Whoever wins the election will have to make some very tough choices about public spending and rates of taxation, because the UK has borrowed huge amounts of money to prop up the banking system in the last two years, and with the drop in economic activity in business and increased unemployment, the country now spends more than it receives in taxes and other income.
For students, the tough economic environment has meant a fewer jobs for young people and graduates at a time when student debt is increasing. The parties will be offering various solutions to this problem for you to consider.
But the election will also be about what sort of economic future the country wants. In the last two decades, financial services have been a major contributor to the economy, but also a major cause of the recession, and politicians will debate how we balance the benefits of that sector with the risks. They will also discuss whether the economy should have a greater emphasis on manufacturing, or on the service or cultural industries, and whether or not we should we incentivise 'green' jobs that develop sustainable technologies for the future.
So for anyone thinking about what they want to be doing in five or ten years' time, the decisions taken by the electorate on May 6 will be critical.
Conservatives
Aim to eliminate "most" of the UK’s structural deficit within five years; spending cuts in all areas apart from health and foreign aid; Bank of England to supervise banks; push for an international agreement to stop banks engaging in large-scale trading using their own money; raise Inheritance Tax threshold to £1m; scrap Labour’s planned 1% national insurance rise for people earning less than £35,000; scrap Stamp Duty for first-time buyers on homes up to £250,000; cut headline rate of corporation tax to 25p or lower; cut civil service costs by a third over five years; publish online all items of government spending over £25,000.
Labour
Tackled economic crisis with fiscal stimulus, including VAT cut, infrastructure spending, stamp-duty holiday and car scrappage scheme; would halve deficit in four years; bailed out failing banks; introduced tax on bankers’ bonuses; will introduce new 50p income tax rate; increase National Insurance contributions by 1% from April 2011; abolish stamp duty for first time buyers on homes up to £250,000 for two years, and introduce 5% stamp duty rate for properties over £1m from 2011; freeze inheritance tax thresholds for four years; increase spending on "frontline" NHS services and schools but freeze or cut spending in other areas between 2011-2014; give Financial Services Authority bigger role in regulating banks, including power to block excessively risky contracts; reject plan to separate banks’ retail and investment arms.
Liberal Democrat
Supported Labour’s fiscal stimulus and bank bail-outs, but would have nationalised failing banks; identify and cut £15bn of "lower priority" spending to protect front-line services while eliminating structural deficit within five years; raise the threshold at which people start paying income tax from current levels to £10,000; align capital gains tax to income tax rates to prevent people from having an incentive to present their income as capital; ‘mansion tax’ on the value of properties over £2m; pay any young person completing an internship or work experience £55 a week for three months; separate banks’ retail and investment arms.
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