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Build an Economy that Works for You

Britain's economy is unbalanced. There are stark contrasts between regions, between old and young, and between the successful and those left behind. New technologies are beginning to transform the economy. Machine learning, artificial intelligence and automation are affecting the type and the scale of employment. New global markets are opening up for low-carbon and resourceefficient goods, services and infrastructure. The scope and speed of these changes will be profound and rapid.

Britain needs a sustainable and balanced economy not just to help fund public services but because growth and enterprise create jobs and opportunities for all. Liberal Democrats believe that there is much to be done to create an economy that ensures that the whole population benefits from the technological advances ahead.

The actions of the Conservatives have undermined the Coalition's work in fixing the economy. They have chosen to risk the long-term future of our economy by limiting vital spending on infrastructure and creating an over-reliance on consumer spending fuelled by debt to prop up growth. They have consistently put their own short-term ambition above long-term economic prosperity. Above all, their disastrous determination to pursue a hard Brexit casts a shadow over our economic future.

As a result, our economy is at its most fragile since the 2008 crash. We need a radical programme of investment to boost growth, develop new infrastructure fit for the future and get our economy back on track.

Our priorities in the next parliament will be:

4.1 Responsible finances: investing in Britain's future

Liberal Democrats reject the Conservative Government's damaging and irrational commitment to run budget surpluses on both capital and revenue, which imposes completely unnecessary deep cuts in spending and limits the scope for muchneeded capital investment. But we have no intention of just throwing away our hard-fought efforts to control the deficit during the Coalition years. Liberal Democrats will therefore commit to eliminating the deficit in day-to-day spending by 2020. This means we will be able to keep debt as a share of national wealth falling through the parliament, unless there is a recession. Once we have brought current expenditure into balance we will ensure that overall public spending grows roughly in line with the economy. This means that we can improve key public services and provide them with the investment they need.

A long-term stable economy requires more than just discipline over spending. It requires us to invest in people, innovation and infrastructure in order to give our economy the opportunity to remain competitive for the future. The Conservatives have failed to take advantage of historically low interest rates to borrow for the investment that would create jobs now and prepare us and our economy for the future.

Liberal Democrats will therefore commit to a responsible and realistic £100 billion package of additional infrastructure investment. This will prioritise:

We will ensure that the National Infrastructure Commission takes fully into account the environmental implications of all national infrastructure decisions. We will also devolve significant infrastructure spending to local areas.

Our investment in new infrastructure is matched by our commitment to protecting vital public services, including the NHS and education. We will make the difficult decisions needed to ensure our NHS is protected for the long term and that children are given the opportunities they need to succeed. We will therefore commit to:

The Conservative pursuit of hard Brexit will have serious impacts on the UK's national finances - impacts which current government plans may not fully take into account. Liberal Democrats would choose to pursue a very different European policy, and therefore would expect a better financial situation.

We will initiate a spending review after the general election focusing on delivering efficiency, funding proven spend-to-save initiatives, pursuing local and community integration to drive efficiency, and investing in technology to get public services and front-line staff online.

Traditional indicators of economic activity such as GDP are poor guides to genuine prosperity and wellbeing. We will therefore introduce a National Wellbeing Strategy covering all aspects of government policy, including health, housing and the environment.

4.2 Fair taxes

In order to balance the books and build a sustainable economy for the future we must ensure that everyone pays their fair share. Liberal Democrats have a longstanding commitment to fairer taxation, and in government we raised the personal allowance for Income Tax. It remains our ambition to make taxes fairer and simpler, to help those on low and middle incomes, and to ensure that those on the highest incomes, and large international companies, make a fair contribution. We will:

4.3 Supporting entrepreneurs and small business

As well as the need for public infrastructure investment, the role of entrepreneurs and small businesses in delivering a thriving economy is fundamental. Liberal Democrats believe there is a vital need for access to finance for new businesses, and those wishing to scale up. Creating true competition means allowing new businesses to rise and challenge established companies. There are also many well-established small businesses and traders which form the backbone of local economies. Our priority in supporting entrepreneurs and small businesses is to ensure that they have access to the funding they need, and in particular long-term (and patient) capital. We will:

4.4 Innovation, science and new technology

In the knowledge-based economy of the future, scientific research, innovation and skills will be crucial to prosperity. The advent of robotics and increasing artificial intelligence will also change the nature of work for many people. The government needs to act now to ensure this technological march can benefit everyone and that no areas are left in technology's wake. We will:

4.5 Helping everyone earn a decent living

Most businesses recognise the long-term value in treating their employers decently and developing their skills. However, there are still too many examples of unscrupulous employers who perpetuate bad practice, which not only exploits workers but can also undermine the competitive position of good employers. This has to change if we are to give everyone a decent chance of earning a living and move towards a more productive economy. We will:

4.6 Helping everyone to share in prosperity

Too many people justifiably feel left behind. Liberal Democrats believe that it is vital that everyone is given a stake in our economy, that we can only be united and competitive as a country if the rewards are reaped by all.

A well-functioning economy which works for everyone cannot be based solely on companies owned by and operated on behalf of small groups of shareholders. It should seek to foster a diversity of types of business, including encouraging alternative models such as mutuals, social enterprises or community-interest companies.

In all cases, it is vital to ensure the engagement and involvement of employees; successful businesses work for all stakeholders. That is why we will:

It is a scandal that in Britain today there are 1.7 million people without a bank account, eight million experiencing problem debt and 40% of the working-age population who have less than £100 in savings. To tackle the problem of financial exclusion Liberal Democrats will:

4.7 Spreading opportunities to every part of the country

Prosperity is very unevenly spread across the nations and regions of the UK. The prospect of Brexit, including the loss of £8.9 billion of European Structural and Investment Funds, is only likely to make the problems faced by disadvantaged areas worse. Local autonomy with real financial muscle is the only sustainable answer to the regional divide. We will: