When politicians talk about the economy, they often throw around words and phrases like “inflation” and “interest rates”. While these things are intrinsically linked to our personal finances, it can sometimes be hard to cut through and understand how changes to these major economic indicators will actually affect us day-to-day. With a cost of living crisis still raging, most of us just want to know when our food and household bills will go down and what we can expect to happen with our rent or mortgage.

With so many people in the UK struggling with the cost of living at the moment (the Financial Conduct Authority reports that three in 10 people in the UK are not coping financially, while a study by the Joseph Rowntree Foundation found that almost 4 million people are “destitute”), it’s no surprise that the economy is a key campaigning point for political parties ahead of the general election on 4 July. 

But just what are the respective parties promising – and what will it mean for your finances? 

None of the parties have released their manifestos yet, but they have started commenting on their promises to the electorate ahead of the election. After studying what the Conservative, Green, Labour and Liberal Democrat parties have said about their plans for the economy so far, Stylist breaks down exactly what each party has promised to date.

The Tories are campaigning for another term in government after being in power for 14 years, and have set out some of their economic goals. 

While the party’s full manifesto is yet to be announced, details so far include plans for income tax. While appearing on the Today programme on 30 May, Chancellor Jeremy Hunt was asked about income tax, which is already due to go up for many people until 2028 due to the thresholds being frozen (meaning as people are paid more, their income tax increases). Hunt said the thresholds will “stay for their allotted time period” but said the Tories would not continue the threshold freeze beyond that date, and says the Conservatives would not increase income tax rates beyond current levels. 

Little has been announced on the Conservatives’ housing policy yet. The party stated in its 2019 manifesto that it would deliver 300,000 homes a year by the mid-2020s, but this target has not been met. When it comes to people’s personal finances, the Tories’ focus during this election campaign seems to be on pensioners. They recently promised a “triple lock plus” policy that would keep the current triple lock for pensions in place (ensuring that the state pension rises in line with whichever is the highest – average earnings, inflation or by 2.5%), while also increasing pensioners’ personal allowances by at least 2.5%.

Labour is expected to win the next general election, according to most recent polls, and Keir Starmer’s party has made the cost of living crisis a clear focus in its campaigning.

Announcing its “first steps” should it get into power, Labour put economic growth as its number one priority. So far, it’s promised tough fiscal rules (which it says will create a climate for low inflation), “well paid jobs” (no quantifiable amount for this is given, but the party says it will invest in sectors like science, tech, finance, clean energy and creative fields) and a “living wage” (again, no amount has been set for this). The party has also said that it will end zero-hour contracts and fire-and-rehire practices.

When it comes to housing, Labour says it will deliver 1.5 million new homes across the country, with first-time buyers getting “first dibs”. For renters, deputy leader Angela Rayner said the party would “ban Section 21 no-fault evictions for renters” in an interview with the i newspaper in November 2023.

The party hasn’t announced many plans for household bills yet. But it has said it “will switch on Great British Energy, a publicly-owned clean power company” – paid for by a windfall tax on oil and gas giants – “to cut annual energy bills for good”. It has also promised to “insulate millions of homes”, a step it claims will “[make] families up to £800 better off a year”.

The Liberal Democrats centre their promises for the next general election around a “fair deal” for everyone. As far as the economy is concerned, the party has said it will invest in infrastructure, innovation and skills to create “good jobs” and prosperity (although there is no indication yet as to exactly what the party considers a good job). 

The Lib Dems have also said that their plan for alleviating the cost of living crisis will be funded by a “one-off windfall tax on the super-profits of oil and gas producers and traders”. But their biggest focus is on tax, with the party setting out ways it would work to overhaul the tax system in the UK. 

It has promised to clamp down on tax avoidance and evasion and narrow the tax gap (the difference between the amount of tax that should be paid to HMRC, and what is actually paid) to help boost income for lower earners. The Lib Dems also say they would give HMRC more resources to properly tackle tax fraud, which they say “has cost the tax payer millions under the Conservatives”.

Similar to the Liberal Democrats, the Green party’s economic policy focuses strongly on tax matters. It has pledged to provide an unconditional basic income (where every adult receives a set amount of income regularly)  to secure basic social security and introduce a new consolidated income tax. The party says these steps will help establish a “simpler and fairer system of individual income taxation and social security support”.

Naturally, the Greens’ economic plans are also intrinsically linked to environmental issues. When the party published its economic policy, it said it will “promote the emergence of an economic system which recognises the limits of, and is compatible with, both the natural systems of the planet and the aspirations of the whole of humanity”.

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