高盛：European ily_ UK—Fiscal Policy Pledges ocktake (berly)

Investment Rating - The report does not explicitly provide an investment rating for the industry or companies discussed. Core Insights - The UK is approaching a general election, with both Labour and Conservative parties presenting similar fiscal frameworks aimed at reducing the debt-to-GDP ratio within five years [2][7]. - Labour is projected to have slightly more fiscal space for new spending commitments compared to the Conservatives, primarily due to their higher anticipated tax revenues [3][15]. - The fiscal plans of both parties are expected to result in similar levels of borrowing, with marginal differences in demand implications estimated at around 0.1-0.15% of GDP [3][20]. Summary by Sections Fiscal Policy Commitments - Both Labour and Conservatives aim to reduce the debt-to-GDP ratio, with Labour's commitments potentially allowing for an additional £4.7 billion per year in spending through their 'Green Prosperity Plan' [3][18]. - Labour's tax policies are expected to raise approximately £8-9 billion more annually than the Conservatives, with specific measures including VAT on private school fees and reforms to the non-doms regime [13][15]. Taxation Differences - Labour's tax measures are estimated to generate around £7 billion annually, while the Conservatives plan to reduce tax avoidance by £6 billion [13][15]. - The total difference in tax policies between the two parties is around £8-9 billion per year, or 0.3% of GDP [13][15]. Spending Commitments - Labour has committed to significant spending on public services, including NHS funding and recruitment of professionals, which could utilize much of their additional fiscal headroom [18][19]. - The Conservatives have made limited spending commitments, with plans to raise defense spending to 2.5% of GDP by 2030, funded by cuts in other areas [19][20]. Implications for Demand - The report suggests that Labour's slightly higher tax and spending commitments could lead to marginally stronger demand, estimated at 0.1-0.15% of GDP [3][20]. - The fiscal impulse model indicates that public investment has a higher multiplier effect compared to taxation, which may influence demand dynamics [20][23].