Coronavirus - we're here to help
From how to access your account online, scam awareness, your wellbeing and our community we're here to help.

Skip to main content
  • Register
  • Help
  • Contact us
  • Log in to HL Account

Conservative Manifesto – companies and industry

Three pledges from the Tory manifesto which could impact investors.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

After a pretty revolutionary Labour manifesto, the Conservatives’ election pledges are far more modest. In fact it’s difficult to identify exactly what the party hopes to change – apart from ‘getting Brexit done’ of course.

Still there are a few titbits to interest investors. Any manifesto should be considered as a whole, and simply because a particular policy is good or bad for a particular industry, or group of shareholders, does not make it good or bad policy, that judgement is one for voters to weigh up for themselves.

Business rates

Business rates are a tax charged on non-residential properties. That makes it particularly burdensome on businesses that occupy lots of properties – things like high street retail, pubs and cinemas.

Along with higher staff and rental costs, business rates are one of the reasons high street retailers have found it so difficult to compete with online only rivals. One national warehouse only pays one set of business rates, whereas a network of shops around the country potentially pays hundreds of times.

The Conservative manifesto includes a commitment to a “fundamental review” of how the system works. However, the announcement is light on detail, and whether relief will apply to all retail chains or only smaller companies is as yet unclear.

Digital Services Tax

How to appropriately tax global tech businesses is a thorny issue parties of all colours are trying to resolve. The Conservative manifesto commits to a Digital Services Tax – although exactly how this would be implemented is less clear. One commonly mooted suggestion is to tax internet business on sales in each economy rather than profits.

Assuming the net result would be that the UK exchequer collects more tax then this would in all probability hit profits of major groups like Facebook, Amazon and Alphabet.

However, the UK is a relatively small market for these companies. The bigger worry for them would be that the UK paves the way for the EU or US to follow suit. Something to keep an eye on for big tech investors.

Corporation Tax

Perhaps the most significant announcement from an investor’s perspective is the decision to scrap a proposed cut in the corporation tax rate.

Corporation tax will stay at 19%, raising an additional £20.5bn in tax over the next four years. This means corporate profits are set to be £20.5bn lower than would otherwise have been the case, potentially denting dividend potential and reinvestment opportunity.

Read more of our general election coverage

All our latest expert comment in one place.

General election 2019

HL is not expressing a view on the merits or otherwise of any of the policies or any of the political parties, and nothing in this note should be taken to be an endorsement or recommendation of any particular party, candidate or policy.

Article image credit: REUTERS / POOL - stock.adobe.com

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Editor's choice – our weekly email

Sign up to receive the week's top investment stories from Hargreaves Lansdown. Including:

  • Latest comment on economies and markets
  • Expert investment research
  • Financial planning tips
Sign up

Related articles

Category: Markets

US election – will Biden or Trump be better for stock markets?

We look at the history of stock markets under the Republicans and the Democrats, and what a Biden or Trump win could mean for investors.

William Ryder

28 Oct 2020 3 min read

Category: Politics

US Election – an investor's guide

Who will win the US election, Biden or Trump? We take a closer look at the race for the White House and what all this could mean for investors.

Charlotte Walsh

23 Oct 2020 3 min read

Category: Politics

US election – how it works and what’s next?

The US General Election is around the corner. Here’s what investors can expect next.

George Trefgarne

14 Oct 2020 3 min read

Category: Politics

US presidential election – vice president picks and what it means for investors

As Joe Biden picks Kamala Harris as his vice president, Charlotte Walsh looks at the upcoming US election and what it means for investors.

Charlotte Walsh

19 Aug 2020 min read