The Liberal Democrats would replace the Treasury and Department for Business with a new department for growth, with the aim of creating a more cohesive and long-term economic vision for the UK, the party has said in a major policy move.
Announcing the plan at a speech in London, Daisy Cooper, the Lib Dems’ deputy leader and Treasury spokesperson, said a “Treasury brain” mindset based around short-term fiscal imperatives was dragging the country down.
As part of efforts to rebalance the economy away from the dominance of London, the new department would be based in Birmingham, Cooper said.
The policy announcement is the Lib Dems’ biggest since the general election. Some of the party’s MPs had complained about an overly cautious and policy-light approach under Ed Davey since the party secured 72 MPs in 2024.
Cooper’s speech also included an open 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 the headquarters of UK Finance in the City, Cooper said the UK was “stuck in a doom loop of low economic growth”. She blamed this in part on a lack of economic strategy under Keir Starmer, but also on a short-termist approach to growth.
“For too long, political parties without a vision for growth have allowed the Treasury tail to wag the political dog,” said Cooper, citing policies such as the decision, later reversed, to cut back the eligibility for the winter fuel payment as “a short-term Treasury tax-grab driven by the desire for immediate bankable cuts”.
She went on: “For decades, everyone has identified this as a problem. The Treasury does too much. Fiscal policy, economic policy, and controlling government spending. In most other countries, these roles are split up.
“The Treasury is disconnected from the real economy. Despite holding all the economic power, the Treasury isn’t responsible for policies on business or trade. This leaves British business jumping through hoops, speaking to three, four, five different government departments before they can get an answer.
“In short, the Treasury is over-centralised. It drives short-term thinking. And it simply isn’t designed to deliver long-term economic growth.”
The solution, she argued, would be to merge large sections of the Treasury with the Department for Business and Trade, creating a department with “a mandate to boost long-term prosperity, improve living standards and end the cost of living crisis”.
The Treasury’s role of overseeing departmental spending would be done by a smaller department for public expenditure, which would be set up to oversee departmental spending and ensure value for money.
The idea has potential crossover with policies being devised by a new group called Prosper UK, led by moderate Tories Andy Street and Ruth Davidson, which is focused on finding ideas for growth.
#Lib #Dems #plan #scrap #Treasury #department #growth #Liberal #Democrats