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Liberal Democrat SP: A Liberal Alternative

Ruth Murphy

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In Cardiff, the Liberal Democrat Leader Grace Saunders unveiled the Liberal Democrats’ Shadow Budget. [See: https://docs.google.com/spreadsheets/d/1v_mI4h6GLdEXUeVdQU93GA2WrqXjz6_dSHejOOf5Peg/edit?usp=sharing ]

Thank you for coming, 

It won’t surprise you when I tell you the Liberal Democrats think the main two parties have once again failed. But I truly think the British public look at Westminster and now agree with us. We have a government that still has made no progress on creating a viable inspections regime in Iran after needless sabre rattling and, up to the budget, spent months not making a single statement on the NHS. 

So the Tories failed as we feared. Who are the alternative? A Labour Party that has tried to cheat ex-miners out of pensions and benefits. A Labour Party that has called for an illegal General Strike. A Labour Party that is constantly embroiled in a civil war. 

It doesn’t inspire. 

Their budget proposals don’t either. 

Let me be frank: the Chancellor’s attempts to raise equity in the financial sector are important. As someone who has spent my whole life working in the third sector, I have little personal experience in stocks and shares. But I do know how vital stocks and shares are in financing and fundraising for charities. That’s before we go into pensions, mortgages and savings. Labour Members of Parliament quickly discovered the important a strong financial sector is to all of our wellbeing, whether you’re a miner or a Labour MP. 

Similarly, the Chancellor is right to approach stimulus at this time. 

But the Chancellor has approached the economy as if her role is merely to manage it. Management is important, and we’ve consistently supported the Chancellor where she was right. But people need change. We know that before the financial sector experienced turbulence people felt like the system was not working for them. We taxed unfairly and we spent unfairly too. 

Fundamentally, the Chancellor did not change that. There’s no point managing a system that is broken, no matter how good a manager you are. 

Labour have recognised that system is broken. But their alternative is simply not credible. They’ve applied the worst of New Labour and Old Labour: Old Labour’s unsustainable stealth taxes and accounting tricks to mask spending and debt, and Old Labour’s belief in a state run economy with sky high taxes that we know does not work. When you combine that with their newfound love of Zimbabwean quack economics, it’s a recipe for disaster. Labour are right that people aren’t numbers. But we know what working people would endure under their new radical proposals: unemployment, inflation and stagnation as they allow businesses, mortgages and pensions to crumble. Jim Connelly has been around the political scene for a long time, and it doesn’t matter what problem you give him, he always provides the same solution: hike taxes and nationalise more things. He is not a serious man for serious times, and his budget is not a serious budget.  

It leaves the Liberal Democrats to put forward a solution that is as sensible as it is compassionate, that offers help to businesses and public services and grows wealth as much as it redistributes it. 

From opposition, while Labour have tried to undermine confidence in the financial sector, call for damaging strikes and take miners’ pensions and benefits from them, the Liberal Democrats have scrutinised the government and delivered real tangible safeguards for the self employed and for those who have lost their home. 

That is the work we can do from opposition. But we’re excited to unveil what we’d do from Government. 

On tax we’re offering the lowest tax burden of any of the three main parties for the poorest and middle class. While we welcome the government’s moves to halt Labour’s tax rises on ordinary people, we believe they’re not doing enough to lift the poorest out of tax altogether. So we’ve lifted the personal allowance for income tax by £1075 and the lower threshold for national insurance by £1040, lifting millions of low income workers out of tax altogether and saving British households £351. 

Compare this to a Labour Party who says ‘people aren’t numbers’ – but freezes the lower threshold of national insurance, dragging the poorest into their tax trap and hiking fuel duty to hit motorists with hundreds of pounds more in tax, hitting working and low income people the hardest. The Labour Party’s tax tricks are all the same smoke and mirrors. We’re the only party offering to lift millions out of tax and offer middle class households a tax cut they can rely on. 

And businesses must be even more despairing when confronted with a Tory Party that has provided temporary relief through the recession. While we support loan guarantees for SMEs and the development of green industry, we know businesses wanted to see a more permanent and longstanding offer. 

The Labour Party have not provided it. They’ve rejected the government’s attempt to provide stability to the financial sector altogether and have given no offer to businesses, entrepreneurs or the self employed beyond higher taxes. 

It’s the Liberal Democrats who have provided that alternative for businesses. 

Not only have we accepted the government’s package for businesses, but we’ve built on it. And we’ve incentivised unemployment in the process. We’ve reduced national insurance on employers from 12% to 11%, cutting the burden of hiring and reducing the tax burden on businesses by nearly £6 billion in the process. 

And while the Tories boast of their freezing of business rates, I tell small business owners know this:

We’d get rid of hated business rates entirely, instead choosing to replace them with a commercial land value tax. 

The tax we are proposing would be revenue neutral, result in lower taxes for more than 90% of businesses and removing up to half a million of SMEs out of tax altogether by focusing on landowners over businesses and development. It is businesses in underinvested local authorities, manufacturing and retail businesses which would see the most significant benefits. We expect their tax cuts to receive a 20% lower tax burden. 

Further, we’re the only party willing to acknowledge the powerful role Britain’s arts and entertainment industry play in our soft power as the world’s eminent cultural powerhouse and in the economic gains they bring to Britain. Arts and entertainment is a bigger economic contributor than oil, yet does not receive even a fraction of the financial support or recognition. During this difficult recession we want to give businesses in the cultural sector that recognition, which is why we will be establishing a £150 million fund to support the arts and cultural sector. 

The lifeline we are giving to businesses can not be overstated. 

But in reforming our tax system to be fairer, we won’t stop there. 

The government talks about freezing council tax. 

Again, we’ll scrap it and stamp duty tax to merge into a single property tax. 

In scrapping the purposely regressive and outdated council tax system which punishes the poor to subsidise the rich and hinges local government funding on property prices in 1992, we’d modernise how we fund local government and cut taxes for the vast majority of households in the process. 

The Joseph Rowntree Foundation found that the average council tax bill was £1009. 

Under our proposals, the poorest homes would be removed from tax altogether and the average bill would be £670. 

A cut of £339 for the average household. 

But it won’t end there. These proposals will raise revenue which we’ll be able to invest in local government to provide free personal care for the elderly and disabled. 

This free social care provision stands in face of the disastrous and unexplained ‘National Care Service’ proposals put forwards by Labour and the indifference from the Conservatives on a growing issue. While we’re clear we need to have cross party discussions on how we make social care viable in the long term, we’ve put forward practical funding proposals we lift the burden of high care costs on the hundreds of thousands elderly people and disabled in England who require personal care. 

And as the political descendants of William Beveridge, it is the Liberal Democrats more than any other party that understands the value in a strong, efficient and funded national health service. The other parties will argue about efficiency vs investment, but only we understand you need both. 

The government’s investments in the National Health Service this year were, simply put, insufficient. I can see why they rallied against waiting list targets, because while they talk of above inflation rises the truth is it is not enough for us to see real investment in our NHS that can yield results. Even Thatcher put more money in that this. 

I suppose this is the result of a government that appointed a Health Secretary who only made one – I emphasise one – statement during his tenure: and that was to defend the Foreign Secretary on Iran. 

But we can see Labour aren’t much better. In fact, when it comes to investing in lowering waiting times they’ve invested less than the Tories have. When you take away Labour’s disastrous National Care Service proposals, it’s the Liberal Democrats who have invested in our National Health Service. 

We’ve built the most hospitals, invested the most in tackling waiting times and put the most money towards public health and reducing wider strain on the NHS. 

On schools you can see a similar approach, with the Liberal Democrats investing more than the Tories who are obsessed with structure above all else and a Labour Party that can never be bothered to talk about education at all.

And imitation is the sincerest form of flattery: while the Tories have put £600m towards the pupil premium, you can’t be the original. The Liberal Democrats have invested £2 billion to be put towards the most disadvantaged children where Labour haven’t put anything at all. 

Further, the Liberal Democrats are the only party that is prepared to give early years the investment it deserves. We know early years investment works wonders for parents and children’s short and longterm wellbeing alike. Early years investment is the ultimate investment. And yet the government obsesses over structures and the Labour Party have nothing to say at all. 

That’s reflected in the budgets we’ve been offered: The Government only provided additional hours, Labour provided nothing, and the Liberal Democrats ensured we have laid the foundation for a universal childcare system, with free hours of childcare provided for all age brackets and childcare expanded for all. 

And we’ll invest and reform Sure Start so it reaches its full potential, putting £200 million towards it early health, education and parenting interventions. 

On justice we’re the only party willing to acknowledge the obvious that the main parties are failing when it comes to building a fair and sustainable justice system. Beyond funding, we must review how justice operates in this country. There must be an end to criminalising more things and intensifying punishments as kneejerk policy and more community based strategies. 

That is why in this budget we’ve invested significantly in prevention over treatment. So while we have hired 3,000 new bobbies – more than the Tories – I’m particularly proud of the £250 million we’ve put into rehabilitation funding. But unlike Labour, I recognise the problem of prison overcrowding. And while we’d be keen to fix that by reforming the justice system, we’d still invest in 5,000 new prison places. 

In Foreign Affairs and defence we’re the only party that has put our money where our mouth is when we say Iraq was a disastrous, immoral and legally dubious venture and getting out must be a priority for any government. The government promised to withdraw but we’ve seen no progress. Labour have talked tough with their new leadership but not promised to match it with their money. We’re clear we’d withdraw — and reinvest a portion of the funds into the defence budget in the process, pledging more in defence maintenance and defence procurement than the other two big parties while maintaining other aspects of defence and foreign affairs spending. 

And on welfare, we’ll take a more strategic approach than the other parties. We commit more money to the poorest children and pensioners than Labour, invest significantly in our pensions where the Tories failed and help renters through this tough period by topping up housing benefit significantly. 

I’m particularly pleased in our move to match carers allowance with unemployment benefits. It is shocking that more than a million unpaid carers in this country get less weekly than they would if they were unemployed. We’ve rectified that, ensuring those who take on the immense duty of caring for a loved one receive £291 more a year. 

It’s clear that climate change we’ve been forced into two arbitrary debates by the two main parties: whether we should give the private sector the power and freedom it needs to become green or whether the state must take strong action to help us meet our international carbon reduction obligations. 

The Liberal Democrats are clear we want to do both. 

That’s why we’ve supported and will enact the government’s initiatives to promote green businesses. We’ll also help support them in their quest to make public transport more green. But it doesn’t stop there: we’ll ensure the government is also investing significantly in renewable energies and in insulation so we can help the British people live greener lives and cut their energy bills down in the process. The money we’ll invest in green energy and insulation is more than Labour’s, but we are the only party who will tackle climate change with a comprehensive plan that fires on all cylinders. 

Our comprehensive spending plans may sound like they’re ringing on deaf ears in Scotland, Wales or Northern Ireland like Labour’s have. While I commend the government for giving the regions the paltry offer they provided the English people, Labour have gone on a spending spree in England and provided Scotland, Wales and Northern Ireland with the fiscal austerity the Tories would be proud of. The message could not be more clear that they take Scotland and Wales for granted. 

The Liberal Democrats do not. 

That is why we’ve frozen taxes on whisky, a key strategic industry in Scotland, where Labour and the Tories want to hike it. It’s also why we’ve provided a £2 billion ‘Union Fund’ in spending to Scotland, Wales and Northern Ireland more than the two big Westminster parties – because they matter too. 

And we’ll be supporting rural communities where the Conservatives and Labour Party have failed. We support the government in freezing beer duties to help rural pubs – though we’d go further and freeze all alcohol duties, freezing fuel duty to help rural motorists and investing in rural broadband and insulation. But we’d also establish a £150 million fund to support rural bank branches and post offices. I’m glad the Conservatives have played catch up, but it is the Liberal Democrats who have consistently championed rural communities in this Parliament.

That is our offer.

Labour will tell you during this crisis we cannot think practically. We can print money, hike taxes to unsustainable levels and have the state take control of more and more of your life. Any sensible management of the public finances has to be cruel. 

The Tories will tell you it is too risky to do anything other than to play the bank manager with the public finances. Any change to make how to tax or spend more fair is not practical. 

We know that to be untrue. 

If you’re an entrepreneur in Solihull, we’ll support your businesses and cut your taxes. 

If you’re a carer in Southport, we’ll lift your income by nearly £300 and ensure free personal care is available for the elderly and disabled in England. 

If you’re a farmhand in Shetland, we’ll protect your local bank branch, post office and pub. All while freezing fuel duty and investing in Scotland.

And if you’re a new family in Sheffield, we’ll invest in childcare and fire on all cylinders when it comes to cutting your taxes: saving your household by more than £600. 

The Liberal way is the compassionate and pragmatic way in comparison to two out of parties who have played tug of war with our economy for almost a century, and failed the British people time and time again in the process. 

Thank you.

Ruth Murphy.

Labour Member of Parliament for Liverpool Walton (1974-).

Opposition Whip (1982-).

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