would be best for jobs in the City. A hung parliament, which still looks likely, was considered by far the worst option.
In assembling the information below, we've drawn (heavily) on the Financial News's excellent interviews with Paul Myners, Vince Cable, and Philip Hammond.
The Conservatives
What they say:
"We want London to be the undisputed home of global finance and to ensure that Britain is competitive and open for business." And, bankers' pay has got "completely out of kilter" with the rest of society.
On the 50% tax rate:
It's not good for the economy, but they can't abolish it while they're also asking public sector workers to accept a pay freeze.
On the bonus tax and bonuses
The Conservatives didn't oppose the bonus tax. They mooted some strange suggestions for paying bonuses in newly issued shares.
Broader tax plans:
Inheritance tax threshold to be raised to 1m, no child tax credits and child trust funds for higher earners. Won't raise national insurance. Stamp duty threshold raised to 250k permanently.
On Financial regulation:
They want to defang the FSA and give responsibility for regulating banks back to the Bank of England. They'd appoint a single Treasury minister with responsibility for European regulation to fight the City's corner in Europe.
On Glass Steagall-style banking reforms
Yes, but only if it happens internationally.
On bank taxes and capital requirements
Bank of England would be empowered to impose much higher capital requirements on higher risk activities.
The Conservatives are keen on imposing a levy on banks' balance sheets. They think it should be imposed internationally, but are prepared to act unilaterally if necessary.
Labour
What they say:
"Having come through the worst banking crisis and recession in 60 years, it is only fair that the wealthiest contribute more than those on low incomes to reducing our deficit."
On the 50% tax rate:
It's here to stay.
On the bonus tax and bonuses
"Labour has emphasised throughout that this is a one off tax that will not be repeated. "
Broader tax plans:
Higher national insurance. No stamp duty on homes worth less than 250k for the next two years.
On Financial regulation:
Responsibility for regulating the UK banking system will remain with the FSA.
On Glass Steagall-style banking reforms
The Labour party is not in favour of splitting up banks, hiving off prop trading, or anything resembling a Glass Steagall-style rejigging of the British banking system.
On bank taxes and capital requirements
Labour supports the introduction of a 'Global Systemic Tax,' but only if it's agreed and implemented internationally.
Liberal Democrats
What they say:
"The UK financial services sector has dominated the European financial markets and the UK economy as a whole. It has been allowed to bring itself to the brink of destruction and, in the process dragged the entire UK economy down with it." And, "Bankers are pin-striped Scargills," who are, "holding the country to ransom." Or, "There is now a compelling case for a high pay commission to measure the claims of top earners that their rewards are justified and necessary, even if they offend natural justice and our sense of fairness. "
On the 50% tax rate:
The opposed it initially, but now that it's in place they say it would be hard to reverse.
On the bonus tax and bonuses
Not opposed to the bonus tax, although initially said it would be unworkable. Want to restrict cash bonuses to 2.5k a year, with the remainder deferred for at least five years - even if no international consensus. Want to publish the names and addresses of all banking employees earning more than 200k.
Broader tax plans:
'Mansion tax' on all properties worth over 2m; replacement of council tax with a local income tax. No income tax for anyone earning less than 10k. Pensions tax relief restricted to the basic rate of tax Personal allowance for capital gains to be cut from 10k to 1k, with capital gains taxed as income - ie. at anything from 20% to 50%.
On Financial regulation:
Plan to maintain the tripartite system of regulation, with the FSA responsible for banking regulation. Think that one Committee for Financial Stability should replace the three that exist currently.
On Glass Steagall-style banking reforms
Yes, all for them, even (it would appear) if no international consensus on this.
On bank taxes and capital requirements
Wants to impose a 10% tax on banking profits. Will act unilaterally.
