Conservative Manifesto: An Edelman Briefing by Edelman

GENERAL ELECTION EDELMAN 18 May 2017

Emily is a former Conservative Special Adviser who served in both the Coalition and 2015 Conservative majority governments. Emily knows a thing or two about securing Tory victories in Labour heartlands, having ran the Conservatives’ 2015 General Election campaign in Wales, securing the best Welsh result for the Party in over thirty years. Emily has held a variety of roles in Conservative Party politics including at Conservative Party Headquarters, in Parliament and in Government. Emily Poole Associate Director

As an Associate Director at Edelman, Emily advises clients on Government policy and Conservative Party engagement.

THE CONSERVATIVE MANIFESTO “Forward, together”; the title of Theresa May’s manifesto, unveiled in Halifax this morning, was positioned not so much as a call to arms, but as the nation’s marching orders, directed by a leader who knows (and wants to make sure everyone else does) that she will remain Prime Minister on June 8th, come what May. It is the certainty of this fact (gifted to the Prime Minister, yet again, by the total absence of a credible opposition) that has buoyed May’s team to take risks. With a Conservative majority all but in the bag, the opportunity to move aggressively onto the offensive (by gleefully abandoning Conservative Party policy of all memorable decades) is worth it, if it allows May’s Tories to create history by ploughing effortlessly through previously impenetrable Labour heartlands. Radical reforms to social care, tax rises, abandoned promises on pensions and restrictions on businesses will all raise eyebrows amongst Conservative “lifers”. But nobody will be able to say that May hasn’t listened to her critics. In fact, she has in this manifesto, almost methodically, taken into account each of the main charges levied against the Conservative record since 2010 and sought to provide an answer to each. That may make some in the Party Membership uncomfortable, but it will undoubtedly make the torture of those Labour MPs who were wriggling uncomfortably in their seats this morning much more unpleasant, especially as they realise that they are about to be dethroned by their own policies. 1 May 2017

It is a nifty political trick that, so far, has blindsided May’s opponents, whose worst criticism of the manifesto pledges, at the time of writing, is that they wrote them first. It must feel encouraging when even the TUC is describing Tory proposals as “promising”. Yet for all the bravado and apparent confidence gushing from CCHQ like water from a broken pipe, don’t be fooled that Camp May is trouble free. Taking such a degree of artistic license with Conservative policy is a risk for the Prime Minister and the manifesto process has been duly divisive. One Cabinet Minister close to the pensions brief explained the tensions over several elements of the triple lock, in particular the decision to keep raising them in line with inflation given this is forecast to sky-rocket before long. Others warn of the perils of abandoning those policies that made the jobs miracle possible in the first place by binding employers with new taxes and restrictions. On Brexit there was unsurprisingly little. The Prime Minister wants the freedom to manoeuvre that is provided by a general mandate of support but she is also keen to defy expectations and be known for something other than being “the Brexit Prime Minister”. Either way, the message from Halifax this morning was clear. This will be no dull election, it will be a bloody battle in which, with victory assured, the Prime Minister’s prize is not merely achieving the Conservative majority that was so coveted just two years ago, but the number of red and bloody heads on sticks can be secured along the way.

KEY POLICY HEADLINES

WHAT IT MEANS FOR BUSINESS

IMMIGRATION In a break from past Prime Ministers of both parties Theresa May has emphasised the alleged impact of high net migration on community cohesion over its benefits to the economy. The manifesto promises to continue to bear down on levels of non-EU immigration to the UK, including by doubling the Skills Charge on firms bringing in non-EU migrants, and also makes clear that freedom of movement will end once we leave the EU. SOCIAL CARE A complex series of policy changes was announced in this area. In future, the value of someone's property would be included in the means test for receiving free care in their own home - currently only their income and savings are taken into account. The cost of such care would be subtracted from people’s estates after their death, with the first £100,000 of the estate exempt from such a clawback, regardless of the care costs accumulated – the state would bear these additional costs. The changes will mean that more people will effectively pay for their own care, albeit after death. TAX AND PENSIONS The pledge not to raise VAT, Income Tax and National Insurance has been scrapped, following the abortive attempt to raise national insurance on the self-employed in the Budget. The Government wants a degree more fiscal freedom and although the manifesto commits to deliver on the income tax cuts promised in 2015, and to hold VAT at its current rate, national insurance is notably absent from these pledges. The pledge to downgrade the Pensions Triple Lock to a “Double Lock” ensuring only that pensions rise with inflation or earnings, also creates fiscal breathing space. RIGHTS AT WORK Another key aspect of the manifesto is the extension of workers’ rights, especially for those in the ‘gig economy’ and creation of bereavement leave and leave to care for relatives. Companies will have to report on racial disparities in their wages and the provisions of the Equalities Act will cover people with mental health conditions. There will also be sweeping changes to corporate governance, including use of share buybacks, rules on company takeovers and compulsory publication of pay ratios of CEOs relative to the general public.

TWEET OF THE DAY Key thing about Tory manifesto. May is prepared to trade seats for political space. This is where May deserves credit. In the age of political populism, she's the antipopulist.

1 May 2017

ENERGY The cap on standard variable energy bills has been criticised by many in the industry, noting that such a measure may discourage new entrants and consumer switching, which would generally reduce competitive pressures in the industry – which most in the industry argue is the best way to reduce bills in the long term. The outcome of the new review into how to reduce the cost of energy while ensuring supply and carbon targets are met will be closely followed, though the manifesto makes clear it sees a role for offshore wind and fracking – but not onshore wind. RAIL The creation of a new passenger ombudsman and pledge to “review rail ticketing, removing complexity and perverse pricing” indicate the Conservatives will continue to undertake interventions in the rail market, although it is not a new departure given the previous manifesto pledged to cap rail fares for five years. With Labour promising to renationalise the industry, on the implied grounds that they will reduce fares, the industry will continue to face real pressure on fares from both main parties. SELF-EMPLOYED AND SMALL BUSINESSES The creation of new workers’ rights may disproportionately hit small businesses which often have less capacity to bear new costs. Such businesses will also be hit by the maintaining of the commitment to ensure the National Living Wage will rise to 60% of median wages by 2020, and stay there. The keeping open of the door to increases to national insurance is another potential challenge to small businesses, and the self-employed especially – in the latter case, the overnment may revisit the plan in the Budget to raise NICs on the self-employed. However, the promise to review business rates “to make sure it is up to date for a world in which people increasingly shop online” will be welcomed.