In Hamlet, the Prince memorably says, “Something is rotten in the state of Denmark”. When looking at the economic mess we are in, I think we can safely say that about how much of big business and finance operates in the UK today.
Corporate life and responsibility – or the lack of it
We have seen, for decades now, a string of scandals which can only undermine our faith in how public and private corporations operate in our country. One of the most egregious examples is that of the, publicly-owned, Post Office, which saw ordinary people go to prison for crimes many in senior management knew they had never committed, in the infamous Horizon scandal. It took years of effort by the victims to clear their names. At the same time, postal services run by the sold-off arm, Royal Mail, have declined since privatisation, with fewer deliveries and sky-rocketing prices: the cost of a first-class letter has risen by more than 100% in the last five years! The HS2 gravy train is another example of mismanagement and even, potentially, some fraud. Something has clearly gone badly wrong if we are paying up to £100bn for a 150-mile stretch of railway.
The mergers and acquisitions system is also broken. Foreign companies are taking over UK businesses and then many are going to the wall. For example, Raleigh bikes, founded in 1887, has just started insolvency proceedings; the Dutch Company Accell bought the company in 2012 and then sold it on to a US private equity company in 2022, since when the business struggled. Private equity also bought the WH Smith chain, now also gone from our high streets. Let’s hope EasyJet fairs better as it has just been taken over by another US company, Apollo, which is reportedly loading it with £3bn in debt.
In the fossil fuels sector, oil company BP has also just reported record profits, despite the foreign wars affecting several oil-producing countries, some concluding it has been cashing in on these crises. And all this despite oil fuelling climate change, which is now costing lives and farmers millions in lost food production. Amazon, another US company – whose growth in delivery services has surely only hastened the demise of the British high street – paid only the equivalent of 7% tax on their UK profits in 2025. Why is this tolerated? And the involvement of private equity companies in providing social care in England – which Andy Burnham has at least said he will stop – has been a stain on our social care system. These companies have made good profits out of the most vulnerable in society – not always delivering a good level of service for it – in some cases quite the reverse.
And what about the provision of public services like water, higher education and the railways? Well, we all know about the water companies pumping sewage into our waterways. Thames Water, which is also largely foreign owned, is now in deep financial trouble, despite which their senior executives received record bonuses of £4 million this year. Again, it is only thanks to tireless campaigners like Feargal Sharkey that the level of pollution of our rivers and seas has been exposed. Brexit was also an open goal for the water industry who no longer faced stiff fines from the European Court of Justice for pollution incidents.
In the education sector, likewise, the tuition fees situation is beyond iniquitous. England has almost the highest tuition fees in Europe (compare £9000+ fees in the UK with very low administration fees in Germany, no fees in Denmark and Scotland and less than £2000 annual fees in France and the Netherlands), all compounded by grotesquely high interest on loan repayments. A limited amount of the early debt was sold off to the private financial sector some years ago which they saw could yield good profits. The Treasury itself is profiting from loan repayments this year drawing anger from the National Union of Students. More broadly in the sector, Prospect magazine reported in January 2026 that “Private finance is strangling British education” which is ”being corroded by the creeping infiltration of global finance at every level.” Sound familiar?
Finally, what about the railways? The previous administration under Keir Starmer promised to renationalise most rail services within five years. Well let’s hope that makes a difference because the i paper reported last year that UK peak time train journeys were more than twice the cost of their EU equivalents. Consumers who have to travel at peak times and who cannot book far ahead, are being punished.
These diverse situations may not seem linked, but, of course, they are – it’s about the neoliberalism model, which we are seeing operate in extremis in the UK, especially since Brexit. Institutions and consumers are being fleeced, time and time again, by business interests, who are putting profit ahead of the needs and wellbeing of customers and service users, meaning increasingly unaffordable – and sometimes difficult – lives for most of us.
Can the Liberal Democrats put forward policies which will start to tackle, at scale, the corporate business practices which are bleeding our economy dry?
* Judy Abel is a Lib Dem member who has worked in health policy for several major health charities. (She is still working)
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94 Comments
What a totally random set of whinges. Yes the Post Office scandal was appalling – but it took place in a state controlled firm – nothing to do with ‘ neo liberalism’. Yes the cost of sending letters has rocketed – but the volume of letters posted is plunging – around a third of that 6 years ago. Given the fairly fixed cost of delivering letters what on earth does the writer think will happen to prices.
The costs of HS2 are indeed outgrageous – but as a few minutes ressearch would show , have little to do with fraud and a lot to do with the utter madness of building much of it in a tunnel.
Yes oil producers profits have gone up – they are linked to the price of oil which is ( Iran war etc) up – nothing to do with ‘ some concluding it has been cashing in on these crises’
Without looking at Government subsidies its meaningless to compare rail fares
You clearly missed the point – but that’s OK.
Everything is being privatised. The PROFIT motive is everything. Prices will be controlled for profit and shareholders,nothing else. Debt is thrown onto the companies bought as the buyers borrow the money and transfer it to that company. Private Equity is NOT interested in people, only maximising profit. Most of these companies seem to be from the USA. Not the greatest company that looks after its people.. Do people in the UK want to be like the USA?. TV vastly USA controlled,brainwashing? Freeview under threat,Talking Pictures will go, MORE UK programmes lost to ‘pay to view’.
Leaving the EU has left us open to all the ‘sharks’ who want a piece of the meat. We are, as a result, no longer a rich country.Where do we go from here?
Thatcherism, Reagonomics sold to the public as a way to own shares in their countries industries etc .The little people. Things progressed with no serious problems for we had protection from both our own rules and those of the EU,we were strong with our backs protected The opportunities for riches went when the sharks started to buy up the little peoples shares over the years . It grew and grew till Cameron fighting to keep the Conservatives from squabbling came up with the Referendum.We left the EU. From there it has been downhill all the wa.y
@NigelHunter I agree with every word. Money is leaking out of the economy to narrow private business interests like water through a collander.
And yes Brexit took the breaks off the worst excesses of neoliberalism with weaker consumer regulation and less scrutiny of public procurement for example.
Nigel; Every single factory my parents and their families worked in – in my home town has gone . Only to be replaced by low pay , low skill warehouse work on the edge of town.
The High street & precinct has been decimated. All this happened after Thatcher left power , and continued unabated through the NL years, & all throughout our membership of the EU.
“the cost of a first-class letter has risen by more than 100% in the last five years”
Outside of sending leaflets at election time when was the last time people posted a standard letter with a stamp on?
cHLOE, bLAIR CONTINUED tHATCHERISM. Our industries were ‘transferred to China etc, cos they made them cheaper. Result, all the UK has are warehouses to store the Chinese goods that we now buy when we could have continued making them ourselves. If the EU continued the decline why are we still declining in High Streets now we are out of the EU?
Vape, Barber,s and Betting shops control them. Some launder money. The empty shops should be encouraged to become small manufacturing sites or community enterprises,maybe using 3d computers. They could be turned into homes COUNCIL ones. When wages are low council house RENTS can be a young persons 1st home. With imagination,effort and will they can be turned round. Maybe it could be your 1st home?
Hywel. Being an expostie I abhorred its privatising but knew it was in trouble as internet shopping etc took over. Being old fashioned I still use the post for transactions INCLUDING cards like birthdays,anniversaries for I think a personal gift is better than an email. I can and do use the internet but I do not let it control me. Alas, the rise in the stamp is cos of the privatisation of the system and the drop in letters and the higher costs incurred by parcels. Some countries subsidise their industry cos they know it is something their people value. The UK has been allowed to go down the neoliberal, WHICH IN NO WAY IS LIBERAL track, where money is allowed to be sucked out of the country.
According to Wikipedia on Neoliberalism “The term has multiple, competing definitions, and is most often used pejoratively. In scholarly use, the term is often left undefined or used to describe a multitude of phenomena.” So it’s probably the ideal way to link these aspects of modern life in Britain.
I would link HS2 and the Post Office – Fujitsu contract at the heart of the scandal. They both demonstrate that the UK public sector is spectacularly bad at procurement and outsourcing.
“Yes the cost of sending letters has rocketed – but the volume of letters posted is plunging – around a third of that 6 years ago”
Indeed, but it seems to me there are many more parcels being sent and delivered due to online shopping.
And I would far rather have them delivered by Royal Mail that by a courier firm based on the poor service I have had from the latter.
Royal Mail deliver stuff reliably in my experience.
@Hywel the last ordinary letter I posted to Belgium recently set me back £3.60! I do also still send people cards.
@Peter two elements of neoliberalism are privatisation – which we have even seen in some traditionally core public service areas like health & social care and education – and low regulation which is partly what Brexit was about!
Judy is right about the pattern even where the causes differ: with every example, ownership and power drift towards large corporations, and away from ordinary people, small businesses and even government itself. But HS2 is what happens when the state specifies badly, buys badly and changes its mind twice, the Post Office was state mismanagement, Amazon’s 7% is a tax design failure. The common thread isn’t one ideology, it is twenty years of poor governance, with Brexit and migrants offered as scapegoats while the balance sheet quietly shifted. The governance can be fixed, but only with a clear vision, and that will take a decade of patient work, not one budget. For liberals the vision should be still the same: we exist to disperse power, wherever it concentrates. That means a competition regime with real teeth so markets stay contested; a tax system that reaches unearned wealth rather than work and enterprise; more plural ownership (employee, mutual, community) so gains stop pooling in ever fewer hands; and a state that can specify, buy and regulate competently again.
“……. it’s about the neoliberalism model, which we are seeing operate in extremis in the UK, especially since Brexit. ”
I don’t know its been any worse since January 2020. It’s to be expected that those who claim our withdrawal from the EU was a mistake will claim otherwse though. However, the examples in the OP, of the privatisations, H2S mismanagements, etc all occurred well before then.
The feeling that there was “something is rotten in the state of Britain” was widespread well before June 2016. If it hadn’t been the result of the referendum would have been quite different. We probably wouldn’t even have had one.
One of the key policies of neoliberalism has to be that of economic austerity. LibDems have now mainly come around to being opposed to it. It wasn’t always like this – especially during the period of Coalition (2010-15).
We think we had it bad in the UK but the levels of austerity in the EU were far worse. Unemployment levels there soared after the GFC of 2008. National Govts were forbidden, by the EU, from using sensible Keynesian demand management policies to reflate their economies when reflation was needed.
https://revistaidees.cat/en/una-ue-neoliberal-per-disseny/
@Noncomformistradical
Where do you live?
Here in North London we are lucky if Royal Mail delivers twice a week, I have friends who are also ex-employees who live in different towns who say similar.
There is no way they are complying with the 6 day a week USO and we need to have a debate about the future of it as a matter of urgency.
I covered many of these points in my article on this website “The UK’s takeover laws and short-termism” of 26 August 2014.
I briefly worked at Raleigh bikes 50 years ago. At that time it was a massive company that dominated the UK market.
@Pawel thank you for your comments. That is it – it is about the pattern, whether in the private sector where some takeovers have wrecked longstanding British businesses and jobs or privatisation has lead to worse services – despite big bonuses for senior management eg in the water industry – or in the public sector where outsourcing to private companies has frittered away too much public money for often poor quality services. It’s about the mindset.
@David exactly – worse service, more expensive!
Yes, it is the mindset that has to change. Do we carry on as we are with ‘forinners’ draining money out of the country. Govnt not having business savviness and poor management skills or a partial or complete change. The establishment prefer the status quo or controlled change.The mindset change has to come from the bottom up. We can do that.
@Powal Urbanski
“… a tax system that reaches unearned wealth..”
Could you clarify what you mean by unearned wealth? David Beckham, son of a kitchen fitter and a hairdresser, is now a billionaire. Is the wealth he has accumulated in his lifetime ‘unearned’? Or are you perhaps speaking about inherited wealth, like family farms or other businesses that are inherited?
My view is that we just tax wealth, whether earned or inherited.
Some recent US takeovers eg WH Smith, Raleigh bikes etc have not ended well. Thames Water is owned by a wide range of investors, Canadian, Chinese, UK Universities etc. Foreign investment is not necessarily a problem unless it’s simply asset stripping. We probably need to judge it on a case by case basis but we also need some guardrails!
Correction – W H Smith was actually taken over by Modella Capital a British group.
Judy – can you tell us what your solution would be to a business with declining volumes like postal deliveries ?
What are the pressures that prevent governments of whatever persuasion from admitting that the dominant transatlantic model of capitalism has failed the citizens of this country? How do the Liberal Democrats find the language to admit it? Part of the struggle relates to the interface of money and politics. Revolutions (like far right populism) usual end up putting the wrong people in charge but there have to be ways of presenting peaceful routes towards a fairer and more civilised UK.
@Geoff I agree with every word of that. Someone has to start telling it like it teally is and to start tackling the issues. Why not the Lib Dems?
@Simon La Poste in France delivers six days a week and a normal stamp for a letter delivered within three days costs £1.30. That is affordable. If postage is too expensive people stop writing cards to each other and then greetings card retailers suffer. Everything has its price point. I have almost stopped buying coffees out because it costs £4.00. I won’t pay that! On it goes.
@ Simon McGrath Declining volumes and ‘market forces’ a la Thatcher ?
I’m afraid this is a very ‘Middle England’ response Councillor McGrath. When the postal service was first introduced back in the 1830’s with the famous universal ‘penny black’ it was intended to be a universal service at a standard price throughout every bit of the UK from the top of Shetland down to the Scilly Isles.
What is often forgotten in London suburbs is that internet reception if often more unreliable or unavailable in what you would regard as the more remote parts of the UK such as rural areas and the Highlands and Islands. It is also more expensive to set up and difficult to cope with for older members of the community. The Banks have added to this and been particularly unhelpful in this regard with their branch closures. It would help if the residents of ‘Middle England’ were more sympathetic and understanding towards their fellow citizens in the rest of the UK.
For the rest of it, well said, Judy Abel.
@David Warren
I live in the countryside. Couriers useless – a selection of them have left parcels all round my large garden over the years.
I don’t get that many parcels but I want them delivered properly. Royal Mail do that.
@Noncomformistradical
I agree Royal Mail is better than their competitors with parcels, letters however are a different story!
@Geoff
> What are the pressures that prevent governments of whatever persuasion from admitting that the dominant transatlantic model of capitalism has failed the citizens of this country?
I would say that having 80% of media in the “client” or “corporate” sector keeps them in line. They establish what is called a “climate of opinion”. Tune into Times Radio for five minutes to see it in action. So-called experts on tap. Refusal to utter the word Manchester. Drill all the oil. Social care is unaffordable. Smooth elite accents. A quick insight from the City. Perhaps taxes could go down a bit? You can almost hear the revolving door between the political class and the media class. Or you could listen to Rory and Al. Perhaps a quote from Mikey.
@David Warren
I get very few letters – I’m ancient and long-retired. Nearly all the organisations with whom I need to deal email me either with the bill they want paid attached or a link to where I can download it.
@Judy : ” @Simon La Poste in France delivers six days a week and a normal stamp for a letter delivered within three days costs £1.30. That is affordable. If postage is too expensive people stop writing cards to each other and then greetings card retailers suffer. Everything has its price point. I have almost stopped buying coffees out because it costs £4.00. I won’t pay that! On it goes.”
France has also had a huge drop in postal volumes. The French Govt subsidies their La Poste by E500m a year – do you think we should do the same ? Funded by higher taxes or cuts ?
One hates to be a pedant but it is actually Marcellus who speaks the famous line, not Hamlet.
“La Poste in France delivers six days a week and a normal stamp for a letter delivered within three days costs £1.30.”
GIven that second class post in the UK is 91p that is quite a bit more and that is only for letters up to 20g whereas the UK price is for up to 100g. 20-100g letters seem to be in the region of 3.10Eur (c. £2.65)
@Peter I agree the media sets the tone in a lot of cases! Look at the disproprtionate number of times Farage appeared on Question Time. Our media is right leaning. I always remember when Macron won the last election the BBC only focussed on how well Le Pen had done.
@Simon yes we should either subsidise the essential services we value and pay for them through progressive taxation or not privatise businesses that then extract a lot of money for shareholders and senior executives eg the water companies.
@Ynys I stand corrected but at least I got the right playwright and the right play!
@Hywel fair point although second class letters are so slow that I would prefer the French model!
@Simon “The costs of HS2 are indeed outgrageous – but as a few minutes ressearch would show , have little to do with fraud and a lot to do with the utter madness of building much of it in a tunnel.” The madness was to believe you could build a new railway with minimal curves and gradients under the current planning regime without tunnelling a high proportion of it. Using HS2s estimates of tunnelling costs, if we had originally decided to build a pair of tunnels all the way from London to Birmingham, it would have cost under £25 billion. I believe we have spent more than that on avoiding tunnelling.
You might argue that specifying a railway to be compatible with (but faster and more expensive than) European railways and not connecting it to HS1 is the real madness.
You speak of the cost – but at an early count this enterprise had already destroyed
693 local wildlife sites
108 Ancient Woodlands
33 legally protected SSSIs
18 Wildlife Trust Nature Reserves
5 Internationally protected Wildlife sites
2 RAMSAR sites – wetlands of international importance
4 taxpayer-funded Nature improvement sites
22 Living landscapes – (wildlife corridors essential to the survival of locally endangered species)
They had also cut the land of many farms in half
Forced hundreds of folk out of their homes – to be demolished
Ruined 50 Sq kilometres of land
THAT is the true cost of trying to save – what? – half an hour?
@ Peter Martin
“One of the key policies of neoliberalism has to be that of economic austerity. Lib Dems have now mainly come around to being opposed to it. It wasn’t always like this – especially during the period of Coalition (2010-15).”
if “austerity” means keeping public spending under control within an acceptable and manageable tax burden and public debt, then the Lib Dems rightly remain in favour of “austerity”.
You can’t spend what you don’t have, and none of labelling this “neoliberalism” nor borrowing where the costs of borrowing exceed reasonably expected financial payback nor printing money get over this.
@ David Raw
“When the postal service was first introduced back in the 1830’s ”
We don’t live in the 1830s.
How would you – in 2026 – run a business whose job it is to provide a universal frequent delivery at a uniform price across the country with declining volumes without increasing prices or subsidies? If your answer is “nationalise it” (and no party seems to be willing to do that) please explain how that will not increase prices or subsidies (hidden or otherwise).
If your answer is increasing subsidies, would you increase borrowing, taxes or cut something else? If so, what?
@Tristan. Norway created a sovereign wealth fund from its oil revenues which could have bee done in the UK to support public services – but no the money was squandered. Water companies were privatised and look at the pollution they are causing. We need an economic model where essential public services are in the public realm or run on a not for profit basis and major polluters to pay for the damage they’re causing not the state having to pick up the tab.
@ Tristan Ward “We don’t live in the 1830s”. I’m afraid as an old fashioned 1960’s social Liberal who just happens to be an F.R. (Hist) S., I’d already noticed that, Tristan.
I’m afraid that your stance has more than a bit of what went before Rowland Hill and Lord Melbourne’s Whig Government about it ……. and for that matter what unfortunately began to creep into this party between 2010-15.
Sorry, but I’m with Judy on this. I never began to believe in old fashioned utilitarianism many many eclipses of the moon ago – and there is such a thing as knowing the price of everything and the value of nothing.
@ Judy Abel
“sovereign wealth fund”
Yes I’ve long thought Britain missed a huge opportunity there. I don’t know how much (if any) of the oil tax revenue was used to pay down the UK’s national debt level arsing from the 1970s oil shock and Labour “non-austerity” but that would have been a legitimate use of the money as well. It’s worth recalling that the Norwegian fund is managed prudently with capital value being maintained and withdrawals limited to 3% a year – the expected real return.
I’m don’t think one can assume a nationalised water industry would pollute as much less than a privatised one. Managing sewerage is a pretty dirty business whoever owns it do and the political pressure for cheap basics at all costs doesn’t change with ownership either.
Ultimately I think the major polluter of water is us – the consumer. It’s a bit like VAT – all the pollution in the cycle ( human waste, fertilizer run off and a bit of industrial pollution is ultimately created for the benefit of individuals. Ultimate individuals pay, whether thoguh bills or taxes because people to be paid for collecting it, cleaning it, delivering it, managing the waste and for providing the capital..
@ Tristan,
But does “austerity” mean what you say it means? It usually means saying things like your “You can’t spend what you don’t have” an unthought out aversion to “printing money”
Most money isn’t printed anyway these days. It’s created in a computer by keystrokes. Maybe you’d like to tell me where the money we all have in our bank accounts and wallets has come from in the first place, if it is really true that Govt’s can’t spend “what they don’t have”?
This is not to say that the Govt should overdo the money creation or its borrowing and spending policies and underdo on the level of taxes that are levied. If it does we could end up with a level of inflation which is too high. The Govt needs to recognise its own responsibility instead of piling it all on to the BoE.
In other words we should sensibly managing both fiscal and monetary policy to regulate the economy, by steering a sensible middle way between having it overheat and having too much spare capacity and high unemployment.
What is usually termed as “austerity”, ie tax rises, spending cuts, and higher interest rates is actually a counter inflation measure. If Govts are doing these things to counter inflation then they should say so.
@Tristan – yes I am sure we could have used our oil money more wisely! On the water issue, sewage discharges have gone up massively – this is partly down to population growth but also to too much profit being extracted by the providers whilst they have not built new reservoirs and upgraded the pipes. As soon as there’s a profit motive and shareholders obviously there’s less money for the service actually being delivered. In addition once we left the EU, the heavy financial penalties imposed by the European Court of Justice on companies illegally discharging waste were no longer a deterrent.
@Veronica I couldn’t agree with you more. So much environmental harm done just to save around 35 minutes on a railway journey is actually awful, not forgetting all the people unnecessarily displaced.
This is a powerful condemnation of neoliberalism. Claims that other factors beside neoliberalism can sometimes also be significant serve only to muddy the waters.
Thatcher claimed that nationalisation had failed. Forty years later we should declare, equally roundly, that it is privatisation that has failed.
Thatcher could, of course, cite in evidence the power of the unions, leading to industrial strife, and to some extent, to the feather-bedding of nationalised industries. Now the pendulum has swung too far the other way. Unions, workers and consumers are not powerful enough.
@David Thank you. You put it so well. The pendulum has swing too far – too many are being fleeced now by ruthless private interests, both consumers and the state itself.
I think you could claim that a dogmatic insistance on a single ownership model has failed.
Labour brought the “crowning heights” of the economy into public ownership because they believed they profit was evil. The Tories privatised services and natural monopolies because they believed the state was evil. It’s not easy to sloganise but we should be looking at the best form of ownership for each sector and often looking past ownership to more fundamental problems.
“This is a powerful condemnation of neoliberalism.”
No it isn’t. As previously noted it is a set of whinges with a certain amount of inaccuracy (*). They seem to be based on the ideas that everything should be free, change is bad, profit is wrong and the state must control everything.
There are parties for that kind of politics, but they are not liberal ones.
(*) For example WH Smith hasn’t “gone from our high streets”. It has been rebranded (laughably) as “TG Jones”, and remains at (for example) railway stations.
@Tristan
– hedge funds running children’s social care – badly – never mind the children? – (https://www.theguardian.com/society/2024/mar/02/profiteering-off-children-care-firms-in-england-accused-of-squeezing-cash-from-councils);
– record sewage in our waterways putting people’s health at risk – you fine with that? https://www.sas.org.uk/updates/illegal-sewage-dumping-excellent-bathing-waters-investigation/
– huge profits for the oil companies taking advantage of raging wars – so that’s fine too? https://www.theguardian.com/business/ng-interactive/2026/aug/04/revealed-major-oil-firms-make-93bn-profits-amid-war-and-climate-crisis
Private equity running special needs schools https://schoolsweek.co.uk/how-investors-are-making-millions-from-the-bankrupt-send-system/
If you are fine with all of that then there really is no point us having political parties or debating politics.
Thank you for all your comments – we had a good debate!
A few comments —The ‘Middle England ‘ scenario is so OLD.The country is changing and that way keeps the status quo, when people are restless for change, where they have a say and tired of how things are run.
Tax system does need changing for it to be more positive towards developing the country. Stop money leaking out of the UK by squeezing money out of, for example AMAZON by devising a carrot AND stick approach where they SUBSIDISE Royal Mail. There will be ways..A thought.1% reduction in a tax IF they subsidise Royal Mail,
Sovereign wealth funds. China does it thru their ownership of Heathrow. A govnt owning a foriegn business. A wealth fund can be set up if POLITICAL parties united to encourage investment in the country.
Profit is not a bad word BUT it should be controlled as to how much can be taken out of the country,say 5% has to stay in the UK.
The mind set of the country has to change.We can start it off..
@Nigel agree with all of this – your last paragraph says it all – things have to change and the Lib Dems could start to be that change.
@Jana thank you, and fair challenge. You are right that “unearned” is the wrong word if it sounds like a verdict on effort. Beckham earned his money and paid income tax on it. I would not want a tax system that treats success as suspect.
My point is simpler: the question is not whether someone earned their wealth, it is whether it ever gets taxed at all. Hold an appreciating asset, never sell it, borrow against it to live on, pass it down with the gain wiped clean. No sale, no income, no tax, all legal. Same story as Judy’s Amazon example, just the private version. That is the gap I would close first, along with the trust routes.
On simply taxing all wealth, my worry is not the principle but the plumbing. A flat annual levy hits hardest where wealth is illiquid, the farm or the shop with the flat above it, while mobile wealth just moves. Most countries that tried it have quietly dropped it. Running a business, I have some sympathy for anyone asked to pay tax every year on something that produces no cash.
Good debate this, credit to @Judy. Not many threads get this far into the actual mechanics.
When the Victorians wanted to build a railway, a canal, a sewerage system etc, they gave all the necessary permissions, compulsory purchase orders, financial authorisations etc in an Act of Parliament. The UK system, which requires permissions to be granted by every local authority though which the project passes may be democratic, but it’s bonkers in terms of large infrastructure projects. Parliament is elected to make decisions and to allow major desirable infrastructures to be subject to this ridiculous planning process ensures only one thing. A much higher cost than would be these case otherwise. It could also be seen as political cowardice by passing the buck on potentially unpopular decisions to local councils. Our great and great great grandparents would be laughing at this stupidity.
Hold an appreciating asset, never sell it, borrow against it to live on, pass it down with the gain wiped clean. No sale, no income, no tax, all legal.
What?
Firstly, the money that you used to buy the asset in the first place had income tax paid on it.
Secondly, inheritance tax would be paid on the value of the asset at the time of death.
Thirdly, you have to repay the debt, with interest. That interest is profit for the lender and so tax is paid on it.
In the scenario you outline it’s not true that ‘no tax’ is paid — in fact the exchequer gets rather a lot of money out of it!
There seems to be a schizophrenic approach by our party when talking about high streets. On the one hand people bemoan the decline of high streets and on the other hand buy lots of goods and services online. I don’t particularly like shopping, so, for me, it really isn’t important that high streets flourish, because I only visit them when I absolutely have to. For those whose Saturdays are spent ‘shopping’ the high street may be more important. If we are to talk meaningfully about High Streets and the disappearance of well known brands, then we have to also talk about online shopping at the same time. People can’t simultaneously buy stuff online and patronise High Streets. Therein lies the real problem
“I think you could claim that a dogmatic insistence on a single ownership model has failed.”
Fair point, up to a point. Certainly – as I mentioned – nationalisation can also have its difficulties. But, it is the rapacity of private equity, of over-powerful companies like Amazon, of cryptocurrency scammers, and of their parallel scamming politicians, which is crying out for overthrow today.
@David agree with those points. There are no checks and balances when it comes to how capital operates in our markets.
Can we have,will there be a debate at conference where a new mindset can be discussed?
“Sovereign wealth funds. China does it thru their ownership of Heathrow. A govnt owning a foreign business. A wealth fund can be set up if POLITICAL parties united to encourage investment in the country.”
Investment by whom? Which Government?
Sovereign Wealth Funds are the accumulation of $$, ££ etc that governments such as Saudi Arabia, Norway, Kuwait, Singapore, China have built up over the years. What do they have in common?
They are all large net exporters. So, for example, China doesn’t actually “do it does it thru their ownership of Heathrow”. It does it by acquiring lots of ££ which it needs to find something to do with. Buying Heathrow is one of them.
If we want to build up a SWF we have to become a large net exporter too. It means taking steps to keep he value of the pound artificially low to encourage our exporters, and increasing levels of taxation to divert resources from the home to export markets.
I doubt that many voters will be in favour of that.
@Nigel Hunter. Steady on now. You know we never debate anything meaningful at conference. Difficult topics like disarmament, serious changes to economic policy, taxing wealth, rejoining the EU, reversing the SC decision on trans rights are always avoided in favour of motherhood and apple pie issues. There’s almost nothing on this years agenda that raises my heartbeat in the slightest. It’s always easier to avoid issues that might upset some people, whom our campaign teams think might vote for us if we play nice. Whatever happened to the Liberal idea of open and passionate debate and major policy differences to be discussed and resolved? Far simpler not to have the debate in case conference makes the ‘wrong’ decision!
@ Mick Taylor Indeed, the bland leading the bland.
>”Sovereign Wealth Funds are the accumulation of $$, ££ etc that governments such as Saudi Arabia, Norway, Kuwait, Singapore, China have built up over the years. What do they have in common?”
Exports is one thing, another is a vision of the future that provides for their citizens. The UK has been an exporter – north sea oil for example. However, the Conservatives thought it better to squander through questionable spending than to invest.
Another way of accumulating monies in sovereign wealth funds is through pensions and asset transfer. There is no real reason why London Heathrow, water utilities etc. shouldn’t be owned by a UK sovereign wealth fund and thus ensure profits are retained in the UK – its just decades of political mumbo jumbo dogma that has prevented it.
Remember one of the aspects of Sovereign Wealth Funds is that the monies can be held within the banking system and not by the BoE/Treasury – which given circa 97% of the GBP in circulation is held by the banks and not the BoE is something to think about.
@Dav fair points, worth taking one at a time.
The original purchase money, yes, often taxed, no argument. But that is the stake, not the gain. If I buy at 1m and it grows to 10m, the 9m is the wealth in question, and that is what never meets a tax event in this pattern.
Inheritance tax is the interesting one. Here is the bit that surprises people: if you never sell, the capital gains tax clock resets when you die. Your heirs are treated as if they bought the asset that day at its full value, so the whole 9m of growth is never taxed by anyone. That is the “wiped clean” part, and it is simply how the rules are written. Inheritance tax should then catch the estate, but reliefs and trusts are exactly the routes I said I would close, and the borrowing shrinks the bill too, because debts come off the estate before the tax is worked out.
On the interest, tax on the lender’s margin is real but tiny next to the gain, and it is the bank paying it, not the asset holder.
You are right that tax gets paid at various points along the way. But the growth itself, which is where the real money is, never gets taxed by anyone. That is the flaw worth fixing. Sort that out, and the trusts, and this whole argument about wealth taxes gets a lot easier.
The bland leading the bland. Is that why we flounder in the polls? Reform,Greens ‘stir it’ AND GET THE PUBLICITY. Farage is getting the media attention, yet again, cos of his election win. He makes waves. We used to be the ‘WAVE riders’. The publicity from debating SERIOUS things could get us that media coverage Are we really OLD and bland heading towards retirement orcan we spit venom and grow?. This debate has shown there are plenty with fire in their bellies who know the mind set needs changing.
PS– Farage all over the media.Our 2 council election wins ,no coverage. ‘Stiing it ‘ makes waves. Hence media coverage.
Pawel Urbanski 13th Aug ’26 – 10:34am:
Hold an appreciating asset, never sell it, borrow against it to live on, pass it down with the gain wiped clean.
Applicable to the US. In the UK, HMRC got there first…
Explain why the Buy-Borrow-Die tax strategy is rarely used in the UK:
https://gemini.google.com/
The US isn’t as riven by the politics of envy as the UK, so the accumulation and retention of wealth is generally seen as a good thing. Inequality is the engine of growth. Such wealth often provides the risk capital to fund the next generation of business start-ups.
Brexit was also an open goal for the water industry who no longer faced stiff fines from the European Court of Justice for pollution incidents.
The ECJ has no power to fine water companies. Rather, it fines Member State governments for failing to comply with EU law such as the Urban Waste Water Treatment Directive. Those fines were paid by UK taxpayers and the money went directly into the general budget of the EU — a UK loss.
Today, post-privatisation and post-Brexit, the penalties for illegal sewage discharges are far more severe and are applied to the water company and in egregious cases to company executives. The fine does not go to HM Treasury, but via DEFRA into the Water Restoration Fund for environmental improvement projects and local remediation schemes in the company’s region.
This is what is meant by ’Taking Back Control’.
Are current UK penalties for illegal sewage discharges more or less severe than those imposed by the ECJ?:
https://gemini.google.com
@Jeff thank you, the detail on the 2013 rule is useful and I had not seen it.
My concern is that there is a set of mechanisms available to people with substantial assets that are simply not available to anyone else, whether that is someone on a salary, a family with modest savings, or someone running a shop or a salon. Borrowing against a portfolio is offered by most private banks and wealth managers. Trusts and similar structures need assets and advisers before they are worth doing at all. Through these, tax can be deferred or reduced, and in the case of a gain held until death, not paid at all.
I would not call that rare. It is a standard part of what private banking offers.
WHat bothers me is that the shortfall has to come from somewhere, and it lands on income and on high street businesses, where in my view it is already too high and is closing perfectly good firms. That is the imbalance I would like to see addressed, not out of any hostility to wealth, but because the current split is holding the economy back.
There is a business and economy debate at Brighton with a consultation session alongside it, so hopefully this can be discussed there too.
Pawel Urbanski 14th Aug ’26 – 4:28pm:
WHat bothers me is that the shortfall has to come from somewhere, and it lands on income and on high street businesses, where in my view it is already too high and is closing perfectly good firms.
The economy isn’t a fixed cake where if someone pays less tax it must mean others have to pay more. Even the socialists of Sweden eventually managed to work out that scrapping Inheritance Tax altogether would create more growth, more wealth and more tax revenue in the future…
‘How high-tax Sweden abolished its disastrous inheritance tax’ [2016]:
https://iea.org.uk/blog/how-high-tax-sweden-abolished-its-disastrous-inheritance-tax
@Nigel Indeed – lots of people know the current economic model is not working for too many ordinary businesses, including farmers. The Lib Dems could/should do some more in depth policy research on this issue as it is much needed – and it would be a vote winner. Everyone I speak to is fed up with the water companies, the rail fares, the big tech bros calling all the shots, Amazon paying next to no tax etc etc.
If I buy at 1m and it grows to 10m, […] the whole 9m of growth is never taxed by anyone.
To start with, I don’t have a philosophical objection to things being untaxed. In fact I think it would be better if many more things were untaxed than currently are.
That being said, let’s consider the £9m. First, buying an assert and hoping it will appreciate is taking a massive risk: it is impossible to predict which assets will appreciate. So they probably have lots of other assets that have gone down in value as well.
The reason capital gains tax isn’t charged on estates is it would be unfair to charge both that and inheritance tax. If you wanted to abolish inheritance tax and instead treat inheriting as a disposal event for capital gains that would be fine, but you’d have to offset the losses and you might end up taking even less tax. Ignoring gains and losses and instead just taxing the raw value of the estate gets around that.
There isn’t any way to put property in a trust that will both shield it from tax and also allow beneficiaries to get ownership of it. If a trust has been set up purely for the purposes of reducing tax, HMRC will ignore it, and if it really does remove the asset from the estate then the beneficiaries of the will will not be free to to dispose of it, so they can’t borrow against it.
@Judy Abel
I have looked at your links. I see no reason to rule profit out of any sector as a matter of principle with a few exceptions.
For children’s special needs care there were no complaints in your link about poor quality care. There were complaints about sharp business practices. If the (Tory run) council didn’t just refuse to pay unjustified bills they really are a bunch of idiots.
Sewerage. The sewerage is down to government failure in that the regulator has not been able to enforce the law and government has not permitted the utilities (via bills or otherwise) to raise the money to undertake the work needed or force them to do the necessary work. I’m not convinced state-owned water companies would be any different and I’m agnostic about profit it thins (and most) sectors. I would increase regulatory pressure to force Thames Water into bankruptcy. Or we could allow water bills to rise significantly to allow the necessary cash to be spend. I don’t understand why your post ignored our party’s part in bringing the sewerage scandal onto the agenda.
@ Judy Abel (cont)
Painful as they are for the consumer, right now I think high oil and gas prices are a good thing. They incentivise the transition to cheaper cleaner locally produced energy and desperately needed decarbonisation of the economy. As pointed out that’s the cause of current high profits for oil companies. That’s an opportunity for windfall taxes.
I’d keep profit out of education, but that’s not an argument for state run schools. I’d like to see a revival of the Lib Dem idea that the state’s money for primary and secondary education should follow the pupils into whatever school they attend.
I don’t see how your disapproval of profit sits with your approval of Sovereign Wealth Funds – which are just investment companies owned by states investing for profit.
Tristan Ward, “Painful as they are for the consumer, right now I think high oil and gas prices are a good thing.”.
So you’re happy with one of the consequences of the Trump regime and it’s general impact on the economy then, Tristan, and believe that taxpayers money should contribute to the so called Public Schools which already benefit from charitable status ?
@David Raw
If your accusation is that I am a good liberal – which includes economic liberalism – I plead guilty – as would the Lib Dem element of the coalition.
Liberalism is richer and more politically productive when it includes economic liberalism – and lets not forget that the social liberalism of the 1960s was not all that productive in terms of power for liberals in the UK while Thatcher’s economic liberalism certainly was for the Conservatives. Now socialism is (I believe) shown to be historically bankrupt the resulting dislocation may be an opportunity for a genuinely liberal party to become one of the great parties of government again, but we have to make better arguments than “in 1960s we thought……”
For the record the Penny Black was introduced in 1840 – not the 1830s.
@ Judy,
” Norway created a sovereign wealth fund from its oil revenues which could have been done in the UK to support public services – but no the money was squandered. ”
It couldn’t. Some of the oil revenues were spent on public services. The Government couldn’t then save, in a SWF or anywhere else, money that had already been spent. Some was squandered (if you mean in the UK) – mainly it allowed the Govt to de-industrialise the economy in the way that started to happen in the Thatcher years.
A sudden influx of oil money, or money from the extraction of any natural resource, can have adverse economic consequences. It forces up the value of the exchange rate and can cause local industries to become uncompetitive and fail. It’s known as the Dutch disease.
Shipping out surplus money via a SWF is one way to alleviate this problem. It lowers the exchange rate. It’s easy to blame the Tories and they do have to accept responsibility for what happened.
Nevertheless, I don’t know it would have been much different whoever had been in charge.
We, in the UK, have always had a “higher the better” mentality when it comes to the value of the exchange rate. We’ve always been more concerned with the cost of Spanish holidays than the health of our manufacturing sector.
https://en.wikipedia.org/wiki/Dutch_disease
@Trevor – to answer just a few of the points you raise:
– Windfall tax on oil and gas profits – agree – and that we need to transition to renewables fast!
– No evidence of poor care run by private providers? Sorry there is plenty! ‘Treating children like cattle’: what happens when private equity takes over a UK care home?www.theguardian.com/society/2026/jun/28/private-equity-uk-public-services-care-homes-children
– Water companies – England is actually an anomaly in being almost the only country in the world where water is privatised – and just look at the consequences. If people can’t go for a swim in the sea because they are worried about it damaging their health we’ve really reached rock bottom. Water privatisation has been a disaster because the water companies were very happy to take the profits but not to do the essential maintenance work. https://www.theguardian.com/news/ng-interactive/2026/feb/28/dirty-water-death-and-decline-the-inside-story-of-a-privatisation-scandal
Foreign investment in the utilities like the water companies may mean that their interests do not correspond with UK consumers’ interests.
Foreign takeover of manufacturing companies is far worse. The jobs can, and eventually are, moved abroad.
@John Indeed. At the very least we need to develop policies/guardrails on foreign investment in essential UK utilities to protect consumers and the viability of services.
@ John,
“Foreign takeover of manufacturing companies is far worse. The jobs can, and eventually are, moved abroad.”
There’s little difference ultimately. As Judy correctly says:
” the water companies were very happy to take the profits but not to do the essential maintenance work.”
Incidentally this hasn’t been essential in the generation of profits or the provision of huge bonuses to undeserving executives.
This maintenance work, had it been done, would have had to be largely done by UK workers and companies. Jobs are still lost.
The problem, now, is that so many national assets have fallen into the hands of foreign owners that re-nationalisation may not be possible without mayor international repercussions. Some of us would be prepared to put up with the fallout but many wouldn’t.
The alternative, which is to really give the regulators some teeth to be able to properly enforce the standards that are required, will probably be only slightly less problematic. This will naturally affect levels of profitability, especially if price controls and fines for poor behaviour are imposed.
This too will ruffle a few feathers both at home and abroad.
@Judy Abel
The suggestion that privatisation automatically leads to poor water quality is not supported by the facts. Most of continental Europe has poor quality ground water (see link below). I suspect the same applies in many other places.
https://europeanwaters.eu/
@Tristan I am sorry but while privatisation may not automatically lead to poor water quality it certainly has in the UK. I’ve been to Italy and Denmark recently and the water is sparkling clean / no one worries about going for a swim!! We have to live in the real world not a fantasy world and in the real world water companies have not delivered on new reservoirs and clean water.
Does regulation of the privatised water companies work ? Not for consumers if this news item today is to be believed :
The Guardian website today, “Water companies could be allowed to raise bills for customers during periods of drought under proposals being considered by the sector’s regulator for England and Wales”.
Tristan Ward 16th Aug ’26 – 3:14pm…
‘Treated water”, i.e. water that comes from your tap, throughout Europe and the UK is, almost always, safe to drink..
Regarding your attachment; it shows that around 15% of Europe’s water sources are classed as poor due to chemical/fecal contamination . However, data from the Environment Agency shows that 100% of surface water bodies (rivers, lakes, and estuaries) in England fail to meet good chemical standards due to widespread pollution like PFAS and sewage, and only 14.3% achieve good ecological health…
Not sure how “economic liberalism” is supposed to work with a natural monopoly such as water provision. You just get private monopolies.
Also you can’t necessarily ascribe the successes and failures of the Lib Dems and predecessor parties to ideology. The 1960s was when the first shoots of the Liberal revival appeared after decades of decline (itself less to do with ideology than constant bickering and splitting). The Lib Dem vote collapsed in 2015 after what was arguably a flirtation with “economic liberalism” (though there were other reasons as well, mainly the failure to present a distinctive identity in the Coalition). And Thatcher arguably ‘got lucky’ with the Falklands War.
@Peter,
“There is little difference ultimately”.
Although the cause is the same, there is one essential difference. Water companies with their jobs can’t be moved abroad.
Millions of well-paid jobs in manufacturing have moved abroad.
Almost everyone in my generation could afford to marry and have children. This is no longer the case.
Judy Abel 16th Aug ’26 – 3:51pm:
I am sorry but while privatisation may not automatically lead to poor water quality it certainly has in the UK.
On the contrary, after decades of under investment in the public sector, privatisation has resulted in a huge improvement in bathing water quality — from just 28% ’Excellent’ or ‘Good’ in 1990…
’87% of bathing waters rated ‘Excellent’ or ‘Good’ as new reforms come into law’ [November 2025]:
https://www.gov.uk/government/news/87-of-bathing-waters-rated-excellent-or-good-as-new-reforms-come-into-law
The issues as I see them stem from a lack of transparency and accountability in public life. I might add a rotten system with no rules and unfairness ingrained in our society. Electoral reform would make a start at remedying it and a full constitution would go further.