A Liberal Party Policy Statement

The Economy

• The Economic Challenges
• Economic Management
• Objectives
• Pensions

The Economic Challenges

The growth of the internet, e-commerce and other advances in technology are already changing working practices and employment patterns. At the same time the rapid growth of economies in the developing world is challenging the previous dominence of the West and rendering whole industries uncompetitive.

These are global challenges, beyond the power of individual nation states, or even of regional groupings such as the EU, to control. The need for a democratically accountable world authority has never been greater. Unless the new technology can be made to serve the interests of people there is a real danger that changes will be determined by what is technologically possible, rather than by what is desirable.

“Information is power” and the changes now taking place in the world are capable of being used for authoritarian purposes of for the liberation of individuals and communities. As Liberals we believe that the economy should serve the interests of the people.

Economic Management

The UK government, whichever party is in power, now has only marginal influence over interest rates and exchange rates which are chiefly determined by global market forces. This puts pressure on the remaining areas of the UK economy over which the government can still exercise control. Liberals deplore the influence of electoral considerations on the management of the economy with successive governments building up reserves so that they can attempt to bribe the electorate with tax cuts or increasing public spending just before an election. We believe that the introduction of proportional representation would bring greater stability.

We remain committed to a genuine free enterprise economy with stricter controls over monopoly power, similar to the US anti-trust laws, and greater employee participation, including co-ownership.

We believe that the devolution of power to the nations and regions of the UK will help to redress the imbalance of economic activity between South-East England and the rest of the UK.

We also believe that high standards of education and health should be available without charge and are concerned at the continuing erosion of this principle.

Objectives

Libral economic policy has the following objectives:

1. To convert to sources of energy and industrial processes which are sustainable and non-polluting;
2. To support world development and oppose protectionism, accepting that the privileged position of the Western World cannot long continue;
3. To distribute wealth fairly, waging war on poverty and ensuring a minimum standard of living for all, but also rewarding innovation, initiative, commitment and good work;
4. To encourage cooperative ventures and organization on a human scale;
5. To foster the development of local economies.

With regard to these objectives we would identify significant exemplars with target achievement dates. These would include such matters as the restoration of the ozone layer and the elimination of TB (both nationally and globally). Only in this way can appropriate strategies be identified and costed in view of their probable short term costs against long term savings.

For Liberals, economic policy will always have to serve the achievement of the freedom of the individual to enjoy a healthy environment.

Pensions

We believe that all pensioners should receive a basic pension sufficient to provide an adequate standard of living.

Liberals believe that the private sector can enhance, but can never replace, a basic state pension which we have resolved must be set to at least what the Family Budget Unit describes as “Low Cost but Acceptable (LCA)” standard of living, which is, using 2000 data, at least £90 a week for a single pensioner and £135 a week for a couple. We also believe that additional non-means tested benefits will need to be paid to take account of housing costs, disability and additional needs of older pensioners.

We also believe that individuals should be able to save for additional benefits in a national scheme where the individual pension is related to the contributions and investment returns. Because these benefits would be financed directly and genuinely from contributions, those who have saved for their retirement would no longer be penalised because of those savings.

To ensure that these monies are no longer “raided” by government a separate National Pension and Investment Trust should be established. Such a trust would allow the expectation of flexible retirement ages and would cater for the substantial number of employees who regularly change employment or are in self-employed or part-time work.

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