Last Summer, the mood at party conference was jubilant. Record election success brought us 72 Members of Parliament and offered us a vast opportunity to shape national debate and grow our party further.
Yet, in the year since the election, it is the rise of Reform UK which has dominated the political agenda – despite us outnumbering them in Parliament by a factor of 14. Meanwhile, our vote share has sat stagnant at the same level since 2019, even whilst the combined Tory-Labour vote share has declined from 75% to 55%. As dissatisfaction with the status quo escalates, our electoral platform has clearly lacked a sufficiently bold vision to represent a serious political alternative.
To grow our party further, our policy platform needs to achieve three objectives. First, it must speak to the whole electorate, focussing on national priorities rather than those of voters in a small number of seats. Second, our party should embrace the radicalism needed to earn us the attention of the media and match the scale of public dissatisfaction with the status quo. Third, we must remain true to our distinct identity: blending human freedom with social justice, internationalism with localism, liberalism with social democracy.
A new platform
In his 2019 campaign for the Tory leadership, Rory Stewart declared that “the centre ground must not be simply the midpoint of the stick, whose only merit is being as far away as possible from each extreme”. Instead, the centre can succeed by “harnessing the tension of two opposing forces”: mixing policies from both sides of the political spectrum. This is the path the Liberal Democrats must adopt, embracing a new radicalism which transcends the established political divide.
Take the issue of rising child poverty – the most morally unacceptable consequence of inequality – where Labour’s conspicuous inaction over the two-child benefit cap has left a political opening. Our party has committed to repealing the two-child limit, but why not go further to outflank Labour on the left? There are 14 million children in the UK: we could consolidate existing child benefits into a single, universal, far higher benefit of £100 per week – for an additional £40bn. That is roughly 10% of our current welfare spend and could be funded, for example, by reducing the number of VAT exemptions to the OECD average. This policy is not only socially just but economically liberal, since removing VAT exemptions promotes economic efficiency, whilst universal cash benefits are fairly non-distortionary and avoid ‘perverse incentives’.
Borrowing now from the political Right, the Liberal Democrats should renew the cause of lower, simpler, fairer taxes. We should campaign to clarify multiple taxes on income – National Insurance Contributions and Income Tax – into one simplified levy with a new top marginal rate of 50%. Our National Insurance system is not only outdated and inefficient but unfair too, with landlords paying nothing on their rental income whilst those earning as little as £9100 per annum are forced to contribute. Creating one simplified income tax with a more stable marginal rate would also have the happy consequence of incentivising work and boosting growth. Other pro-growth tax reforms include introducing a Land Value Tax to replace Stamp Duty and Business Rates, reforming Council Tax into a Local Income Tax, or lowering and simplifying Corporation Tax.
Third, for a policy with increasing support across the political spectrum, why not finally embrace radical planning reform to build the millions of homes we desperately need? Precisely because of our inability to build homes, the median rent in London absorbs almost 40% of the median renter’s income. Moreover, the impacts of the housing shortage are felt most by the worst off: for those earning the bottom third of incomes in London, a median-priced home costs over twenty years of income. The Lib Dems could campaign to repeal the restrictive Town and Country Planning Acts and introduce a new zoning system – as works well in countries like Japan – liberalising the market for a progressive cause.
These three policies are simply illustrative of what a bold Lib Dem policy platform might look like: outflanking the establishment on the left and right simultaneously, advocating policies that match the scale of today’s challenges, blending economic freedom with social justice. Current policies, meanwhile, like abolishing Ofwat, will never galvanise millions of voters to support us at the next general election. Currently, our sole significant policies are rejoining the EU and constitutional reform – both crucial but alone insufficient to excite the electorate.
What the Liberal Democrats need is a radical policy platform which can fight for votes across the entire country, otherwise we shall remain mired in electoral stagnation.
* Will Lawson is a Liberal Democrat party member and a former two-term president of the Oxford University Liberal Democrats.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Debt-ridden graduates claim they are seen as cash cows
Why non-fiction books need their indexes
Changes in status: Local Elections wrap up
Mark Smulian
Geoff Reid
Margaret Pollus
David Raw
20 Comments
If we are going to be bold, we need to tax married couples together rather than separately, with double tax free allowances. This would prevent the current situation where a couple of two earners with similar levels of income pays less income tax than another couple with identical income but with one earner earning much more than the other.
While I suspect that anyone who writes for The Economist isn’t going to be bothered by an extra 20% on their weekly food shop; at worst they will switch from Waitrose to Tesco; anyone who is already shopping at Lidl or Aldi doesn’t have the option of going to somewhere where they can pay much less than they do already. Also, while that tax money could be spent on a new higher child benefit, this does nothing for childless people or those at the other end of the age range, pensioners who are facing the loss of the triple-lock on their State pension or, in future, having to work into their 70s before they receive it. We must not forget what Thatcher’s removal of the earnings link did to pensioner poverty over the following two decades.
Or look at the next largest VAT relief: the construction and sale of new homes. Does anyone think that the builders won’t just add on the VAT to their sale prices, making buying a new home even more unaffordable.
Or look at domestic fuel and power: are we really happy about raising the VAT rate from 5% to 20%? How many cold-related deaths will it take before the right-wing media that dominate the UK pile in on us; not very many, I suspect.
Yes, VAT has been allowed to develop inconsistencies over the years, but removing them is what Sir Humphrey would have called a “courageous decision”.
Did you submit your thoughts to the Policy Review process? Will you be submitting your thoughts at the Conference Debate on the Policy Review?
@ Brenda Will. “We need to tax married couples together rather than separately”.
How would you apply that to unmarried couples and same sex couples, Ms Will ?
‘tax married couples together’
Long ago, when I was young and newly married, and my wife also had a professional job, that was the system.There was a married man’s allowance, less that double the single person’s allowance. Quickly put us on to a 45% rate and soon onto 50%. We welcomed the introduction of separate assessment!
Anyone advocating extending VAT should be clear as to what they are advocating. Is it children’s clothes, food or public transport? Slapping 20 per cent on the cost of not VAT taxed items will have consequences.
Normally, Our vote share declines between General Elections, over the last Year it has risen.
Reform are the beneficiaries of a classic “Third Party Bubble”, coming on the back of all the publicity they got from The General Election & the gains they made at The Local Elections. We have often benefitted from such bubbles in the past but they didn’t usually do us any good because they generally fade after six Months. Lets see how Reform are doing in December.
Thank you for a most thought provoking article!
Mixed market based economy?
Abolition of child hunger etc?
Tax reform?
https://www.taxresearch.org.uk/Blog/2025/08/07/why-should-work-be-taxed-more-than-wealth/
Education reform including Scottish system for tertiary education payments?
Impartial B. B. C.?
Distancing from unreliable, self-seeking American Empire?
Real opposition to infanticide etc., etc. in Gaza and West Bank?
Rejoining a genuinely independent Europe?
Reducing damaging move to “Financial Capitalism?
Espousing “Industrial Capitalism” and/or Social Liberalism?
P. S.
Proportional representation?
Restrictions on donations/bribes for political parties and their ancillaries?
Prohibition of donations/bribes to individual M.P.s and candidates?
I agree with the 3 points in para 3 of this post. “Local champion” worked as a strategy in 2024, but it won’t do as well next time. The party needs to move on and use its vastly increased resources to present a distinctive policy agenda which addresses the issues of the day.
A’local champion’ policy was not the major factor in 2024. Many people actually liked our policies, esp on care. The biggest factor was tactical voting to beat the Tories. Tactical voting will be an even bigger factor next time to scupper Deform and the Tories and in some places Labour as well.
Yesterdays results a Reform landslide, it is not just that they won all 3 seats, it is the scale of the majorities. Reform sweeping all before them except in LIb Dem affluent areas, will they go the same way as elsewhere.
We seem unable to break out of our strong areas.
Perhaps it is noise we need to make, weekly press conferences and some headline grabbing points might be a help.
Will,
Some great ideas here, but how to pay for them? Nothing.
I’m sorry, but the fundamental problem the UK faces is a never-ending pretence by politicos that government can fulfil the desire for ever more free stuff that nobody ever has to pay for. So we end up with never ending cuts, perpetual reorganisation and dumping the bill on the next generation.
Most of our voters realise this, but still the party somehow produced a manifesto where we pretended there would be no cost to putting things right and tax rises were unnecessary (VAT, Income Tax and NI).
What most people in the UK want and desperately need is honest government by a party that shows
1) it understands the problems people in our country face and
2) it has the competence to start to put them right.
Currently Reform is the only party that a significant proportion of the people believes covers Step 1. The fact they offer no solutions that stand up to even cursory examination is irrelevant until some other party also covers Step 1.
A decade of the Conservative government has demonstrated their total incompetence and they are now heading to near oblivion. However in 12 months Labour have outstripped them.
Currently most people who vote for us regard us as competent, but unless we replace our addiction to complex radical policies uncoupled to financial realities, rather than simple targeted solutions to specific problems, we won’t make the breakthrough we and our country needs.
David
Agree with much of Will’s argument especially simplification of Income Tax, NICs and replacing Council Tax with local income tax. However, we need to recognise that amalgamating NICs and Income tax will effectively end the tax subsidy given to the over 66s. Logically desirable but probably not electorally acceptable unless planned over a long period!
Similarly with ending some of the silly VAT exemptions (but not all)
Constitutional reform and EU rejoin might be a quicker and more electorally acceptable radical approach to lead on whilst maintaining the social justice areas Will covers.
Excellent article Will, and one that offers for us to be fiscally credible. The party has long campaigned on zero rating x or y products VAT base further (and is once again arguing this partly in the upcoming Climate Change paper) – despite it being pointed out to them time and time again that this does nothing for passthrough on prices to consumers, nor would it save businesses. We should be going further than meeting the OECD average, and look towards NZ which has its GST (works the same as VAT) on most services (bar on most residential housing sales, which Liberals once had an appropriate, annual tax that could be levied on land rents…) – this can be offset with more generous and structured welfare that offsets the perceived (not actual) regressiveness of VAT. This would be much better to secure more transparent funding for our projects, and wouldn’t even result in a 20% rise in products, the increase would be around 14%, and still allow us to cut that single rate in fact if the party prefers a lower VAT.
Brenda – treating married couples as having a joint tax allowance would reduce independence of people in a couple unit and I certainly know many older women would probably be skeptical of unleashing joint dependencies (for tax reasons) on younger couples which was fought against for many decades. Certainly why it’s better received the Gov has abandoned Conservative ideas of joint income assessment for child benefit!
Rather than comment on any particular proposal in the article (other than saying that I like the idea of tax simplification!), I’ll just say that I do think it’s true that we need to work harder at presenting an economic narrative for how we’d offer the country a better future.
People broadly see the Tories as the party who will lower taxes, even at the risk of harming public services, and Labour as the party who will invest in public services, even at the risk of rising taxes… But what is the Lib Dems’ economic guiding principle?
Even to the extent that we can say how we’d pay for the various manifesto commitments, I don’t think the economic vision comes through as strongly as it needs to.
Ed Davey gave a speech recently which was emailed to members, about a kind economy. It was thoughtful and appealing. I’m not sure it sounded ‘radical’ enough… But then I’m not necessarily certain that we’d benefit from sounding too radical. And in fact, just doing what he said we’d do well, would actually be pretty transformative.
But still, I think the point stands that we do need to promote an economic vision for the country more.
Yes, Jonathan we need an economic vision for the country. Ed’s lecture was good but was a mix of criticisms of the current and recent past situation and some good economic policy ideas but not a vision. Maybe that is why it did not get the publicity it deserved? I had to search it carefully to try to find words that could convey a radical clear simple message to the general public; any journalist would have needed to work hard to find something to put out in general media.
We should focus on clear principles and avoid specific policies that we might not be able to deliver. The electorate and media like nothing better than a policy that despite good intentions leaves us hostages to an unpredictable future.
Local income tax? Who decides which LA I pay my local income tax to? Do I simply register to vote at my parents’ place because they have a lower rate?
If we’re going to the trouble of introducing land value taxation centrally, then why not use those valuations to implement a local land value tax to replace council tax? I can’t game the system by moving my property to a another authority (except maybe through boundary changes). The LA could be given control over all sorts of things like the rate of taxation, bands of rates, discounts, thresholds, and so on.
Great post, couldn’t agree more.
“The nineteenth-century liberal was a radical, both in the etymological sense of going to the root of the matter, and in the political sense of favoring major changes in social institutions. So too must be his modern heir.” – Milton Friedman