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Shock General Election announcement: industry reaction

18th April 2017

Following the Prime Minister's shock announcement that she is proposing a general election for 8th June, to be voted on by the House of Commons, the industry has responded - and many predict that a decisive result will bring stability.

With recent poll results suggesting a 21-point Conservative lead, many are welcoming the 'certainty' that a Conservative victory would bring.

John Phillips, Just Mortgages and SpicerHaart group operations directors, said:

“The forthcoming election is great news for the country as it gets much of the uncertainty out of the way.  With a weak opposition Theresa May will undoubtedly win and it means that she can go into the Brexit negotiations knowing that she has the weight of the country behind her.”

Richard Pike, Phoebus Software sales and marketing director, agreed, noting: “Hopefully this will result in less unease around Brexit in the publics’ eyes which can only be a good thing for our industry.”

On the potential of the election to have an impact of homebuying activity, Yorkshire Building Society economist Andrew McPhillips said: "The housing market is going through a sluggish period at present and a General Election adds to the chances of it lasting longer. Homebuyers who are well on the way to making a purchase have traditionally not been put off by such surprise macro-events but those only thinking about it may decide to pause."

From those in the pensions sector there is the consensus that the campaigning period could bring pensions policies into focus, with Steven Cameron, Pensions Director at Aegon, noting:

“While Brexit related matters will clearly dominate June’s General Election, Political Party Manifestos could reopen other contentious issues including pensions, savings, taxation and the changing nature of employment. This could include the future of the state pension triple lock, which had looked safe until 2020, the shelved increases in self-employed National Insurance and the unfortunate ‘will they, wont they’ debate on pensions tax relief reform. Whilst revisiting these policy areas may not be a vote-winner amongst pensioners, higher rate tax payers, or the self-employed, the opportunity exists for all parties to set out their stall on these key issues, creating much needed longer term stability."

Royal London's Director of Policy - and ex-Pensions Minister - Steve Webb added that the move '[throws] pensions policy up in the air', with radical reform of things like pension tax relief much more likely if Theresa May's Conservatives win a larger majority.

He also expressed concerns over the imminence of the election, adding: " A key question is whether the parties will have time to put detailed plans in their manifestos or whether we will get vague promises of reviews with all the detailed work done after the Election. What is clear is that a new Government and a possible new ministerial team are likely to mean yet more unwelcome uncertainty over the future of pension tax relief.

"On the state pension, the Government has a legal duty (under the 2014 Pensions Act) to respond to the recently completed review of the state pension age by May 7th 2017. The prospect of an imminent election probably means an aggresesive timetable with twenty-somethings working into their seventies is off the table for now.   

"The triple lock on the state pension must now be up for grabs.  But the Conservatives face a tricky choice, now that Labour has pledged to retain the triple lock.   With inflation approaching 2.5%, the cost to the Treasury of the triple lock becomes relatively small. If the Conservatives were to decide to scrap the triple lock in the weeks before a General Election it would be a sign of supreme confidence about the likely outcome of that Election."

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