UK prepares for regime change tomorrow as Tory minister throws in towel

Two senior Conservative Party members have in the space of 24 hours effectively ceded the UK General Election taking place tomorrow 4 July, with first former home secretary Suella Braverman and then work and pensions secretary Mel Stride publicly stating that they expect the Labour Party to win.

Stride made his comments on the radio programme Today, where he said: "I totally accept where the polls are at the moment means that tomorrow is likely to see the largest Labour landslide majority - the largest majority that this country has ever seen."

According to the BBC, that suggestion would give Labour 492 seats in a 650 seat Parliament, but that such a margin is not reflected in the polling - notwithstanding the lead that Labour does have.

Braverman declared defeat in an article in the Daily Telegraph newspaper.

A further question facing the Conservative Party is whether it will even manage to retain status as the leading opposition party in the next Parliament.

Gambling data aggregator Oddschecker highlights the impact of the Reform party, which has been making significant strides in the polls in the last few weeks of the election campaign. As of 3 July, it shows data suggesting punters expect Reform to have more seats than the Conservatives:

• Labour
  Next UK General Election
  Most Seats
  1/10
• Reform UK
  Next UK General Election
  Most Seats
  100/1
• Conservative
  Next UK General Election
  Most Seats
  150/1

What could this mean for investors and wealth managers?

The FT has reported an increase in inquiries among UK based wealth managers by clients looking to sell assets such as property ahead of the election, given fears over changes to rates of capital gains or other taxes.

Labour has not explicitly ruled out raising CGT over the lifetime of the next Parliament, whether for fiscal reasons or wealth redistribution reasons. This is a point raised by the Institute for Fiscal Studies during the election campaign (https://ifs.org.uk/articles/parties-should-avoid-tax-pledges-they-may-come-regret) in which it has warned against all parties locking themselves into fiscal policy that forces poorer outcomes down the line.

Labour's manifesto promise reads: "Our fiscal rules are non-negotiable and will apply to every decision taken by a Labour government. This means that the current budget must move into balance, so that day-to-day costs are met by revenues and debt must be falling as a share of the economy by the fifth year of the forecast."

For business owners, the manifesto has explicitly ruled out raising the corporation tax rate for the duration of the next Parliament.

It states: "Labour will cap corporation tax at the current level of 25 per cent, the lowest in the G7, for the entire parliament, and we will act if tax changes in other countries pose a risk to UK competitiveness. We will retain a permanent full expensing system for capital investment and the annual investment allowance for small business. And we will give firms greater clarity on what qualifies for allowances to improve business investment decisions."

Such certainty may be of interest to investors in securities of UK listed companies, although on the other hand Labour are also promising to restructure so-called business rates linked to physical operations. These have been blamed for tax inequality between physical stores on high streets versus online only businesses in particular.

The Labour Party is also promising change in policy affecting areas such as industrial strategy, business investment, economic infrastructure, transport, small business, residential real estate and immigration.

However, it is also the case that political party minifestoes tend to be light on detail. For example, while Labour's identifies immigration as an area of policy change, it does not specify if and how this might affect the investor visa system.

As of 2 July, the polls showed the current aportioning of voter intention, including the average and the range: