Liberal Democrat Economic Recovery Plan

July 27, 2009 12:25 PM

Liberal Democrat Economic Recovery Plan

Liberal Democrat plans to help families and businesses include tax cuts for low and middle income households, a massive homes and jobs investment plan, stopping unnecessary repossessions and taking over banks to run them in the public interest

We will do everything possible to help. Everything possible to protect jobs, keeping viable businesses going. Everything possible to make sure being made redundant does not mean you lose all you have. And everything possible to create hundreds of thousands of new jobs, to get people back out to work as soon as possible.

When the banks were in trouble, they got rescued. Millions of families who are finding themselves in trouble must be helped too.

The Liberal Democrat Economic Recovery Plan:

The key points of what we would do to help people and businesses get through the recession, and ensure the economy recovers as quickly as possible

Massive investment programme to create jobs and help the environment

Gordon Brown is wasting £12.5 billion on a VAT cut that is having no significant impact. We would scrap the VAT cut and use the remaining money to fund a huge 'green jobs' programme that will create (or preserve) tens of thousands of jobs building new affordable zero-carbon homes, insulating existing homes, schools and hospitals, and improving and expanding the rail network.

Cut taxes for struggling families so they have more money in their pockets

Across Britain people are struggling with rising bills, rising prices and wages that aren't keeping up. We would deliver substantial tax cuts for households on low and middle incomes to help people make ends meet. Specifically we would raise the income tax personal allowance to £10,000, cutting income tax bills by £700 a year for anyone earning over £10,000, and taking four million people out of income tax altogether. We would fund this by closing tax loopholes and tax avoidance schemes used by the wealthy and big business.

Keep people in their homes, so they don't need to fear unfair repossessions

We must ensure that banks only ever repossess people's homes as a last resort. Liberal Democrats will give courts the powers to make sure banks don't repossess unless they've already offered free independent financial advice, and pursued all alternatives like renegotiating the terms of the mortgage and offering a shared equity agreement.

Take over banks and run them in the public interest to help keep businesses afloat

The bank bail out isn't working. Despite billions being pumped into the banking sector and the Government taking large stakes in some of Britain's biggest banks, viable businesses are continuing to go under as banks pull lending from them. Banks which have failed and been rescued should be temporarily nationalised and run in the public interest. This is the only way to bring certainty, including full guarantees for all depositors, to the system while the complex process of straightening out the banks' balance sheets is completed.

We would also take action to cut energy bills, and to help people who lose their jobs or get into debt problems.

Massive investment programme in public transport and energy efficient homes will help the environment

Unlike Gordon Brown's temporary VAT cut our alternative 'green jobs' programme would create a real lasting legacy for Britain, making our economy more sustainable tomorrow as well as creating jobs today.

Reform banking and the City so this can never happen again

During the 1980s and 1990s, Britain's high street banks got sucked into a great game of reckless lending and trading in complex and poorly-understood financial instruments. They went too far. We need to return to old-style high street banks so people's savings are protected from the big risks of investment banking. We also need to reform financial regulation to curb the destabilising bonus culture, and to require financial institutions to behave more responsibly. Over time we need to reduce the dominance of 'the City' and promote more diverse, less profit-driven financial institutions such as mutuals and credit unions.

New priorities for Government - cut waste and invest in education and families

Investing in our children's future is essential as we try to make a sustainable recovery from recession. Young people will be hit hardest by the recession. We need to equip today's and tomorrow's young people with the skills and education to prosper in future, not leave them unable to escape from the circumstances of their birth or from debts acquired as students. We have identified billions of pounds of unnecessary and wasteful government spending which we would reallocate to education and helping families.