For polling nerds, last night’s YouGov prediction of a big Conservative win was a defining moment of the campaign so far. The methodology used by the pollster was more successful than any other in predicting the result of the 2017 election. It correctly signalled a hung parliament while most surveys pointed to a Tory majority.

The main advantage of the MRP technique (multilevel regression and post-stratification, as you ask) is the size of the survey - 100,000 people questioned over seven days with the most recent answers given a higher weighting. The method also adapts results at a constituency level, taking into account local factors such as whether a seat is marginal.

In investment terms, it is the equivalent of a bottom-up, stock-picking approach rather than a top-down strategic view of the world.

Given the track record, the prediction of 359 seats for the Conservatives and just 211 for Labour (nearly as bad as Michael Foot managed in 1983) is significant. For the first time in the election campaign it makes sense to analyse the implications of a big Conservative win. Who would be the winners and losers?

Political implication

The biggest consequence of a Conservative majority would be that the withdrawal bill would be put to MPs again before Christmas and almost certainly passed. That would likely lead to Britain leaving the EU by the end of January.

Attention would then shift to the trade relationship between the UK and Europe and how realistic, or not, it would be to negotiate a satisfactory deal by the end of 2020. This is the end of the agreed transition, or implementation, period that Boris Johnson has committed himself to. Failure to get a deal by December 2020 could result in a no-deal Brexit which most economists think would be extremely damaging to the UK economy.

So, for investors a Conservative win would mean less uncertainty about when and if Brexit happens, but more uncertainty about what it might mean.

Personal finance implications

Given the yawning gap between the economic and financial manifestos of the two main parties, the next most important implications would be to people’s personal finances. The Labour manifesto has set out an ambitious £83bn spending programme, largely funded by increased borrowings and higher taxes for both companies and wealthier individuals.

The Conservatives have adopted a much more modest programme, with proposed spending of just £3bn (more on this here). Although, a planned cut in corporation tax has been shelved for now, it’s more of the same in most other regards.

Here are the key implications of a Tory win for your tax, investments, property and pension:


  • You can relax on the income tax front. Labour had promised a new 45% threshold at £80,000 and 50% at £125,000. Under the Conservatives, today’s bands remain unchanged: 40% at £50,000 and 45% at £150,000.
  • National insurance. There will be no rise under the Conservative’s ‘triple tax lock’ promise and a hike in the threshold from £8,632 to £9,500
  • Inheritance tax. Labour has promised to scrap the residence nil-rate band which allows a family home worth up to £1m to be passed on tax free. The Conservatives will keep this perk.


Again, when it comes to our investments, a Conservative win would broadly be seen positively.

  • Dividends: the current £2,000 tax-free allowance would be halved under Labour to £1,000 and the current 7.5%, 32.5% and 38.1% basic, higher and additional tax rates would be aligned with the new higher income tax rates and less generous thresholds. This matters to stock market investors but also to the 5 million self-employed in the UK, many of whom pay themselves through company dividends.
  • Capital gains tax: Another big change is proposed by Labour, with a big cut in the £12,000 tax-free allowance to just £1,000 and, again, an alignment of the CGT tax rate with income tax. As the current rates stand at 10% and 20% for basic and higher rate taxpayers (28% for property gains), the rise to as high as 50% is a dramatic increase. Entrepreneurs, who currently benefit from a 10% CGT tax rate when they sell a business, will breathe a sigh of relief if the Conservatives win and they dodge a potential five-fold hike in their tax bill.
  • Stamp duty: Labour also plans to extend stamp duty charges to include derivatives trades and purchases of corporate bonds and foreign exchange.


There’s little difference between Labour and the Conservatives when it comes to pension tax relief. The perennial concern that this fantastic savings perk will be watered down for higher-rate taxpayers seems to have been put on the back burner.  Both parties have noticed that older people are more likely to vote!

  • Both Labour and the Conservatives are committed to the other ‘triple lock’ which sees the state pension rising by the highest of prices, earnings or 2.5%.
  • The Conservatives have, however, promised to look at the taper of the pension contribution allowance which limits higher earners to putting £10,000 into their pension each year (a quarter of the £40,000 allowance for everyone else). This is a particular issue for the health service where higher-paid consultants have been caught by the new rules in an unintended consequence of the latest piece of pensions meddling.
  • Big potential losers from a Conservative win might be the so-called WASPI women in their 60s and 70s who are potential beneficiaries of Labour’s promise to spend £58bn compensating those who were not properly informed about changes to the state pension age for women that were introduced in 1995. Read more here.
  • Other potential losers are all younger workers who would benefit from Labour’s promise to freeze the state pension age at 66. The Conservatives have made no such commitment and the current proposal is for the pension age to rise to 68 for those born after 1977.


  • Owners of expensive properties that are likely to attract overseas buyers are potential losers whoever wins the election. The Conservatives have promised a 3% stamp duty surcharge for foreign buyers while Labour has vowed to impose a 20% levy.
  • Buy to let landlords will definitely prefer a Conservative victory, however, as Labour have promised to cap rent increases to the rate of inflation and to introduce open-ended tenancies.

Other measures

  • We have already covered the likely market impact of Labour’s proposals for companies. Read about these here. A Conservative win would be viewed favourably by stock market investors on the grounds that corporate taxes would be considerably lower and threats to expropriate company shares would be taken off the table.
  • For one other group, parents, it’s a mixed bag. Labour has promised to extend free childcare to all children aged two to four. For their older siblings, however, the news is not so good as Labour has vowed to end the VAT exemption on private school fees.

More on the election

Important Information 

The value of investments and the income from them can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.