Tag Archives: economy

Vince Cable

Vince Cable writes…Labour and Fiscal Rules

By Vince Cable | Wed 10th June 2026 - 11:55 am

The nation waits for the people of Makerfield to decide whether Keir Starmer will face a challenge from his most plausible and electable Labour critic. Were Andy Burnham to emerge victorious and to challenge for the party leadership, this would signal a shift to what is being called the ‘soft left’.

One of the most deeply held convictions of those in this political space is that the government is being held back from more ‘progressive’ policies by unduly restrictive fiscal rules which exist to reassure ‘the bond markets’ that the UK is a trustworthy, reliable borrower.

Andy Burnham’s position on the …

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Roz Savage MP

Liberalism in the age of AI: building an economy that liberates people

By Roz Savage MP | Thu 21st May 2026 - 11:19 am

For most of the modern political era, economic debate has revolved around one central question: how do we create more jobs?

But what happens when technology begins reducing the need for human labour just as our population is ageing and demand for care, health and support is rising sharply?

Artificial intelligence is already reshaping parts of the economy at extraordinary speed. Entry-level legal work, coding, administration, customer service and research are all changing before our eyes. At the same time, Britain is growing older. More people are living longer, often with complex health or care needs, while birth rates fall and traditional career structures become less stable.

Some see this future and respond with fear. Others retreat into nostalgia, promising a return to a world that no longer exists – if indeed it ever did.

Liberals should do neither.

This moment demands something far more ambitious: a redesign of the economy around human flourishing. Because the real question is not simply how many jobs exist. It is whether people are able to develop their potential, contribute meaningfully, live with dignity and freedom, and participate fully in society throughout their lives. That, surely, is what Liberalism has always been about.

Liberalism at its best is not an ideology of atomised individuals competing endlessly in a market. It is a philosophy of human liberation. It asks how we remove barriers that prevent people from becoming who they are capable of becoming.

That means equality of opportunity. It means lifelong learning. It means decentralisation of power. It means freedom from poverty, insecurity and ill-health. And it means recognising that worthwhile work matters not only because it pays the bills, but because contribution, purpose and dignity are fundamental human needs.

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Paul Reynolds

The Mandelson debacle – Implications, Part 2 (remedies)

By Paul Reynolds | Wed 29th April 2026 - 8:55 am

On 25th April 2026 I wrote in LDV about the longer-term political background to the Mandelson debacle, referencing his time on Lambeth Council and the rise of the anti-left in the Labour Party, alongside the formation of the SDP, which partially sprung from there (see yesterday’s Guardian article).

The main conclusion of the LDV article was that Mandelson’s political orientation was shaped by opposition to the far-left in the Labour Party, (reinforced by the militant left’s control of Lambeth Council in the 1970s and 1980s). Mandelson’s close colleagues then, such as the subsequently ennobled Roger Liddle, Matthew Oakeshott, and the late George Thomson (associated with BBC and ITV governance), not only opposed the far left, they also objected to Thatcherism. They particularly opposed those of the left and right who were sceptical of internationalism and EU cooperation, especially dissenters from the quasi-corporatist European ‘social democratic consensus’. Mandelson stayed in the Labour party to fight the left, but Oakeshott and Liddle joined the SDP, the latter, being close to Mandelson, rejoining Labour after 6 years.

This group, and many Labour colleagues, believed that the Labour Party would never regain power again if it remained under far left control, hostile to ‘right-wing’ mainstream media and the big business and finance organisations behind them. Being cosy with international business helped get PM Blair elected in 1997, and softened media scepticism towards PM Starmer in early 2024. However, in cosying up to big business and finance, attitudes to economic elites and oligarchs began to border on adulation.

But there is a serious policy problem. The last 19 years has seen a transformation of the world economy, since the 2007-8 financial crisis. The rise of the Chinese economy has occurred alongside the rise of ‘financialisation’ and concomitant authoritarian bureaucratisation in the West; leading to increasing economic concentration and ‘stealthy monopolisation’. Asset prices rise in a bubble, as long term economic performance in the ‘real sector’ declines, and Western governments ignore the fiscal & debt sustainability tsunami.

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Josh Matthews

A UK Wellbeing Economy: The start of a Liberal Democrat vision and plan

By Josh Matthews | Fri 17th April 2026 - 10:07 am

We are at our best, as Liberal Democrats, when we have radical vision, challenge the status quo, AND have the plan to match.

Too few people in positions of power truly realise just how deep the failing of the current economy goes. It does not work for too many people.

But the question is not just what a new economy looks like, but how we unpick the old one and move forward.

This article outlines how the Liberal Democrats could construct and communicate a plan for a Wellbeing Economy in the UK. You can find more detail on each of the seven steps below published recently at Critical Mass for Sustainability.

The next stage of economics must be a transition to an economy judged not only by GDP, but by whether people can access care, find fulfilling and secure work, access a thriving local environment, afford a decent home, breathe clean air… all on a liveable planet.

A wellbeing economy matches our party’s deepest values: liberty, equality, community, democracy, and environmentalism.

Freedom, fairness, and equality of opportunity also cut across Liberal Democrat values and form the core of what a wellbeing economy could be:

  • A platform and the freedom to live your version of a best life.
  • Freedom in a fair society that works especially for the least advantaged.
  • Genuine equality of opportunity, not just theoretical opportunity written in law.

That new economy needs a practical route from the current, complex, globally connected system to a better one, built from inside the institutions, incentives, and fiscal realities we have now.

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Rodrigo Palmer

A Liberal Steady-State Economy? 

By Rodrigo Palmer | Sun 29th March 2026 - 8:53 am

Our current economic models are not fit for purpose. They fail to tackle the social-ecological crisis. 

And people know this.

Since 2008, a pattern has emerged. From Brexit in 2016, to Boris’ victory in 2019, to Labour’s victory in 2024, the Greens and Reform’s ongoing political boom, all these political phenomena share one common thread. 

Frustration. Anger. Resentment towards the status quo.

And rightly so. 

Our political leaders, regardless of political party (excluding the Greens), all talk about “going for growth”. We blindly chase economic growth, but we never seem to ask the question: at what cost? Who does economic growth really serve? 

By following neoclassical economic theory, we create an economic system that can exist in a spectrum between two states: recession or growth. 

Our current economic system is designed so that when both extreme states occur, the most powerful benefit the most, and the poorest suffer the most whilst benefitting the least. 

We are sold the idea that anyone can invest in the stock market, invest successfully, and achieve monetary returns. But not everyone has the luxury to afford an investment portfolio, most people are barely scraping by. So when these companies grow, the returns mostly end up concentrated amongst those who have the largest and most diversified investment portfolios, disproportionately benefitting the richest and most powerful.

When there is a crash, we are told that “the big banks cannot fail”. Large corporations obfuscate by arguing they are the ‘engines’ of economic growth. Such power means they exert sizable influence over our political leaders, because they have the monetary power to  significantly influence a country’s economic outcomes. 

So we bail them out. More of our public money goes into private hands. 

What we are witnessing globally is a gradual, systemic transfer of wealth. Such an economic system is not inevitable. But when we choose to design our economies by following neoclassical, and more specifically neoliberal macroeconomic models, the system strongly reinforces the positions of the richest and most powerful. Such an economy denies the poorest and most vulnerable freedom, and is deeply illiberal.

It can be said that economic growth has taken people out of poverty. “There are millions who are no longer in poverty because of growth”, is a narrative frequently cheered by so-called “think tanks” such as the IEA. They would be right in some developing economies, but to what extent is this true in the UK? 

Certainly in our western, developed economies, there are many across the country who are yet to feel the benefits of economic growth. The Global Inequality Report 2026 paints a sobering picture of increasing global inequality. Trends clearly show increasing wealth inequality in the UK.

In neoclassical economic models, the Solow-Swan growth model shows how economies can theoretically deliver exponential economic growth. This is the dream scenario for our political leaders, because it means they can postpone making the much harder political choice of redistribution of wealth. 

However, the Solow-Swan model is incomplete. It does not account for the importance of exergy to growth, and largely omits the flows of material resources within an economy, which are subject to strict thermodynamic limits. Such a model suggests that economies can grow independently of material flows, with the economy being able to expand ex nihilo, which does not align with physical reality. 

Our economy is a physical, thermodynamic, non-equilibrium system that exists within the biosphere, transforming natural resources into useful products for human consumption. 

The steady-state economy offers a realistic and just alternative grounded in science. It does not reject markets, markets can allocate resources efficiently, albeit with some limitations. What the steady-state economy offers is stability. No booms, no busts. No “growth for growth’s sake”. Growth is only sought with evidence-based, scientific analysis to seek whether it is truly desirable.

We have clearly hit a stage where growth is no longer socially nor environmentally desirable. But we currently exist within an economic system in which growth is intrinsic to success. And this needs to change.

In order to reach a steady state economy, we require:

– The redistribution of wealth to the poorest in our society to have a socially just economy.
– A period of degrowth to have an economy within planetary limits.

Degrowth is a means to an end. It is not recession, nor is it austerity. Such analyses are based on the assumption that our economic system cannot be changed. That is not true. The need is clear, all we require is the political will. There are just and sensible policies which can be pursued to ensure that people’s social and material condition remains stable.

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Tanya Park

The missing half of the beyond-GDP conversation

By Tanya Park | Thu 12th March 2026 - 2:19 pm

There is a welcome conversation happening in our party right now about the limits of GDP as a measure of success. As our Thriving Economy working group develops the policies that will take us into the next general election, colleagues are rightly asking whether we should measure what actually matters for people and the planet rather than treating growth as the ultimate aim.

I am firmly in the “measure what matters” camp. But I want to push this conversation somewhere it too often fails to go. Because the history of beyond-GDP thinking is littered with beautifully designed frameworks that changed nothing. The reason they changed nothing is not that policymakers hadn’t heard of them. It is that GDP supremacy serves powerful interests, and moving beyond it requires confronting those interests directly.

Let me put it bluntly. You cannot build a wellbeing economy without redistribution. New metrics are necessary but they are not sufficient. If we stop at dashboards and frameworks, we will have a more sophisticated way of describing the same broken system.

What the plans actually look like

Wales has shown that this is not abstract. The Well-being of Future Generations Act, passed in 2015, places a legal duty on public bodies to pursue wellbeing objectives across four dimensions: economic, social, environmental and cultural. It created a Future Generations Commissioner who can conduct formal reviews of public bodies and make recommendations they must respond to publicly. It is a genuine institutional innovation, but its limits are instructive too: the Commissioner’s powers remain largely advisory, and critics in the Senedd have called for stronger enforcement.

A UK-wide Wellbeing of Future Generations Act should learn from Wales and go further. It should embed wellbeing impact assessments into Treasury rules alongside traditional cost-benefit analysis, require departments to quantify outcomes using recognised measures like life satisfaction, mental health and social connectedness, and create an independent Future Generations Commissioner with the power to issue compatibility notices when legislation conflicts with wellbeing objectives, triggering mandatory parliamentary debate. Quarterly regional wellbeing dashboards, published by an expanded ONS, would give every community a clear picture of whether policy is actually working for them.

This is the institutional architecture that makes “beyond GDP” real rather than rhetorical. But architecture without funding is just a blueprint. The history of wellbeing frameworks, from the Stiglitz Commission to the UN’s own Sustainable Development Goals, confirms this: without the resources and political will to act on what the metrics reveal, measurement becomes an end in itself.

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Tom Reeve

The Greens copied our playbook. We shouldn’t copy theirs.

By Tom Reeve | Sun 1st March 2026 - 12:55 pm

Labour’s old coalition was always a coalition of convenience. On one side: socially conservative, economically anxious working-class voters, whose politics were shaped by trade unions, community, and a deep suspicion of those at the top. On the other: socially progressive, increasingly comfortable metropolitans, whose politics were shaped by universities, public service, and a belief that social liberalism was self-evidently correct.

These two groups shared little except a common enemy: the Conservative Party. That enemy is gone, at least for now. And without it, the coalition is falling apart.

Lib Dem CEO Mike Dixon sent members a thoughtful analysis of what happened in the Gorton and Denton by-election and what it means for us long-term. He said tactical voting was more fluid and more decisive than at any election in living memory, and we are better placed than any other party to receive anti-Reform tactical votes across a wide range of seats.

He concludes that the only barrier to success at the next election is our scale on the ground. Build the teams, recruit the candidates, deliver the leaflets, and the opportunity is ours, he says.

I agree on the value of a good ground game, but I fear that is only half the answer.

Ground operations matter enormously, but they are generally designed to motivate our supporters and those who are prepared to lend us their votes to go to the polls. They do not create supporters from nothing. What creates them is a clear, consistent national message about what voting Lib Dem will actually get you. 

In the coming political melee, we need to be clear whose side we are on. That means policies that are worthy of the emotional punch our campaigns can deliver.

The Greens show what happens when you get this wrong. Their politics rest on a false premise: that environmental seriousness requires slower growth, higher costs, and less development. Growth versus nature as a zero-sum game. It sounds principled. It is actually a counsel of despair – and in the middle of a housing crisis, it falls hardest on the people who need the new homes.

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The Voice

Scottish Lib Dems support gaming industry

By The Voice | Tue 24th February 2026 - 9:55 am

The gaming industry contributes £188.4 million annually to Scotland’s economy and provides 2181 full time jobs but it’s been facing some challenges in recent years, not least from funding streams drying up thanks to Brexit. A motion introduced by our candidate and, we hope, future MSP for Inverness and Nairn, Neil Alexander.  Neil knows what he is talking about as he worked in the industry for 8 years. By the way, Neil’s social media output is the best in the business. Follow him on Instagram here.

The motion calls for:

  • Establish regional “hubs” across all areas of Scotland for both digital media and video games industry, providing low-cost office space for both sectors, rather than the rent-a-desk options currently available.
  • Create a Games Innovation Centre to act as a central hub for research, development and expertise sharing, supporting new start-ups with vital business skills.
  • Launch a new pilot fund to support targeted sector growth for newer start-up studios.
  • Condition access to any public funding or support body on games companies adhering to fair work practices, such as Fair Work First, to ensure the fair treatment of all employees within the industry across Scotland.
  • Develop a new educational strategy which actively engages industry-leading experts and supports the next generation of high-quality university courses, putting practical experience, such as guaranteed industry placements.
  • Explore business rates exemptions for digital media and video games start-ups for the period of a first product release window while these companies establish a steady revenue stream.

Here’s Neil’s speech proposing the motion:

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Rodrigo Palmer

All aboard the status quo: We don’t need a department for growth; we need a department for beyond growth.

By Rodrigo Palmer | Mon 16th February 2026 - 6:30 pm

Let me make this clear: GDP is not an accurate measure of prosperity. Nor is it an adequate measure of wealth. As Robert U. Ayres argues in “The Economic Growth Engine”, it is a measure of economic activity. It only accounts for capital that is generated as a result of the depletion of “natural capital” (i.e the environment).  It does not account for societal wellbeing; nor does it account for the losses of wealth (i.e pollution) resulting from the depletion of “natural capital” resulting from economic activity.

So with all of these limitations, why on earth are policymakers, politicians, and economists still using it as a metric for social and economic progress?

Not accounting for the costs of pollution is a choice, but the fact is that these costs remain present. The reason why we don’t see the costs of economic growth is because economists dismiss them as “externalities”. This is how the current Labour Government can justify that a “win-win for economic growth and natural recovery,” (DEFRA: Environmental Improvement Plan, 2025) can happen, even though growing the economy is inherently coupled to the depletion of the natural environment. You don’t get an economic product from nothing, you have to get the resources from somewhere, and that only comes from either the extraction from the natural environment or from solar energy.

Aside from the essential renewable energy transition which can use solar energy to fuel the pursuit of economic growth, there will always exist economic needs and thus industries that require the extraction of natural resources. The EV transition is an example of this, with electric batteries requiring the extraction of critical Earth minerals. The increasing demand for EVs due to the green transition will inevitably lead to greater depletion of the natural environment.

It can be correctly argued that a move to a circular economy will reduce the pressure for industry to extract resources from the natural environment. The circular economy is a vital component of an environmentally just world: by extending the life-cycle of products we can massively reduce the environmental impact of the economy. However, even if as Ayres argues that 100% recycling is theoretically possible in a closed system, it is not a practical aim.

As an item is recycled, the useful energy we can extract from it degrades over time. The more times we recycle a product, the more energy we have to put in to extract the useful energy out of it. We would have to put increasingly larger amounts of energy into a product to recycle it, and this aim is not realistic.

How many solar panels, wind farms, dams would we need to build to obtain this energy to recycle these products repeatedly, on top of the increasing electricity demand that we require for the green transition? Imagine the extent to which we would have to deplete the natural environment to extract the necessary raw materials required to build that.

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Caron Lindsay

UPDATED: Daisy Cooper announces new economic policy – Get Britain growing again

By Caron Lindsay | Wed 11th February 2026 - 10:11 am

In a major speech in the City of London this morning, Daisy Cooper has announced Liberal Democrat plans to break up the Treasury and move it to Birmingham.

A new Department for Growth would include the Department of Business and Trade’s responsibilities and would have a mandate to boost long term sustainable growth. It would be a single point of contact for business and investment.

A smaller department for public expenditure would control departmental spending

Stronger economic growth would be recognised as the only sustainable solution to the country’s problems. This would come alongside a better relationship with Europe.

This department would align tax policy so that Labour mistakes like the rise in employers’ National Insurance Contributions could never happen again.

Basing it in Birmingham would be a strong signal that we want to rebalance the economy across the whole country and as the only party with MPs spanning the Highlands and Islands to south west,  we see the differences in growth between the south east and everywhere else.

She argued that if we could close the productivity gap between Birmingham and London,we could boost tax revenue by $4 billion which could, for example, provide 80,000 teachers

She said that rising inequality and cost of living pressures were grinding people down. The C0nservatives and Labour have failed and the British public who are left wondering if anyone knows how to fix it.

This all comes with a slogan: Get Britain Growing Again.

Farage wants to break things, not fix them. Others want to hoard power in London. Conservatives are chasing Reform saying that moderates are not welcome in their party.

She said our future liberal economic vision are rooted in the values which have guided us for hundreds of years. We champion international trade, fair markets and wealth creation.

Wealth creation and social justice, she argued, are two sides of the same coin. She concluded:

We believe we can give people a sense of hope, end the cost of living crisis and build the UK’s future by all of us for all of us together.

She then took questions from journalists. The BBC’s Nick Eardley asked how she could justify the time and money to be spent on this. Daisy replied that the plan was  entirely consistent with existing plans to move civil servants out of London. We would prioritise this particular department. He followed up by asking why Birmingham rather than the north of England, Scotland, Wales?  Daisy’s answer: our second city has good combination of manufacturing and financial sectors and if we boost it will help other places around the UK too.

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Paul Reynolds

Economic growth – simple but not easy, Part 2

By Paul Reynolds | Fri 14th November 2025 - 4:20 pm

The Labour government still has ‘economic growth’ as its cure-all remedy in the lead up to the Budget. However, without any systematic, coherent approach, expectations are low. What should the UK actually do ?

In Part 1, I argued that it was necessary to start from key principles; defining growth and where it comes from, and scoping out the landscape (and boundaries) for beneficial economic growth; at least to help all the relevant people know what is to be achieved. Part 1 also touched upon the ‘headline’ economic problems to be tackled, and institutional obstacles to be overcome.

In Parts 2 and 3 the aim is to comment on a few of the ‘levers for achieving growth’, starting with the two main inhibitors to growth, concentrated finance and its link to monopoly, and a sclerotic state.

CONCENTRATED FINANCE – ‘Make financial services, services again’

In the UK expressions like ‘capital markets’ and ‘institutional investors’ mask the extent to which control of the finance sector is concentrated in a few hands (eg Index Funds). Share prices rise due to manipulations such share buybacks rather than performance, creating vulnerabilities and systemic risks. De jure monopoly, and private cartelisation amongst supposedly arms-length investors are designed to keep share prices rising at all costs. Such institutions have become the masters not servants of productive businesses.  A range of complex measures are required to address cartelisation, and shift power back to ‘real businesses with long term plans’. That is, if these towering financial institutions do not collapse first.

SCLEROTIC STATE – ‘Parkinson’s Laws are Euphemisms’

In the UK over recent decades the path to riches is no longer seen as providing innovative goods or services that people want to buy. It is getting an extendable profitable government contract, or a favourable regulatory change, where the ‘client’ is none too bothered about the detail, or even concerned about value for (someone else’s) money. The ‘reach’ of the state has gone beyond critical mass, fuelled by conflicts-of-interest. Culturally, in the UK, on the political right and left, it has become unfashionable to demand accountability and transparency, especially in procurement, regulatory and civil servant integrity matters.

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Lord William Wallace

Why does the UK handle budgets like this?

By Lord William Wallace | Sun 9th November 2025 - 8:45 am

Another budget, and another set of parliamentary debates – and newspaper comments – that will generate much heat but very little light about the choices Britain faces in raising state revenue and funding public services.  Since Margaret Thatcher used revenues from North Sea oil and receipts from privatization to fund current spending through asset sales rather than higher taxes, Britain has been stuck with a false self-image that we can be a country of both lower taxes than our continental counterparts and comparably generous public services.  Brexit of course, with its consequences in in depressing economic growth, has made the choices more difficult.  But we still have politicians calling for tax cuts without suggesting what impact on public spending they will have.  How do they get away with it?

I’ve just been reading a paper a novice Liberal Democrat MP wrote 25 years ago on how badly the British Parliament handles budgetary scrutiny and debates on spending and taxation.  He notes that the British Parliament has one of the weakest systems for parliamentary influence over government expenditure in the world.  He condemns the way in which taxation and spending are discussed separately rather than as unavoidably linked, with changes in the tax structure sprung from the Chancellor’s budget statement rather than carefully examined for their impact on the economy – which has led to the UK now having one of the most complex and untidy systems of taxation in the developed world.  He decries the false divide between ‘policy’ and ‘finance’ – the first the province of ministers, the second the responsibility of permanent secretaries who answer to the Public Accounts Committee for how funds have been spent. ‘It matters how a country takes its decisions on the budget. It may be less exciting, but process matters’, Ed Davey argued.  He therefore made a series of proposals to strengthen the role of MPs in discussing financial choices and in later scrutinising how well funds have been spent.

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Paul Reynolds

Economic growth – simple but not easy.   Part 1.

By Paul Reynolds | Wed 5th November 2025 - 1:33 pm

For decades the current governing party in the UK seems to have assumed that economic growth comes from the blunt instrument of government borrowing and spending. But as state debt has approached 100% of GDP, they have had to think beyond that. Unfortunately, this has not amounted to much, with ideological barriers and lack of experience among decision-makers hindering reforms. Labour tend to resort to photogenic one-off remedies, which may or may not ultimately contribute to any beneficial growth; a heavily subsidised weapons deal, a fantasy ‘new-town’, or a trade deal of exaggerated benefit.

Economic growth is not quite as easy as that, although scoping out required reforms is relatively simple.

To be effective the government instead needs to state its considered position on where it thinks growth comes from, and what hinders it. In addition there is the question of what type of growth is being pursued; surely not all growth is good, especially growth that is not environmentally sustainable, nor fiscally or socially sustainable.

Improving the ‘quality of growth’ sits, strategically, alongside the quest for aggregate higher growth. Environmentally sustainable growth must include the implementation of the ‘polluter pays’ principle. Fiscal sustainability means growth should not be generated through unsustainable debt. Social sustainability means growth that is not captured by a plutocratic elite, leaving everyone else behind, or even poorer.

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Tom Reeve

Forget the culture wars – economics is the battlefield

By Tom Reeve | Thu 9th October 2025 - 11:55 am

I share the concerns of friends in the party about the rise of racism, nationalism and xenophobia in our increasingly illiberal world. The so-called “war on woke” is just code for prejudice against everything diverse, personal and self-expressive.

But as much as I fear we are heading down an all-too-familiar road towards fascism, I don’t believe the progressive response to the far right in this country is working. Too often we react with condemnation — important though that is — without tackling the economic conditions that allow prejudice to thrive in the first place.

Intolerance feeds on economic inequality and financial insecurity. It is always present, but its rise as the dominant malignancy in the political ecosystem often coincides with periods of economic stress. 

The parallels with the 1930s are stark. Then, economic collapse created fertile ground for fascism, with the gutter press fanning the flames. Today, we feel the economy crumbling around us, which once again is generating anxiety and anger, and it’s the social media algorithms that are fanning the flames. Technology may change, but people remain the same.

The cost-of-living crisis is not new. It has been building for decades, leaving many communities hollowed out and resentful. Brexit, nationalism, anti-refugee protests, and Islamophobia have all been symptoms of that deeper malaise, cynically exploited by those who weaponise social discord.

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The Voice

Chancellor needs to take bolder action on inflation – Daisy Cooper

By The Voice | Wed 20th August 2025 - 11:58 am

July’s inflation figure of 3.8% is a sign that the Chancellor needs to take stronger action says Lib Dem Treasury Spokesperson Daisy Cooper. And she has an idea up her sleeve about how to do that:

Rising inflation is grim news for families, pensioners and businesses still struggling with the cost-of-living crisis.

After the Conservative Government oversaw the biggest fall in living standards on record, people desperately need things to change. But, so far, Labour has failed to offer a vision for the economy or a strategy to bring down the cost of living.

The Chancellor needs to take far bolder action, starting with the Liberal Democrat plan to halve energy bills by 2035.

Details of that plan to halve energy bills can be found here:

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Jamie Greene

The economic performance gap in Scotland

By Jamie Greene | Thu 29th May 2025 - 11:50 am

To paraphrase a famous election campaign, what do the Scottish Liberal Democrats do for a working-class boy from Greenock?

Well, in my case they make him their Economy and Finance spokesperson in the Scottish Parliament.

I’m delighted to be able to speak for us on this portfolio at Holyrood and honoured by the trust I’ve been shown as our newest Lib Dem MSP. I’m also aware there is a lot of hard work to do.

In nearly two decades in power, the SNP have failed to deliver. They have preferred bureaucracy and constitutional bickering over supporting Scottish businesses, particularly Small and Medium-sized Enterprises.

As deputy convenor of the Scottish Parliament’s Public Audit committee, I see what has gone wrong on a weekly basis.

Figures from the Auditor General lay bare the SNP’s economic mismanagement.

While the tax powers of the Scottish Government have brought in an extra £3,367 billion, a startling £2,738 billion has effectively been lost due to policy decisions taken in Scotland, leaving just £629 million available to use. In layman’s terms, just 20p in the pound of additional tax paid due to divergent policies is available to spend.

This has been labelled the “economic performance gap” by the independent Scottish Fiscal Commission and it should worry us all.

The gap is a direct result of Scottish Government decisions and is a creation of the SNP in government. “Pay More, Get Less”, should feature on every SNP leaflet at next year’s election.

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Tom Reeve

Beating Reform will require a new economic settlement for the working class 

By Tom Reeve | Sun 4th May 2025 - 12:30 pm

Reform is on the rise. Led by the garrulous Farage, it is hoovering up votes across the country by doing one simple thing: articulating the grievances of the working classes. 

While it is generally recognised that populism rarely leads to stable government, there is a growing realisation that Reform has a point. It’s not easy, but if we look beyond their abhorrent views on race, religion and equality, they are articulating an economic critique. 

Okay, characterising it as a ‘critique’ is a bit of a stretch – it lacks intellectual rigour or depth – but Farage’s economic cri de coeur resonates with the working classes because it speaks to their lived experience. 

Reform can make the running on this because they are the only ones singing the song. 

Although GDP in Western countries has grown hugely since the 1990s, median wages have remained largely static. That’s the kind of dry economic statistic that is almost guaranteed to put half your audience to sleep while inciting the other half to argue vehemently over its causes. However, the reality of what that means is clear to see. The rich have got richer – much richer – while the poor squeak by. 

We shouldn’t be surprised to see that this leads to political unrest, but some people try to dismiss this as the politics of envy. After all, the reasoning goes, many people may be poor in relative terms, but in absolute terms, they are much richer than previous generations. So what are they complaining about? 

We also live in an unprecedented era of social mobility, in which numerous people have ascended the economic ladder, with some of them becoming fabulously wealthy. It’s self-evident, is it not, that people who don’t get ahead only have themselves to blame. 

Where the politics of envy narrative fails is in ignoring a fundamental facet of human nature, the sense of fairness. Fairness is intrinsic to human psychology – it even appears to be inherent to the psychology of other social animals such as wolves and other animals. We ignore this primal instinct at our peril. 

Is it fair that some people can afford to own several nice homes when many others cannot afford to own even one basic one? If the purpose of an economy is to allocate resources to the members of society, is it fair that some people spend lavishly on luxuries while many others watch every penny? Can we say that we live in a fair society when the poorest among us struggle to put food on the table for their families, or – that awful phrase – have to choose between eating and heating? 

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The Voice

Ed Davey: UK must stand firm against Trump’s attempts to divide and rule

By The Voice | Wed 2nd April 2025 - 11:28 pm

Ed Davey has responded to Donald Trump’s announcement of tariffs with various countries.

He said:

Today Donald Trump has launched a destructive trade war that threatens the jobs and living standards of people across the UK and around the world.

We need to end this trade war as quickly as possible – and that means standing firm with our allies against Trump’s attempts to divide and rule. The Prime Minister should bring our Commonwealth and European partners together in a coalition of the willing against Trump’s tariffs, using retaliatory tariffs where necessary and signing new trade deals with each other where possible.

If the Government gives in to Trump’s threats, it will only encourage him to use the same bullying tactics again and again.

On Peston he called for an EU/UK customs union and for an economic coalition of the willing to stand up to Trump. He also said we should work with our Commonwealth allies.

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Chris Whiting

Why I’ve realised I’m a Socialist, and why Liberals and Socialists must work together

By Chris Whiting | Thu 27th March 2025 - 8:30 am

For a long time, I simply considered myself a liberal. I believed in personal freedom, a strong but fair economy, and the power of government to create opportunity. I wanted a system that worked for everyone, but I also thought markets, when properly regulated, could be a force for good. But over the years, I’ve come to realise that these values of equality, fairness, and a society that serves all its people are not just liberal values. They are socialist ones too.

This isn’t about abandoning liberalism. My liberal resolve has never been stronger. But, I have been forced to recognise that if you follow the principles of liberalism to their logical conclusion, you arrive at socialism. If you believe in fairness, then you have to acknowledge that an economy where billionaires accumulate wealth while millions struggle is inherently unfair. If you believe in democracy, then you have to ask why it stops at the ballot box. Why workers don’t have real power in their workplaces, or why people don’t have a say in the essential services they rely on.

For too long, liberals have sought to mitigate capitalism’s excesses rather than confront the system itself. They have pushed for fairer taxation, stronger public services, and better protections for workers. But these are reactive measures that attempt to manage inequality rather than prevent it. And the problem with inequality is that it isn’t just an unfortunate byproduct of capitalism. It’s a feature.

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The Voice

Watch: Daisy Cooper respond to the Spring Statement

By The Voice | Wed 26th March 2025 - 11:09 pm

Watch our Treasury Spokesperson Daisy Cooper respond to the Spring Statement:

The text is below:

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Robin Stafford

The quest for liberal democratic capitalism

By Robin Stafford | Thu 13th March 2025 - 3:21 pm

It’s easy to argue that today’s failures – public services, low investment, poor productivity, decaying infrastructure, environmental degradation, etc – are the result of 10-15 years of economic policies pursued by a government pandering to selfish interests. But what if the problem is wider than those policies and ideology? What if our underlying economic system is actually working against the interests of liberal democracy, and contributing to the rise of populism and authoritarianism?

This is the core argument of one of the seminal texts to be published in the last two years, Martin Wolf’s The Crisis of Democratic Capitalism. The Financial Times’ chief economics commentator charts how today’s form of capitalism is actively undermining democracy, which it sees as getting in its way: interfering with its single-minded focus on money for shareholders and executives, regardless of the consequences for the wider economy, society and the environment. The result is that inequalities are growing, whilst those with money are retreating from society and criticising governments for money spent on public services. Wolf argues for reviving faith in the common good, and says citizenship has a vital role to play.

This presents an opportunity for Lib Dems to develop a different approach to the economy as a whole, building on the thinking of those economists who have been challenging the prevailing orthodoxy – not just Wolf but the eight who signed September’s letter to the FT, including Gus O’Donnell and the former Goldman Sachs chief economist Jim O’Neill. Their letter said it was so vital to invest in restoring Britain’s crumbling public services that they urged Rachel Reeves not to cut public spending (unfortunately, Reeves seems to have opted for austerity-lite, growing steadily heavier by the week.)

I’m not suggesting I have the perfect oven-ready new economic model to hand, but that’s deliberate. To gain widespread support, such a model needs to reflect the interests of a wide section of society, including the environment. There are countries which already have successful models that differ from the Anglo-Saxon version, notably in Scandinavia.

Such a model has to place a much greater emphasis on sustainability – not just environmental, but social and economic as well.  Economic policy must question the current roles of the Treasury and the Bank of England, which currently reflect the interests of finance rather than the wider economy, society, and sustainability. Business/industry policy must tackle underinvestment; it must look at the role of the City and finance in driving short termism and excessive rewards for a few; it must toughen regulation on monopolies and those firms and sectors that act against the country’s social, economic, and environmental interests; and it must act as a catalyst for publicly desirable activities, like the growth of renewables and improvements to quality of life. The aim is wealth creation for the whole country, not just wealth extraction to benefit a small minority.

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Paul Hindley

In the shadow of Trump, Britain requires a seismic shift in tax and spend

By Paul Hindley | Wed 19th February 2025 - 10:55 am

Harold Wilson once famously said that “a week is a long time in politics”. Well, the last week feels like an eternity in international politics. Last week, NATO member states received a scolding from the new US Defence Secretary, Pete Hegseth, who warned them not to treat Uncle Sam like “Uncle Sucker” on defence spending. While at the weekend’s Munich Security Conference, US Vice President, JD Vance spouted the ridiculous claim that immigration and tackling hate speech, such as through having safe zones around abortion clinics, were a bigger threat to European democracies than Russia or China.

The wavering of Trump’s America on its security commitments to Europe poses immense questions for Britain. Keir Starmer was right to commit British peacekeepers to Ukraine as part of an international mission. While Ed Davey was right to call for Labour to reverse the Conservatives’ 10,000 troop cutback to the British Army. It is clear that defence spending will have to increase considerably beyond NATO’s 2% of GDP requirement, even beyond the new government target of 2.5%.

But defence is not the only area that requires a considerable increase in public spending. Britain needs new and improved hospitals; the social care crisis needs to be addressed; several local councils are facing bankruptcy; welfare cuts, such as the two-child benefit cap, need to be reversed; and climate change needs to be tackled. All of this heralds a seismic shift in how we as a country facilitate tax and spend policies. In a nutshell, public spending in Britain will need to increase across the board.

One option to increase state spending is by making cutbacks elsewhere. However, after years of austerity, this is unwise. But what could we cut anyway? We cannot cut NHS spending or defence spending. Some schools and prisons are already crumbling, so education and justice are off the table. The welfare, local government and international aid budgets have already experienced deep cutbacks. Finally, we cannot cut back on green policies when we are facing a climate crisis.

What about funding the additional spending through borrowing? Borrowing can offer part of the answer. We should be borrowing to invest in the construction of vital infrastructure projects. Borrowing should also be used in the short term to immediately address the NHS crisis. While some EU nations, such as Spain, are calling for EU-wide borrowing to fund Europe’s necessary defence spending increases. However, we should be cautious. Borrowing is not a silver bullet. We have to be aware of the economic risks of relying too much on borrowing and the potential for a future debt crisis.

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Mo Waqas

Why populism thrives and how we beat it – Part 2

By Mo Waqas | Tue 11th February 2025 - 7:30 am

In Part 1, I introduced some ideas about how we beat populism, focusing on immigration. Today, I am going to look at the NHS, the economy and our political system.

Saving the NHS from Populist Scare Tactics

The NHS is under siege, and the populists love it. They use its struggles to push their own agenda, claiming that the solution is to privatise services or cut back on waste. But the NHS isn’t failing because of inefficiency or because too many people are using it. It is failing because governments have underfunded it for years, forcing doctors and nurses to work under impossible conditions while patients wait months for treatment.

The Conservatives say they are investing in the NHS, but in reality, they have allowed it to be slowly privatised, handing contracts to private companies and driving doctors out of the system. Reform UK claims it will get rid of NHS “red tape” but offers no actual funding or plan to stop the crisis. If we want to save our health service, we need real investment, not slogans. That means recruiting and retaining more doctors and nurses by increasing pay and improving working conditions. It means guaranteeing a GP appointment within a week, so people don’t turn to A&E out of desperation. It means properly integrating social care with the NHS so elderly and vulnerable patients aren’t left stranded in hospital beds because there’s nowhere for them to go. It means shifting the focus to prevention, tackling long-term health issues like obesity and mental illness before they become crises.

Fighting Economic Populism – Real Prosperity, Not Empty Promises

Nothing fuels populist anger more than economic insecurity. Wages are stagnant, housing is unaffordable, and bills keep rising. People feel like they’re working harder for less while the rich get richer. And they’re right—because the system is rigged.

Reform UK’s answer is to slash taxes and cut regulations. The Conservatives promise tax cuts too, despite 14 years of economic stagnation. Both parties push the idea that lower taxes will magically create jobs and growth, but we’ve seen this experiment fail again and again. Cutting taxes for the rich does nothing for working people.

The real solution is an economy that rewards hard work, not just wealth. That means raising wages so that people earn enough to live, not just survive. It means fixing the housing crisis so young people can afford a home again. It means backing small businesses so local entrepreneurs can thrive instead of being crushed by big corporations. It means making the tax system fairer, so billionaires and multinationals pay their share instead of shifting the burden onto working people.

Restoring Trust – Cleaning Up the Corrupt Political System

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Nick Baird

The challenge for liberals everywhere – what if Trump’s policies actually work?

By Nick Baird | Sun 26th January 2025 - 1:00 pm

A provocative title? Of course there is much to offend us in President Trump’s pronouncements, along with the character and antics of his various nominations to Government posts. But if we previously assumed that much of what he said was bluster, we now have to face the reality that he means what he says, and consider what the outcomes might be. In particular, what if he succeeds?

This is not a simple question. To start with – what does “success” look like? We often condense that into simple numbers – GDP growth, inflation, stock market indices and unemployment figures. It is certainly possible that by these simplistic measures, and in the short term, Trump might succeed and grow the US economy without runaway inflation. With the world’s reserve currency and largest economy under his control, he has options not available to the UK and most other countries, and if he can bully OPEC into increasing oil & gas production alongside increases in US domestic production, falling energy costs might offset the inflationary effects of import tariffs, along with his programme of deregulation and gutting of Government Agencies tasked with policing and enforcing what regulations remain.

I know what you’re thinking (because you’re reading LDV) – what about the cost? What about climate change and damage to the environment? What about all the lives destroyed when settled yet illegal migrants get rounded up and deported? What about inequality and minorities? What about healthcare and reproductive rights?

And you are absolutely correct, but what will the headlines be? Particularly when the full impact of some of his policies may not be felt until after he leaves office.

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Lord William Wallace

What’s our line on public spending?

By Lord William Wallace | Wed 14th August 2024 - 11:55 am

What should be our overall party line on taxation and public spending? We have a new government that came into office promising not to raise any of the major revenue-raising taxes. It claims that it has now discovered far larger holes in public spending plans than it had expected. The reality is that the Conservatives and their media allies managed to focus attention in the run-up to the election entirely on the level of taxation, without addressing what that implied for public services and long-term investment.

So Labour are now stuck. They knew well before the election (as the Institute for Fiscal Studies (IFS) and even the business pages of the Times were telling them) that government spending projections were unreal, that maintaining Tory plans would necessitate cuts in core programmes, and that Jeremy Hunt’s reductions in national insurance were almost criminally irresponsible. But they didn’t dare to be honest with the voters, for fear of the Tories branding them as a ‘tax and spend’ party.

We have been here before. Tony Blair similarly promised before the 1997 election not to raise overall rates of tax. We Liberal Democrats were braver, promising ‘a penny on income tax’ to raise the quality of education. I was then chairing our manifesto group, and vividly recall a Labour adviser telling me that we were mad to do so; ‘voters will never support a party that talks about raising taxes.’ But voters don’t want to vote for cuts in schools, health services, police numbers, courts and prisons either. It turned out to be the most distinctive theme of our campaign.

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Should Lib Dems rethink our new fiscal rules after our successful General Election campaign?

By Michael Berwick-Gooding and Katharine Pindar | Wed 31st July 2024 - 8:55 am

Following the announcement of the new (so-called) £22bn ‘Black Hole’ in the Government’s finances, Chancellor of the Exchequer Rachel Reeves has announced over £3bn in departmental spending cuts, making the winter fuel allowance mean-tested, and scrapping the previous government’s social care reforms (which set a maximum of £86,000 on a person’s personal care costs) meant to be implemented eventually in October 2025.

During the General Election it was generally recognised that there would need to be cuts to the non-protected departmental budgets, which the Resolution Foundation said could be as much as £33bn and the IMF said could be about £30bn. During the General Election the Labour Party talked of less than £10bn in extra government spending.

In our Manifesto we suggested how £19bn more could be raised from increased and new taxes. These included  buy-backs, increased taxes on social media firms and tech giants and reforming capital gains tax, as well as including one copied by the Labour Party, higher taxes on the energy giants (but raising £900 million less than ours).

There is a way forward, which our pre-Manifesto passed in the Autumn Conference of 2023 proposed. We stated that we would  “safeguard the UK’s economic prosperity while making the investments our country needs. We will make sure that day-to-day spending does not exceed the amount of money raised in taxes over the medium term…”

However, in our Manifesto those words were replaced with, “Foster stability, certainty and confidence in managing the public finances responsibly to get the national debt falling as a share of the economy and ensure that day-to-day spending does not exceed the amount raised in taxes, while making the investments our country needs.”

Why make that change? It would leave us on the same horns of a dilemma as the new Chancellor has. You can’t simultaneously pledge to reduce the national debt AND pledge to make the investment the country needs, in one parliamentary term.

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Lord William Wallace

William Wallace writes.. .Tax Cuts versus Public Investment and Services

By Lord William Wallace | Fri 14th June 2024 - 9:38 am

The Conservative Manifesto confirms that they have dug in on tax cuts as their core offer to the voting public.  They know that this is an illusion, on which they would not be able to deliver if they won.  Opinion polls show that most of the public don’t think it’s realistic.  An IPSOS poll in early June found 68% of the public describing public services as ‘underfunded’ – confirming similar responses in multiple polls over the past year. 

Labour have been so frightened of the Daily Mail that they have committed themselves to holding almost all major sources of revenue to current levels.  They promise instead to fund increased spending out of future growth – a dubious prospect when UK growth is currently minimal and the global economy is being hit by wars in Ukraine and Israel and by the threat of a China/US trade war.  This has made the campaign so far surreal, with the Institute for Fiscal Studies (and the Institute of Government, and BBC Verify) pointing out the widening gap between promise and necessity, and with both major parties refusing to engage on where future cuts must fall.  Happily our manifesto has focussed on fair tax rather than low tax, and received compliments from the business pages for daring to do so.

Any of you who may be going to meetings with Tory candidates in the next three weeks can have a field day over the gap between rhetoric and reality.   Sunak’s party have promised to raise defence spending by 0.5% of GDP, and attacked Labour for its more cautious half promise.  Given the re-emergence of Russian threats to Europe and the current weakness of UK armed forces, such an increase is irresistible. So ask the Tory candidate what other budgets they will cut to fund this significant increase?  Education, when teachers are leaving in increasing numbers, universities in danger of bankruptcy, and apprenticeships less than half of what our economy needs?  Justice and prisons, which are already buckling from court delays, prison overcrowding, and probation understaffing?  Local government, where budgets have been squeezed to the point where key services are disappearing?  Or maybe the NHS, of all things?

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Peter Wrigley

J K Galbraith and the Liberal Society

By Peter Wrigley | Wed 15th May 2024 - 7:55 am

A friend who hoards his newspapers for years has just passed on to me an interview by Roy Hattersley with JK Galbraith in the latter’s 90th  year (1998)

The article is headlined “Sage of the Century”* and there is no doubt that, after Keynes’s  death, Galbraith  was the pre-eminent economist of the second half twentieth century.  He got most things right (including opposition to the Vietnam War) and many of the issues raised in the interview are as relevant today as they were  a quarter of a century ago. Indeed, having ignored his views provides a good explanation as to why we are now in our present  dire predicament.

The following quotes (in italics) are from the article;

To The Affluent Society we owe the prediction of “private affluence and public squalor.” Which we can see all around us, in spades after the Margaret Thatcher inspired dominance of the inadequately regulated market since 1979.

Galbraith’s first success was his analysis of “The Great Crash” of 1929.  In 1998 he predicted: “A sump will surely happen again, sooner or later. . .they are a normal feature of the market.”  

Well, it did happen again, in 2008 and we are still paying for the consequences.  Keynes was in favour of “animal spirits,”  but I think he had in mind investors in the “real economy” rather than manipulators of the financial markets, allowed to over-reach themselves by Mrs Thatcher’s Big Bang.

“The poor are politically emasculated.  They don’t vote so they don’t have a strong expression in Congress or the White House.”  

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Mark Valladares

17 April 2024 – today’s press releases (part 1)

By Mark Valladares | Wed 17th April 2024 - 11:15 pm

Back after a few days on grandparent duty…

  • Inflation figures: Nobody will notice this in their pockets
  • Three in four of worst hit constituencies for sewage dumping held by Conservative MPs
  • Mark Menzies scandal: Sunak must suspend the Whip

Inflation figures: Nobody will notice this in their pockets

Responding to the latest inflation figures, Liberal Democrat Treasury spokesperson Sarah Olney MP said:

Nobody will notice this in their pockets, with mortgage bills still skyrocketing after Liz Truss crashed the economy, and prices still so much higher than last year. By patting themselves on the back for this record, Rishi Sunak and Jeremy Hunt have proved just how out of touch they are.

Conservative Chancellors have presided over the worst cost of living crisis in living memory. The blame lies squarely with their gross economic incompetence.

Three in four of worst hit constituencies for sewage dumping held by Conservative MPs

  • 75 of the the top 100 constituencies for the worst number of sewage spills last year held by Conservative MPs
  • Rishi Sunak’s constituency was the 10th worst hit in England, with the duration of sewage dumping doubling to 42,000 hours in 2023
  • Theresa May’s seat of Maidenhead saw a staggering forty fold increase in duration of sewage dumping
  • Lib Dems warn of a “reckoning at the ballot box” from former Conservative voters furious about the sewage scandal

96% of Conservative held seats in England saw an increase in sewage dumping last year, with the worst constituency for sewage dumping facing 100,000 hours worth of spills, Liberal Democrat analysis of House of Commons Library research has shown.

Geoffrey Cox’s seat of Torridge and West Devon was the worst affected last year by sewage dumping, facing 97,000 hours worth of sewage being pumped into the area’s waterways, a 65% increase on 2022’s figure This was followed by Central Devon, Skipton and Ripon, Penrith and The Border, and Totnes, all of which experienced over 50,000 hours worth of dumps by water companies.

450 of the 508 seats in England saw a rise in the duration of sewage dumping and 456 saw a rise in the number of spills in 2023 compared to the previous year. In a staggering 96% of Conservative held seats in England there was an increase in sewage spills last year.

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Peter Wrigley

Growth: We’re there!

By Peter Wrigley | Wed 20th September 2023 - 8:58 am

I can’t find out when Gandhi said: There is enough for everyone’s need, and not for everyone’s greed,” but it must have been before 1948 because that’s when he died.  Yet, still 80 or so years later, rather than concentrating on better sharing of the world’s munificence, we are still looking for yet more economic growth as a free pass for “enriching” everyone without anybody paying the price.

The measurement of an economy’s growth via its GDP is largely a post 1945 obsession.  When he was the UK’s Chancellor R A Butler alerted us to the fact that, if we could achieve growth at the rate of 3% per year we could double our standard of living in 25 years.  Harold Wilson and the Labour party, in the campaign for the general election of 1964, promised all sorts of wonders, and they wouldn’t cost us a penny: they’d be financed out of growth.

Waring shots about this painless panacea were fired by the Club of Rome and its publication of “The Limits to Growth” in 1972.  The earth’s resources are finite and  more and more production risks poisoning  it .  It’s not a question of “Will the planet survive.” It almost certainly will, but not necessarily life as we know it, or perhaps any life at all.

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