The launch of the 2024 Liberal Democrat manifesto in London this morning was refreshingly gimmick-free. Ed Davey – notable in recent weeks for his enjoyment of water slides – did not arrive by paddle board, nor did he use a yellow hammer to smash through a blue wall. Instead he told the crowd about the years spent caring for his mother, who died when Davey was 15. As he did so, one of the candidates sitting behind him wiped tears from her eyes. It’s hard to imagine anyone doing that during one of his predecessor Jo Swinson’s earnest condemnations of Brexit.
Labour is not the only changed party in this election. In today’s manifesto Davey revealed a party remade. Like Keir Starmer, Davey has set aside ideology in favour of the pragmatic pursuit of victory, imposing what he himself described this morning as an “iron discipline” upon his party. Others at the launch told me the campaign is carefully controlled from the centre. Davey knows that if he can change the fortunes of his party (which was reduced to 11 seats in 2019, from a peak of 62 in 2005) he will do so not by outflanking Labour candidates but by unseating Conservatives.
Davey, who was welcomed onstage this morning by the MP Munira Wilson as the “Blue Wall destroyer-in-chief”, announced a manifesto aimed squarely at the older voters of the mostly rural constituencies that have long seen the Lib Dems as an alternative to the Conservatives. GP appointments for all, every burglary investigated, cleaner rivers, reopened bus routes: this is a document written to address the concerns of middle England. At its centre is a £9bn health and social care package, which includes promises such as a maximum two-month wait for cancer treatment and mental health hubs. Davey called it “a manifesto to save the NHS”.
The difficulty of selling such a manifesto to the public is that saving the NHS will cost a great deal of money. Davey repeatedly used the phrases “carefully costed” and “fully costed” as he spoke about his party’s plans. Alongside the manifesto, the Lib Dems have released a set of costings intended to demonstrate the party’s pragmatism and responsibility as an alternative to Tory economic mismanagement.
Among these measures is one clear provocation to Labour: a pledge to reform capital gains tax. Not in the large-scale sense of bringing it up to the same rate as income tax – which many in Labour would like, but which the party has resisted – but by closing “loopholes exploited by the super wealthy”. For most of the people (less than 1 per cent of the population) who pay capital gains tax, Davey said, this would actually be a tax cut because the tax-free allowance would also be raised. Whether it would really bring in £5.2bn is another matter – that is a lot of money to raise from a small number of people who have, thanks to their enormous wealth, a very high capacity for “behavioural change” (moving to Monaco, for example).
Similarly, the idea that £1.4bn can be raised (by 2028-29) through a tax on share buybacks might assume that the huge rise in share buybacks that has occurred in recent years will be sustained, and that the measure wouldn’t put companies off listing their shares in the UK (many already choose to list in the US instead). A rise in the digital services tax, too, does not account for its unintended consequences.
More persuasive is a proposed change to the bank levy – a charge on the balance sheets of British banks, which currently raises about £1.5bn a year. In 2015 it raised £3bn, and the rate was cut. It’s not fair to describe this as a “Conservative tax cut for big banks”, as the Lib Dem manifesto does, because at the same time the Tories added a new corporation tax surcharge that meant banks ended up paying very slightly more overall. However, given the tens of billions that banks have made in higher net interest income in recent years (which have led other European countries to impose, or at least consider, windfall taxes on bank profits) it seems fair to revisit the levy. If the rate was brought back up to the 2015 level it would raise about another £1.5bn a year, according to the Office for Budget Responsibility’s most recent policy costings.
The biggest tax-raising measure is £7.2bn from reducing tax avoidance and evasion, also a Labour policy – and another item for which the true outcome, despite Davey’s talk of careful costing, is highly uncertain.
Like Labour, the Lib Dems know they have an opportunity to capitalise on the public’s rejection of Tory rule. But that ideology is no longer affordable. The route to success is to offer voters better public services while scraping every bit of change from down the back of the national sofa to pay for them.
Nevertheless, the atmosphere among the Lib Dems was upbeat this morning: the Tory collapse is currently like an open goal and in Davey they have a persuasive platform and a likeable leader. He shrugged off a question about water slides: it was, he said, a question of not taking oneself too seriously, but taking one’s politics very seriously indeed. And then he left for Thorpe Park, to have his picture taken on a rollercoaster, because there are some things the Lib Dems know they do not need to change.
[See also: Nigel Farage’s very English populism]
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