Invest in infrastructure, back enterprise and think long term: key principles in Tim Farron’s first major speech on the economy

In just over an hour’s time, Tim Farron makes his first major speech on the economy at the IPPR in London. We’ll have coverage of the whole thing later, but here are the key principles he’s setting out. He also sets out a challenge to Labour to support the Liberal Democrats in stopping the cuts to tax credits, not just putting in transitional relief which would do nothing to help new claimants on low pay.  I suspect that the stuff on venture capitalism shows the influence of Susan Kramer and her professional knowledge in the field.

Here are some of the key points he will make:

The Liberal Democrat economic principles

So today I intend to set out the three principles that will govern Liberal Democrat economic policy for the next five years. They are:

Invest now in infrastructure
Back enterprise
Take the long view

It’s a clear prospectus – just ten words – but it sums up very simply where we need to take this country and how my vision for the future differs from those of George Osborne and Jeremy Corbyn.

Comprehensive Spending Review

Next Wednesday, the Chancellor will deliver the results of his Comprehensive Spending Review.

In it he will set out £52 billion of new cuts to public spending over the course of the Parliament.

George would prefer you not to think about what that actually means. Certainly, he was very coy about it during the election.

He’d like you to think about public spending in a vague, esoteric way: a civil servant here, a feckless scrounger there, nothing terribly important.

But of course public spending pays for the things which matter to us all and to our daily lives: the schools our children go to, the hospitals and doctors we visit when we are sick, the police and security services who keep us safe. It is the roads and railways that get us to work the carers who will look after us when we are older and who care for our loved ones now, the new affordable homes which give us somewhere to live.

And here’s the thing: the vast majority of these cuts are nothing to do with the job that the Coalition Government started in 2010 to balance the books.

Tax Credits

George tells us he wants the state to stop subsidising low paid jobs. A worthy aim, but his ideology is getting in the way of common sense.

You know, the phrase “hard working families” has become a terrible political cliché. But in the case of those that will be most hit by the removal of tax credits, it turns out to be spot on.

Those families that rely most on tax credits are those that have to work really hard – often holding down multiple jobs – to get by.

So the Chancellor’s plans aren’t just unfair, they are also self-defeating and that’s why the Liberal Democrats will oppose them every step of the way.

A challenge to Labour on Tax Credits

And I want to take this opportunity again to invite the Labour Party to join us, because transitional protection is not enough.

Transitional protection will not help new tax credit claimants – those who after April next year find part time work and need some extra help – to make ends meet.

Transitional protection won’t help those who, on taking up additional hours will only be able to keep seven pence in every extra pound they earn once tax credits and benefits are taken away.

So I say to Labour: when we oppose the cuts to tax credits again, this time join us. With your support, and that of the many Conservative MPs who have also expressed concern, we can stop George Osborne’s tax credit cuts.

House building

We need to start direct Government spending on house-building, including finally cutting ground on new Garden Cities to provide new communities with decent jobs and infrastructure, for the next generation.

Support for small business

One, we would give real teeth to the Small Business Commissioner, such as the power to fine large companies who regularly fail to pay their bills on time.

Two, we will press the Government to renew the review of Business Rates that Danny Alexander initiated when he was in the Treasury and which George Osborne has quietly dropped.

And, three, we will be passionate champions of local banking.

Backing Entrepreneurs

The liberal spirit is the entrepreneurial spirit and entrepreneurs are natural liberals.

What does it mean to be an entrepreneur?

It means believing that no-one owes us a living, but nor should government get in the way of us making a living for ourselves – like liberals.

It means, given the opportunity, believing we can make a difference through our own individual talents and vision – like liberals

Supporting Venture Capitalism

That’s why I want the Liberal Democrats to become the champions of long term, high value Venture Capital in the UK.

What does that mean? Well for starters we could look at doing four things:

First, British investors in British companies need to be able to move their money around more easily. That may mean, for example, allowing investors to keep more of the money they would receive upon exiting an investment, providing they move on to the next investment rather than taking their profits.

Second, we need to encourage large companies to act as venture capital investors. We could start by allowing companies that invest in Venture Capitalist Trusts to claim a significant rebate on the cost of investment in small businesses, or include such investment within the remit of Research and Development Tax Credits.

Third, we should look towards the success surrounding Stanford University in encouraging Venture Capitalists to set up shop around our Universities, on the lookout for the next great idea. Cambridge is already having some success in this area but we need to go further, for example, giving local authorities powers to tempt those who may be able to fund new business ventures, or support the scaling up of existing projects via tax incentives.

And fourth, we need to do everything we can to encourage diversity within the financial industry, to further support peer-to-peer lenders, and other alternative finance providers.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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  • It does make one wonder if this is the same party that co-wrote and stood shoulder to shoulder with the Tories at last years Autumn Statement. However, I think everyone would agree with the above if it’s affordable.

  • nigel hunter 19th Nov '15 - 9:59am

    Infrastructure, long view. Closing down coal power stations to replace with gas. The gas is brought in from abroad, who will build them? the Chinese? French? Costs always increase. At the mercy of others. We need to invest in our own infrastructure. One thought that came to me is PMs own plane, refit at £10 million, save £775,000 cheaper than chartering flights .”Best deal for taxpayer” Does this mean that it is cheaper to D.I.Y. and not to rely on others prices. We should be investing in our own infrastructure and train our own and employ our own.

  • nigel hunter 19th Nov '15 - 10:03am

    No, it is not that party It has a new leader. “Affordable? Everything costs. The Country, its people need to be forward looking and invest in the future, not be held back by austerity, it helps the taxpayer in the end.

  • It always amuses me how Labour supporters can trot out the old line about ‘is this the same Lib Dem party that ……. did so and so in the Coalition,’ whilst completely ignoring the fact that the ‘new’ old Labour is also a completely different party to that of the Labour Party for the last 20 years. Pot, kettle, black, comes to mind.

  • Dave Orbison 19th Nov '15 - 11:55am

    Sandy. I guess you have a fair point to an extent but there is a flip side. Having broken from the shackles of austerity at all costs it equally amuses me how many on here attack Corbyn for wanting to spend and accuse him of turning his back on the issue of debt. I seem much more in Corbyn and Farron’s new approach which is why iris all the more disappointing when Farron falls into his routine of bashing Corbyn on economics policy.

  • Richard Underhill 19th Nov '15 - 2:05pm

    The Chancellor’s legislation has boxed himself and, he believes, his successors into running a budget surplus. Looked at in isolation this might seem at least arguable.
    The Prime Minister wants to cede to diplomatic pressure ‘from allies’ to take military action in Syria. Looked at in isolation this might seem at least arguable, but how would it be paid for? A contingency reserve exists, but if used for this purpose there might be no contingency reserve for other unexpected contingencies, which could be anything from huricanes to BSE infections.
    We know about the financial costs of a prolonged bombing camapign because the USA did that in Vietnam, with the UK providing diplomatic support and a very small number of volunteers. Although Congress withheld funding the US President was able to borrow substantial sums from the financial markets.
    If Moscow considers that IS/ Daesh is the most important problem it faces the UK may find ourselves allied to Russia in the sense of sharing an opponent, as in 1914-1917 and 1941-1945.
    Most nuclear weapons are held by Russia and the USA. Do they really need so many? They agreed a reduction early in President Obama’s first term. Is there scope for multilateral reduction of nuclear weapons, including the UK, thereby saving some money?

  • The problem is Corbyn’s economic policy won’t work. Renationalisation, an end to outsourcing, printing money, high taxes and blocking the TTIP deal are not wanted by the vast majority of the public. We must point out the folly of economic left wing policies.

    Where we have to be careful with Corbyn bashing is on social liberalism, and any possible future coalition with the Tories must ensure we support social liberal policies, in the same way any future coalition with Labour should be strong support for economically liberal policies.

  • Matt (Bristol) 19th Nov '15 - 2:18pm

    This is interesting and we may be going somewhere.

    When there was the controversy over the tax credit vote in parliament recently, I recall one Labour MP on the radio (I think it was the World at One but I could be wrong) saying something on the lines of ‘EVEN (my emphasis) the self-employed are criticising Cameron on this’ as if the ‘self-employed’ were not people Labour would bother with unless they were backing their arguments. This sort of lazy, class-based thinking on the left is ridiculous; the modern economy created by Tories and Labour over the years has brought into the ‘self-employed’ people on unstable incomes from all kinds of backgrounds who are not made unsympathetic to the cause of social justice just by running a business or filling in a self-assessment tax return.

    Go, Tim. Don’t fall for the arguments of the big businesses who hide behind small businesses to stay powerful, but do keep putting your policies where your mouth is on this issue.

  • Ben Jephcott 19th Nov '15 - 2:30pm

    That is the best photo yet of Tim Farron btw – Getty images. Someone should consider buying the copyright …

  • Dave Orbison 19th Nov '15 - 2:47pm

    Matt – I don’t know the context of the MP you quote but you are wrong about your generalisation that Labour under Corbyn is against the self employed. In fact he and John McDonnell stated at Conference quite the opposite and outlined their plan to ensure that these people should enjoy benefits that currently are only paid to employees eg SSP, maternity pay etc.

  • I don’t know who will be most embarrased – him or me – but I tend to agree with most things Dave Orbison posts.

    It’s time to stop making cheap jibes at Jeremy C. He is a thoughtful man who needs to be listened to on his diagnosis of the ills of modern society…………. certainly on inequality, austerity and Trident . Whether he will be Labour Leader for long I don’t know, but it’s time to do a bit of radical thinking in both the Labour Party and the Lib Dems.

  • Conor McGovern 19th Nov '15 - 7:37pm

    @Stimpson “The problem is Corbyn’s economic policy won’t work. Renationalisation, an end to outsourcing, printing money, high taxes and blocking the TTIP deal are not wanted by the vast majority of the public. We must point out the folly of economic left wing policies.”
    – Majority of the public support utilities renationalisation along with rail, I doubt outsourcing it massively popular among workers across the country and 98% don’t know what TTIP is because most of the media don’t mention it. Of course ‘printing money’ and high taxes are short-term fixes with long-term risks, although an NHS tax seems to be popular (should be our policy imo) and the super-rich hardly pay their fair share in tax.
    When are we going to attack the real enemy, look for our Liberal backbone and start showing Osborne for the con artist he is, instead of peddling Thatcher economics?

  • Conor McGovern 19th Nov '15 - 7:37pm

    Having said that, Tim’s speech is a good start and a welcome shift from the past five years of biting our tongues!

  • Dave Orbison 19th Nov '15 - 8:19pm

    David Raw – not embarrassed here – lol. I enjoy the debates on LDV. I hope Corbyn and Farron succeed and that those in both parties who are from the failed past do not deflect or drag them down. As much as I would like to see Corbyn as PM, I would also like to see a strong LibDem party too that holds Tory and Labour to account as they once did, many, many years ago. Above all I want the electorate to have a real alternative to the Tories else I fear that public services and the NHS, what’s left of them, will be destroyed.

  • Matt (Bristol) 20th Nov '15 - 3:14pm

    Dave Orbison,

    In belated response to what you posted, I don’t know where I mentioned Corbyn or McDonnell in what I wrote. I would subscribe to the term ‘Corbyn-sceptic’, but I would refuse to be pigeonholed as a Corbyn-phobe.

    I freely admit that I’m not giving a lot of evidence, but I do feel that there is a loongstanding culture within the wider Labour movement (which I personally attribute more to the larger, slicker, more internally controlled unions than to the parliamentary party as such) which finds the idea of an economy of small businesses and self-employed individuals a) threatening and b) much too messy.

    It is good that Corbyn and McDonnell are focussing their attention on the self-employed, don’t get me wrong. It’s overdue. I don’t think ‘Labour under Corbyn’ (your phrase) is the problem here, as such. I _think_ (and I want to stress that it is a supposition) longterm Labour culture may be the problem.

    With regard to Corbyn, I think it is healthier for the country to have someone like Corbyn articulating a politics more or less like his; if we want a more plural politics (which I do), we need perspectives from all around the spectrum to present a genuine choice for voters.

    That in no way means I understand how Corbyn, in specific, can manage to sustainably lead Labour, an institutionalised party addicted to the 2-party system, and win against the other oligarchy party, the Tories.

    Corbyn is a darn sight closer to my politics than C*meron feels to me right now, and Corbyn is right to articulate the brokenness of British politics, and his rise to leadership (I am not sure it’s power, even within his party) represents that many people feel that broken-ness. But the system is broken, and so is his party’s controlling attitude. I am not hearing that he genuinely recognises that or has any ability to change either of those things.

  • Dave Orbison 20th Nov '15 - 4:26pm

    Matt – fair points. Re controlling attitudes – that’s a more abstract point. In a later post Tim Farron talks about the UK disease or short termism and that it needs to change, He is right but I am not sure how that can happen without some form of ‘controlling influence’. I was General Manager of a US owned, UK based chemical company. The whole structure driven down from the top of the Corporation, reinforced by management bonuses, was to achieve short term results. Paybacks on capital investment beyond even three years were frowned upon or simply turned down. When it comes to sectors such as transport and utilities my heart sinks at the prospect of this short-termism driving what we see today. So I think there a role, in fact an essential need, for Govt to be controlling in some business sectors and so far as I can see this is what Corbyn is aiming for.

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