Lib Dems plan to scrap Treasury for new ‘department for growth’ | Liberal Democrats
In a major policy move, the Liberal Democrats will replace the Treasury and Enterprise Department with a new growth department to create a more cohesive, long-term economic vision for the UK, the party said.
Announcing the plan in a speech in London, Liberal Democrats’ deputy leader and Treasury spokesperson Daisy Cooper said that the “Treasury mastermind” mentality based on short-term fiscal obligations was dragging the country down.
The new department will be headquartered in Birmingham, Cooper said, as part of efforts to rebalance the economy away from the dominance of London.
This policy announcement was the Liberal Democrats’ biggest announcement since the general election. Some MPs in the party have complained about an overly cautious and policy-conscious approach by Ed Davey’s administration since the party is set to have 72 MPs in 2024.
Cooper’s speech included a clear appeal to moderate Conservatives after Kemi Badenoch said last month that centrist ideas were no longer welcome in her party. “Moderates are welcome in ours,” Cooper said.
Speaking at UK Finance’s headquarters in the city, Cooper said Britain was “stuck in an inevitable cycle of low economic growth”. He attributed this partly to the lack of economic strategy under Keir Starmer but also to his short-term growth approach.
“For too long political parties with no growth vision have allowed the Treasury’s tail to wag its political dog,” Cooper said, adding that policies such as the decision to reduce eligibility for the winter fuel payment, which was later reversed, were “a short-term Treasury tax grab driven by a desire for immediately bankable cuts”.
He continued: “For decades, everyone has identified this as a problem. The Treasury does too much. Fiscal policy, economic policy and control of government spending. In many other countries these roles are divided.”
“The Treasury is disconnected from the real economy. Despite holding all economic power, the Treasury is not responsible for business and trade policy. This leaves British business talking to three, four, five different government departments without getting an answer.
“In short, the Treasury is overly centralized. It encourages short-term thinking. And it is not designed to deliver long-term economic growth.”
He argued that the solution would be to merge large parts of the Treasury with the Department of Business and Trade to create a department “with a mandate to drive long-term prosperity, improve living standards and end the cost of living crisis”.
The Treasury’s role in overseeing ministerial spending will be fulfilled by a smaller public expenditure department, which will be established to oversee ministerial spending and ensure value for money.
The idea has potential overlap with policies being designed by a new group called Prosper UK, which focuses on coming up with ideas for growth, led by moderate Tories Andy Street and Ruth Davidson.
