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Isle of Wight Liberal Democrats

Britain needs our Liberal Democrat alternative

October 29, 2018 6:00 PM
Originally published by UK Liberal Democrats

Philip Hammond tried to strike an upbeat note today, declaring "austerity is over". Cossetted inside Westminster for the afternoon, he hid away from the storm clouds gathering over our economy.

Brexit is making the situation worse.

In truth, austerity cannot be brought to an end without difficult decisions involving an increase in taxation. Excluding the Government's promises on the NHS, maintaining real spending on public services will require an additional £19bn in extra tax and borrowing. And Brexit itself is making the situation worse.

The Office for Budget Responsibility estimates that uncertainty caused by Brexit has already weakened the public finances to the tune of £15bn annually. The 'no-deal' Brexit with which Ministers are flirting would be far worse still.

By contrast, if we succeed in stopping Brexit, the public finances could be lifted by £15bn annually through increased wages, growth and business investment. Meanwhile, money set aside for "Brexit contingencies" - £3 billion so far - could be redirected into public services.

Whatever the Brexit outcome, Britain's tax system is in urgent need of reform.

Whatever the Brexit outcome, Britain's tax system is in urgent need of reform. It penalises business investment, hurts our struggling high streets, is easily avoided by the largest companies and has failed to keep up with massive increases in personal wealth. And public services need a substantial injection of cash.

In a Liberal Democrat "People's Budget" for the 21st Century, we would:

The Conservatives have taken their eye off the ball while they pursue Brexit at any cost.

Today's Budget takes place against a backdrop of falling growth (2.9% in 2014, down to just 1.7% last year, with the UK now among the slowest growing economies in the G7). The long, slow process of deficit reduction has so far failed to decrease overall debt, which is now 85% of GDP.

Meanwhile, high personal debt and historically low savings rates place many households at risk. The Conservatives have simply taken their eye off the ball in running a successful economy, while they pursue Brexit at any cost.

In those circumstances, Britain needs our Liberal Democrat alternative, which would steady our economy and put money back in the pockets of ordinary people.

And at the heart of that plan is the chance to "Exit from Brexit" through a People's Vote. Freeing the country and future generations from the needless self-harm of leaving the European Union would enable Britain to unite around a recovery plan and to grow again.